[Rare Earth Minerals] Lynas – Barbarians at its Gate? – by Christopher Ecclestone (InvestorIntel.com – June 13, 2016)


It’s easy in all the euphoria currently swirling in the Lithium to forget that Rare Earths and Lithium were mentioned in the same breath as “no-hopers” only a few years ago. The factors that made Lithium what is was also held true for Rare Earths.

Let’s look at it. Both bubbled to the surface as sexy new things in 2009-10. A lot of press ink was spilled and scores of new vehicles were created. As we have often sustained the appearance of REEs “saved” Lithium from a similar bubble to be burst. Lithium plays were probably around 30 in number (and only 20 of any real substance) when REEs burst on the scene and created 100/200/300 listed plays (depending on your calculations).

If REEs had NOT appeared then Lithium too would have been massively overpopulated. When it came down to it, there were two REE plays that got across the production line (Lynas and Molycorp) and only two new Lithium plays managed the same feat (Galaxy and Talison) and even in the case of Talison it was the reopening of an existing Lithium mine.

Indeed, like REEs, there was attrition in the producers with Galaxy selling its plant in China and shutting its mine in Australia (Mt Cattlin). Sounds rather like Molycorp, except that Molycorp went bankrupt while Galaxy has lived to fight another day. And then there was one, Lynas in Rare Earths and Talison (bought in the meantime by Tanqi and Albemarle/Rockwood).

At the darkest hour the few score Lithium plays had shrunk to a mere handful while the REE space had shrivelled from hundreds to little more than ten still in contention (companies like Alkane, Peak, Ucore and Search).

Then began the Lithium renaissance and the rest is history there. However in the Rare Earth space the turn is yet to come. The creation of the first “new” listed REE entity would be a sure first swallow of summer.

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