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2010: Here We Are — Now Where Will We Go?

Posted by admin at 10:47 AM on Jan 2, 2010

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By Clint Cox

Happy New Year!

This is more of an exercise in entertainment than it will be informative. There are so many different directions the rare earth industry could go this year that it would be foolish to make formal predictions (so please consider anything I say here very informal). Enough tip-toeing, let’s dance!

The Economy

I stated that this would be an issue last year, and I still believe that this can have a great deal of effect on the marketplace for rare earths. If we have a repeat credit crisis or a currency crisis of any sort, the REE business may be greatly affected. It is good to look at the broader economy as the backdrop for the REEs.

China Export Quotas

I don’t think China will restrict export of any REEs, but I have been wrong many times before. The quotas may stay flat or go down a bit, but I think the fear of China cutting off the West is not going to happen right now.

April 1, 2010 Report

Congress will get its first formal look at the rare earths industry as they have ordered a report studying the REEs due on April Fools Day. I don’t know what the impact of this study will be (or if it will be public information). Depending on its content, and what is done with it, it may have substantial repercussions — at least in North America.

Nonstop Rare Earth Conferences

The media attention placed on rare earths in 2009 sparked tremendous interest, and now there are a number of groups providing new, improved, or watered down ways to learn about REEs! There are some very legitimate conferences that have been around for some years, and there will be some worthwhile newcomers. However, there is a lot of talk about being “the” rare earth conference. Here is a partial list of currently scheduled conferences (more conferences will be scheduled throughout the year):

SAIMM “Thorium & Rare Earths”, Cape Town

DMTC “2nd Annual Strategic Materials Conference”, Cleveland

SME, Phoenix (both strategic metals and rare earth sessions)

TREM “Technology & Rare Earth Metals for National Security and Clean Energy”, Washington DC

Objective Capital’s “Rare Earths, Specialty & Minor Metals Investment Summit”, London

ICRE 2010 “6th International Conference on Rare Earth Development and Application”, Beijing

Metal Events “6th International Rare Earths Conference”, Hong Kong

This list does not include conferences such as Indaba or the PDAC which will have dedicated rare earths talks or programs.

The Media

Last year’s MIIT draft out of China was the catalyst that captured the media’s attention. Since then, there has been substantial coverage of REEs in green technologies and other important applications. This is a true wildcard — I believe that the media coverage will continue, but I also believe that most stories will be ill-informed. There has been some excellent, responsible coverage, but I anticipate more sensational journalism grabbing headlines regarding the rare earths.

The Development of Sichuan

Most of the talk surrounding the LREE in China revolves around Bayan Obo and Baotou. However, the Jiangxi Copper Group has made it clear that they will be developing the Maoniuping deposit in Sichuan (also referred to sometimes as “Mianning”). Jiangxi Copper will be spending hundreds of millions of dollars to develop the site, and it is unclear what impact it will have on the market. This should be followed closely, as they have a substantial deposit of rare earths.

New Projects

When I began covering this industry there were only a handful of junior exploration companies that would claim that they had anything to do with rare earth. Now there are well over 100. There will be new projects coming to light in 2010, and we look forward to some surprises.

IPO Fest?

There may be several players coming into the public market in 2010 — some of these may be significant. Let’s watch and see if this pans out, and how much money they raise.

The Unknown

Ah! Saved the best for last. There will be unknown events in 2010 that will undoubtedly rock the rare earth market. We will watch with eyes wide open, but we will certainly be surprised like everyone else!