Rare earth prices hit four-year lows, stagnant despite demand growth projections
Despite significant government incentives to boost rare earth production outside of China, prices remain at four-year lows of $US45-$55/kg, making it difficult for non-Chinese producers to turn a profit. The rare earths are crucial for EVs, windmills, and defense applications, leading governments to seek ways to break China’s stranglehold on the market.
China controls the external market through quotas, keeping prices low to deter private sector investments in ex-China supply chains. With nearly half of potential projects requiring prices over $US115/kg for profitability, the incentive to compete with China is low.
One potential solution lies in Brazil’s emerging rare earth industry, offering low-cost production through ionic clay adsorption (IAC) and hard rock projects. ASX companies like Meteoric and Brazilian Rare Earths have seen substantial market value growth, leading the charge against China’s dominance.
Among the key players in Brazil’s rare earth industry are Equinox Resources and Viridis. Equinox is conducting a maiden drill program at the Rio Negro prospect in Bahia state, expecting initial results in June. Viridis, on the other hand, is focused on the Colossus project in Minas Gerais, with plans to release a maiden resource estimate next month and subsequent feasibility studies.
As prices stagnate and demand continues to rise, the race to establish a viable rare earth supply chain outside of China intensifies. Brazil’s emerging industry presents a promising opportunity for non-Chinese producers to compete on a global scale and potentially challenge China’s dominance in the rare earth market.
