Rare earths make electric comeback after bust – by Henry Sanderson (Financial Times – August 16, 2017)


After a spectacular bust in 2012 and several years of stagnant prices, rare earths mined mainly in China are making a comeback.

The expansion of electric vehicles and the renewable energy industry are partly behind this year’s renaissance for the 17 minerals, which are also used in smartphones and consumer electronics. Back in 2010 their soaring price caused such angst in Washington over China’s stranglehold on the market that the subject earned a subplot on the House of Cards TV series.

Additional mining capacity, as well as end users turning to alternatives, triggered a dramatic price collapse in 2012. Five years on and it is the role of rare earths in permanent magnets used in electric vehicles and wind turbines that has reignited interest.

The price of two rare earths, neodymium and praseodymium, has soared more than 50 per cent this year, sending investors into shares of the Chinese companies that mine such minerals. “Where prices had been was not sustainable for Chinese miners,” says Stephen Gill, a portfolio manager for Pala Investments. “And now there’s a new source of demand.”

The price for neodymium and praseodymium oxide, which are priced in tandem, is trading at $73.50 a kilogramme in China, compared to an annual average of $38.94 last year, according to consultancy Adamas Intelligence.

For the rest of this article: https://www.ft.com/content/44acde0a-81a2-11e7-a4ce-15b2513cb3ff