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Increased Chinese Stockpiling Could Push REE Prices Up
Apr 21,2014 14:49CST
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Source:SMM
Back in January, Rare Earth Investing News questioned whether prices for rare earth elements (REEs) will increase in 2014.

Thursday April 17, 2014, 4:30am PDT
By Charlotte McLeod - Exclusive to Rare Earth Investing News

Back in January, Rare Earth Investing News questioned whether prices for rare earth elements (REEs) will increase in 2014. While no large-scale turnaround has yet emerged, this week brought reports that REE prices may be poised to rise, at least a little.

That, according to a Proactive Investors Hong Kong article published yesterday, is partially because China’s State Reserve Bureau (SRB) plans to move forward with a new round of REE stockpiling. Specifically, the SRB, which Bloomberg Businessweek states has agreed with a group of companies to purchase their REEs “at prices at least 10 percent higher than market rates,” is looking to buy up “more medium-to-heavy rare earths” in 2014.

In addition, China will be looking to “strengthen export controls” for REEs despite the fact that the World Trade Organization has ruled against them. That means the Asian nation will likely be increasing mining taxes and export license fees, as well as putting stricter environmental guidelines in place for producers, Bloomberg Businessweek quotes Beijing Antaike Information Development analyst Chen Huan as saying.

While that news is no guarantee that REE prices will rise, given that China produces 90 percent of REEs, it’s certainly a possibility, Proactive Investors notes. No word yet on how much of an increase market watchers should expect.

REEs from the sea?

Also making headlines this week was a team of geochemists in Germany that has developed a way to “efficiently extract rare earth metals from ferromanganese nodules using the solvent desferrioxamine-B,” also known as Desferal.

Discovery News explains that when applied to ferromanganese nodules — nodules of iron and manganese that abound on the ocean floor — Desferal binds more strongly to some metals than to others, meaning that it can extract REEs while leaving other metals behind. Thus far, the team has been able to extract “up to 80 percent of four rare earth metals from some ferromanganese nodules.”

The viability of underwater REE mining is a fairly contentious topic, so it will be interesting to see whether this new technology will be able to help move it forward.

Junior company news

The past week and a half or so has brought a number of exciting announcements from junior REE companies. For one, Tasman Metals (TSXV:TSM,NYSEMKT:TAS) said on April 8 that it has started a prefeasibility study for its Sweden-based Norra Karr heavy REE project. Mark Saxon, the company’s president and CEO, described the move as “the next important milestone in the development of the Norra Karr project,” also commenting that the study should be complete in the fourth quarter of this year.

The next day, Quest Rare Minerals (TSX:QRM17,NYSEMKT:QRM) released a preliminary economic assessment (PEA) based on a revised development plan for its Strange Lake rare earth project. The new plan, which the company says “significantly reduces the market, operational and financial risks of the Strange Lake Project,” estimates construction capital costs of about $1.321 billion, down about $1.23 billion from the previous from an October 2013 prefeasibility study. It also points to savings of $182 million in sustaining capital.

Quest plans to initiate a definitive feasibility study in the fall of 2014.

Meanwhile, on April 10, Pele Mountain Resources (TSXV:GEM,OTCQX:GOLDF) entered into an access agreement with Rio Algom. The agreement grants Pele the right “to access and take samples from one or more of [Rio Algom's] Elliot Lake, Ontario tailings management areas, to test primarily for rare earths.”

Finally, GéoMégA Resources (TSXV:GMA) announced earlier this week the final closing of a brokered private placement with Industrial Alliance Securities. Taking the first tranche of the private placement into consideration, the company achieved total gross proceeds of $3,315,000.

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article. 
 

China
DNI Metals Inc.
geomega resources inc.
NYSEMKT:QRM
NYSEMKT:TAS
OTCQX:GOLDF
Pele Mountain

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