The Molycorp-Neo Materials deal means back to the drawing board for Dudley Kingsnorth. RareMetalBlog publisher Tracy Weslosky was on the nail to call the takeover by Molycorp of Neo Materials a game changer.
So far as Dudley Kingsnorth, Australia’s leading rare earths expert is concerned, it is just that, and has certainly guaranteed that all the future outlook for REE demand will have to be recalibrated. So much so, in fact, that he says that his next demand outlook projections will be dramatically different from the ones issued just last month.
There’s still be a shortage of heavy rare earths, but he feels it is going to be a much harder hill to climb for competing light rare earth hopefuls once the combined-Molycorp-Neo operation hits its stride. He says Molycorp will now be moving to its 40,000 tonnes a year target much more quickly than expected – perhaps it might be just over three years away.
But Dudley sees a far more important consequence of the takeover which means a true mines-to-magnets operation. That is, a kick-start to demand and rising use of rare earths.
The reason? End users have spent considerable sums of money on finding ways to lighten their dependence on REE – what Dudley has termed “replace, reduce or recycle”. They won’t need to do that now: they know that the rare earth supplies will be available from a non-China source, so they can forge ahead with developing new applications.
(This is the same concept that is driving Australia’s Metallica Minerals with its scandium project. The world uses only a few tonnes a year of scandium mainly because it is in such short supply; guarantee plentiful supply, Metallica reckons, and new applications will emerge.)
Just this week we heard of Japan’s new Sendai Material Valley project. This is an effort to turn the Tohoku region into a world-class centre for material industries, with a focus on the development of next-generation automotive materials, including emission catalysts that do not need rare earths or critical metals. [My emphasis]
Dudley thinks that Molycorp will not only be in a position to guarantee supply, but to guarantee prices (perhaps for up to five years). No one has yet been able to do either, and certainly not both.
He thinks the Molycorp move will be widely welcomed.