The rare earth element (REE) boom in mining is by now well-hyped among investors – the question is, how long will it last?
With application across a broad range of technologies of the future – particularly microchips, lasers, glass and magnets – demand for REEs has been running hot for a while now. But while the REE rush is often thought of in terms of the push to decarbonise, in part it’s due to old-fashioned geopolitics.
As the name suggests, the 17 rare earths are often regarded as critical or strategic materials and are therefore regulated in many nations by government strategies to shore up supply as a matter of national interest.
Many countries are hoping to divest from China, the largest producer of rare earths with 57% of world production, dwarfing the next-biggest producer, the US (15%).
This inclination has intensified since China went into hard lockdown, though it was already in train following a freeze in western – and notably Australian – relations with the industrial giant in recent years.
Which way are the REE winds blowing?
REE prices are not governed by a widely used public exchange and can be difficult to gauge. Spot prices are listed on certain websites but REEs are infrequently traded and the accuracy of prices is questionable.
That said, the global outlook suggests that the national security aspect of critical mineral supply chains is only going to take more of the bandwidth of national governments around the world in the near term.
An example of this was the new Critical Minerals Partnership signed between Australia and Japan to support the adoption of clean energy technologies through the joint advancement of the supply chains on which they depend.
As these industries develop, REE producers will be well-positioned for the inevitable transition to market-based pricing mechanisms that will more accurately reflect the intrinsic value of this commodity.
Since the start of the year, rare earth oxides and metals have made gains from recent lows, while prices for high-performance NdFeB alloys also rose in December from the prior month.
In tandem with a 42% rise in electric vehicle (EV) sales globally in the first 11 months of 2022, loadings of NdFeB magnets per vehicle also jumped by more than 13% due to increasing sales of models requiring more motor power.
The global fleet of EVs is expected to top 40 million vehicles by the end of 2023. Put simply, demand for the REEs that go into clean transport, to name just one of their many applications, is not going to cool any time soon.
What happened to REE stocks last quarter?
Several small cap REE miners made significant progress towards bringing more REEs to market in the last quarter of 2022. Here, we take a look at what some of them achieved.
Kingfisher (LON:KGF) Mining
Kingfisher Mining Ltd (ASX:KFM) made a number of breakthrough high-grade rare earth elements discoveries in the Gascoyne region of WA during the quarter, where it holds a target strike length of more than 54 kilometres along the Chalba mineralised corridor and more than 30 kilometres along the Lockier mineralised corridor.
The company also secured significant landholdings across the interpreted extensions to its advanced copper-gold exploration targets giving it more than 30 kilometres of strike across the Boolaloo Project target geology.
“The work we completed during the quarter has led to significant progress with our understanding of the geology across our project area and we certainly believe we are looking at a regional scale REE system, with potential for large-scale carbonatite intrusions, over which we have a belt-scale tenement holding,” said executive director and CEO James Farrell.
“We now step into 2023, with drill results still to come from the laboratory and exploration work plans which we hope will see more discoveries in this exciting emerging region.”
Taruga Minerals
Taruga Minerals Ltd (ASX:TAR) struck exceptional clay-hosted REE grades at Morgan’s Creek during the quarter of up to 9,082 parts per million (ppm) (0.91%) total rare earth oxides (TREO) with multiple holes mineralised from surface and to end of hole.
The company says it has identified 4.3 kilometres of strike thus far, which remains open. It is also energised by a very high basket average of 34% magnetic rare earth oxides, or MREO (neodymium + praseodymium + dysprosium + terbium), which is significantly higher than the peer average of roughly 25% MREO, with high levels of dysprosium and terbium.
On the financial side, the company executed a well-supported placement to raise $3.5 million at 2.8 cents per share, with TAR director participation of $225,000.
The company rounded off 2022 with roughly $4.12 million in cash and receivables to its name.
Lindian Resources
Lindian Resources Ltd (ASX:LIN) trained its focus on the flagship Kangankunde Project in Malawi, which it believes will rapidly emerge as the standout, globally significant rare earths project in terms of grade, scale and non-radioactivity.
“I am not aware of another deposit anywhere in the world demonstrating such high grades of rare earths mineralisation and to such depth,” CEO Alistair Stephens said.
“Added to this is the non-radioactivity of the Kangankunde rare earths mineralisation – a highly unique and extremely advantageous characteristic for logistics and costs, with the potential for concentrates from Kangankunde to be shipped anywhere in the world, free of Class 7 restrictions.
“The commercial signficance of this cannot be understated.”
“The high content of NdPr reported in the assays is in line with historical work and indicates that the concentrates from Kangankunde will be in high demand with NdPr being used to produce strong permanent magnets critical to global decarbonisation technologies including EVs and wind turbines.”
Lindian rounded out 2022 in good shape, being well-capitalised and poised to generate investor interest and awareness in Kangankunde this year.
Ionic Rare Earths
Ionic Rare Earths Ltd (ASX:IXR, OTC:IXRRF) celebrated the approval of the Makuutu Rare Earth Project’s environmental and social impact assessment (ESIA) during the quarter, by Uganda’s National Environmental Management Authority (NEMA).
The company also progressed a mining lease application, which is expected to be finalised imminently, with award expected by the end of Q1 2023.
