Christmas Comes Early to Rare Earth Miners

…And so the saga continues, China holds the threat of withdrawing REMs from the US, threatening to undermine global supply chains. These threats translated into action when China last week increased the import duties on ores and concentrates to 25%.

This is a bit of a blow to the supply of REMs as most mine operators around the world export their ores for processing to China. The processing of the ores is environmentally very polluting and radioactive involving acid baths and radiation. The numbers of such facilities outside of China are few and far between. Not to mention the few that existed like the Mountain Pass mine and processing facility in California had to shut down because they couldn’t compete with Chinese costs.

Chinese companies are already some of the dominant producers of REMs, now the extra import duty on foreign ores for processing could almost be considered a death knell for Western ore suppliers.

That’s Tough for REM Miners and Processors, right? – No, It’s Great!

The last couple of months have been better for the operators of mines/plants dealing in rare earth metals (REMs) than this last decade.

Mine operators with assets in the E.U, Russia, and Australia are all perking up at the thought of higher prices and beckoning opportunity. Keep in mind that four of seventeen rare earths are named after the village of Ytterby , Sweden for a reason.

For Australia’s Lynas, things couldn’t be better, being that it is one of the biggest producers of REMs outside of China, and is perfectly positioned having recently expanded its Mountain Weld Mine and Concentration plant in Western Australia to produce and process more oxides.

Thanks to the threat of disruptions in the Global supply chain other operators like Paladin Energy have made the decision to restart their Uranium mine at the Langer Heinrich mine in Namibia. In order to set this up they divested themselves of their holdings at the Kayelekera uranium mine in Malawi by selling its 85% interest to the Hylea and Chichewa joint-venture - Lotus Resources - to manage and mine.

According to Paladin CEO Scott Sullivan, this transaction will now allow Paladin to focus on its flagship asset the Langer Heinrich mine in Namibia. The Langer Heinrich mine ceased operations and was placed into care and maintenance a couple of years ago due to the drastic fall in world uranium prices. Now the great trade war and the threat to the supply of uranium heralds its revival, a revival that Paladin is anxious to support and promote with an infusion of funds.

Companies and operators across the board are clearing the decks, so to speak, to be prepared to reap the rewards this trade war and its aftermath could generate.