Dysprosium prices being paid by Japanese auto makers have fallen by more than 30 per cent since July. In early November, buyers were paying about $US2500/kg for the rare earth element, that being down 16 per cent since early October and 32 per cent below the July peak.
They’re still high by historical standards: in the period January 2010 to July 2011, dysprosium prices rose 20-fold. But while Japanese companies have been paying the inflated prices, the Nikkei news service reports that magnet makers in China have been holding back dysprosium purchases – they can no longer make money at the present inflated levels, which has led Chinese trading companies to run down their inventories. The Nikkei notes that, with cerium, Japanese companies are now paying about $US70/kg, about half the level obtaining in July.
So, just to take stock, let’s refresh on Western dysprosium plans. Australian stockbroker D.J. Carmichael has compiled a list of REE companies planning to, within the next three years, complete their studies pertaining to production of dysprosium and yttrium. The report takes the view that, by 2015, dysprosium will be in deficit to the tune of somewhere between 500 tonnes and 1000 tonnes, while yttrium will be in deficit at between 200 tonnes and 400 tonnes.
The analyst, David Rijkers, is estimating that the total dysprosium and yttrium from what he calls the advanced projects will be 450 tonnes a year and 1,916 tonnes respectively. But this production rate would be not be achieved until 2017. His list of advanced projects reads:
Alkane Resources – start 2015, annual production 52 tonnes dysprosium and 387 tonnes yttrium.
Lynas Corp – start 2012, 44 tonnes a year of dysprosium, zero yttrium.
Molycorp – start 2011, zero dysprosium and 44 tonnes a year yttrium.
Avalon Rare Metals – start 2017, 271 tonnes a year dysprosium, 1,100 tonnes yttrium.
Arafura Resources – start 2015, 66 tonnes dysprosium, 264 tonnes yttrium.
Great Western – start 2015, 17 tonnes dysprosium, 125 tonnes yttrium.
Behind them come what he calls “prospective projects”: Rare Element (start 2018; 29tpa dysprosium, 56tpa yttrium), Greenland Minerals & Energy (start unknown; 484tpa dysprosium, 3,388tpa yttrium) and Quest Rare Minerals (start 2016; 492tpa dysprosium, 3,360tpa yttrium) – although all those figures are long term plans. He sees these three companies reaching reasonable production by 2019 “at best”.
Further back are two Australian companies, Northern Minerals and TUC Resources.
The analyst has a warning about companies other than Lynas and Molycorp: “Delays are likely and there is a real possibility that future/demand supply may render some of these projects uneconomic resulting in the failure to raise capital based on weak project economics”.
But, in an earlier report, Rijkers took the plunge and said the dysprosium/yttrium producers most likely to make the grade by transitioning into REE producers were Lynas (grade, scale, low costs, first mover and vertical integration), Molycorp (grade, scale, government subsidy, vertical integration and first mover), Great Western (HREE-rich, vertical integration, first mover) and Northern Minerals (Lynas on register, potentially large HREE xenotime, Dy and Y resources and capable of producing a concentration grade compatible with other processing plants).
The unspoken point here is: if some of these projects are delayed, and delayed significantly, then present calculations of the dysprosium supply/demand balance in the years ahead go straight out the window.