There were some environmental wins during the quarter – IonicRE received an ESG rating of 'BB' from leading independent global platform Digbee ESGTM during the quarter, and was accepted as member participant of the world’s largest corporate sustainability initiative, the United Nations Global Compact.
The company progressed the Ionic Technologies Belfast facility fit out on schedule, with the magnet recycling pilot plant producing more than 5 kilograms of neodymium (Nd2O3) and dysprosium (Dy2O3) products as part of a verification program processing NdFeB swarf. It also made headway on a downstream refinery study, targeting a US location – this should be delivered in Q1 2023.
High-purity separated oxides, showing neodymium (left) and dysprosium (right).
Australian Strategic Materials
Australian Strategic Materials Ltd (ASX:ASM) had a strong quarter on the corporate front, strengthening its balance sheet by $41.1 million by way of a capital raise.
The company is now poised to undertake priority activities in 2023, with the funds being earmarked to:
- secure Korean Metals Plant feedstock inventory to support metals production;
- accelerate offtake marketing and strategic partner discussions in relation to funding the Dubbo Project; and
- commence early works on Dubbo Project road, bridge and rail infrastructure, which are important for site access.
In November, ASM was accepted as a participant member of the United Nations Global Compact (UN Global Compact), the world’s largest corporate sustainability initiative.
American Rare Earths
American Rare Earths Ltd (ASX:ARR) continued its march towards commercialisation of its major US rare earths project, Halleck Creek, where geological data continues to show significant rare earth mineralisation.
What’s more, mineralogy tests show the rare earth host mineral at Halleck Creek can be easily liberated and that the host mineral, allanite, contains approximately 90% of the total rare earths present.
Because allanite is easily liberated, the company can expect higher recovery rates, the ability to upgrade rare earth elements at a reasonable price, and very low mining and processing costs, including energy usage.
This has increased ARR’s confidence in a metallurgical process for production.
The company conducted a 38-hole reverse circulation (RC) drill campaign, which confirmed consistent rare earths mineralisation to at least 150 metres at Halleck Creek – an increase of 50% over previous drill depths and the deposit remains open laterally and at depth.
Northern Minerals
Northern Minerals Ltd (ASX:NTU) kicked off drilling activities at Wolverine with 2,123 metres of drilling during the quarter and finalised some key early contractor involvement contracts for the engineering and design of the Browns Range Beneficiation Plant.
Drilling at Wolverine in northeast Western Australia.
At an annual and extraordinary general meeting, shareholders passed some key resolutions – in particular, the strategic partnership with Iluka Resources Limited.
“The partnership is a key component of our strategy, which is initially focused on prioritising the rich Wolverine deposit and aiming to bring forward plans for commercial production,” executive chairman Nick Curtis.
“This is a mutually beneficial partnership, with Iluka agreeing to purchase all available concentrate from the Browns Range Project, until the delivery of contained rare earth oxide (REO) has reached 30,500 tonnes. This covers the initial eight years plus mine life based on the current known mineral resource.
“The supply agreement with Iluka de-risks and accelerates the development of the Browns Range Project, significantly reducing our likely capex.”
On the grant and capital raising front, the company had a good quarter, calling in a $3.9 million R&D rebate for 2022, and adding $3.7 million to the kitty courtesy of a share purchase plan.
This period also saw a number of board and executive changes for the company.
Lanthanein Resources
Lanthanein Resources Ltd (ASX:LNR) kicked off its maiden drill program at the Lyons prospect during the December quarter, confirming high-grade REE and niobium there.
Significant intersections included:
- 5 metres at 0.69% TREO from 20 metres, including 2 metres at 1.06% TREO from 21 metres;
- 3 metres at 0.82% TREO from 30 metres, including 1-metre at 1.67% TREO (55% NdPr:TREO) from 31 metres;
- 3 metres at 0.57% TREO from 6 metres, including 1-metre at 1.11% TREO (51% NdPr:TREO) and 0.79% Nb2O5 from 8 metres;
- 1-metre at 1.01% TREO (53% NdPr: TREO) from 49 metres; and
- 1-metre at 0.71% TREO (47% NdPr:TREO) and 1.20% Nb2O5 from 34 metres.
On the cash front, the company secured $200,000 of EIS funding to drill the Lyons Carbonatite Targets from the WA Government.
Also during the quarter, a maiden aircore first pass drill program was completed at the Koolya Project in Western Australia, with a total of 599 metres drilled and samples sent to the laboratory and results expected in Q1, 2023.
Parabellum Resources
Parabellum Resources Ltd (ASX:PBL) had a busy quarter, including at its Khotgor REE Project in Mongolia.
Drill samples have been dispatched to the Perth lab with preliminary metallurgical test work results revealing attractive results.
Meanwhile, the company kicked off construction of a new pilot plant in Ulaanbaatar, which is set to be commissioned in the current quarter.
An updated mineral resource estimate is scheduled for this quarter.
Ground EM surveying – Redlands Project.
Meanwhile, at the Nyngan/Cobar Copper-Gold Projects in NSW, Parabellum is in the final stages of a ground electromagnetic survey ahead of a maiden drill program.
The explorer has defined priority copper targets at the Whitbarrow, Redlands and Lunns Dam Projects using airborne electromagnetic survey.
The company submitted NSW environmental drill permits late in the year and is in discussions with three drill contractors for a maiden drill program starting late in this quarter.
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