Kingsnorth on Global Rare Earth Balance: Heavy Rare Earth Self-Sufficiency by 2020 is a Dream

Day 2 of the 8th Annual Uranium Conference, the sharp witted Dudley Kingsnorth kicks off his presentation by telling the audience a joke about the difference between a consultant and a shopping trolley. He starts: “You can get more food and drink into a consultant than a shopping trolley…and a trolley is easier to direct…” Dudley, one of the brightest minds in the world on the subject of rare earth elements (REEs), serves as Professor at the Centre for Research in Energy and Minerals Economics at Curtin University and is the Executive Director for the Industrial Minerals Company of Australia Pty Ltd. In his presentation, The Global Rare Earths Industry; Getting the Balance Right, he offers his insights into the REE industry and says that heavy rare earth self-sufficiency by 2020 is a dream.

In his PPT, the slide he calls ‘Dreams vs. Possibilities’, he explains that the opportunity for the rest of the world (ROW) to be self-sufficient in light rare earths supply in 2016-2017 is real and that there are significant opportunities for Australian mining, processing and engineering consulting services. However, he also notes that the opportunity for ROW to be self-sufficient in heavy rare earths supply by 2020 is a dream. Questioning the existing project development schedules proposed by many prospective rare earth suppliers outside of China, he says that much of the market discussions depend on what happens next with Molycorp and Lynas. With the Chinese export quota reduction of 40%, HREE reserves limited, and export taxes of 15-25%; combined with industry consolidation (facilitating co-ordinated pricing) and environmental legislation enforced – he summarizes, the HREE focused companies are clearly the growth sector.

So where are the opportunities? Dudley forecast that between 2011 and 2016 ROW demand will grow from 35ktpa to 55ktpa. And, during this same time period, rare earths production will increase tenfold – from 6ktpa REO to 60ktpa REO. Forecast global demand in 2020 is 200-240ktpa REO and forecast ROW demand in 2020 is 70-90ktpa REO; so there is an opportunity for ROW producers to increase production between 2016 and 2020 by 50% to meet potential ROW demand.

In looking at the shape of the REE industry by 2016, Dudley says that China will not directly deny rare earths to the rest of the world, but that it will take whatever measures are necessary to maximize ‘value added’ manufacturing (job creation and retention) in the nation. He also notes that ongoing high prices of rare earths will continue to increase focus on substitution, recycling and reduce the search for new applications of rare earths. By 2016, Dudley says the first new REE projects will be on-stream and looking to expand, with next generation projects possibly in the early stages of start-up. There was also discussion about rare earth processing facilities and techniques that will be required to extract REEs. Dudley doesn’t think that many projects will achieve environment approval in less than 2 years. In speaking about the global rare earth industry in 2016 Dudley says that Molycorp, Lynas, Indian Rare Earths and recycling will be the major sources of light rare earth elements for ROW. He further notes that there is a good chance but no certainty that Steemkampstraal, Kazakstan and Dubbo will be in production — with the latter being the only heavy rare earth element project.