This brief Update Note on the global rare earth elements market should be read as a follow-on from our industry commentary published in July 2017, entitled “Rare Earth Elements: Time to Invest?”

It examines the developments within the industry over the past three years, and to what extent our various hypotheses set out in the 2017 report have come to fruition. It concludes with our updated thesis on the industry:

“The global rare earth elements (‘REE’) industry is undergoing a fundamental shift, as the rest of the world slowly begins to free itself from the shackles of quasi-monopolist China. A number of high quality, ex-China REE projects are now being rapidly developed, but are all still at least two years away from production. Consequently, with China curbing its exports and overall domestic production, and with the global rollout of renewable energy technologies that utilise REEs rapidly accelerating, we believe that a structural deficit in the global market approaches. Prices of the magnet REEs, especially NdPr, are thus likely to form a materially higher price base over the next three years. This will in itself facilitate the bringing online of the aforementioned ex-China deposits. As such, we retain our view that late-stage REE projects that possess mineralisation with a high NdPr ratio, and that have a visible path to production, will become highly sought after by investors going forward.”

Research note published in July 2017 on the global rare earth elements industry. Whilst outdated in several respects, we believe that the core thesis of the paper remains relevant.