Home' Australian Resources and Investment : September 2009 Contents 74 • SEPTEMBER 2009 • AUSTRALIAN RESOURCES & INVESTMENT
rare earth metals
The element is a rare, non-ferrous metal, atomic number 60 on
the periodic chart. For a relatively unknown material, the range
of neodymium s uses is quite large, including its use in
loudspeakers, microphones, iPods, Blackberries, and green
technologies including electric cars and wind turbines. Neodymium is
part of a group of metals called rare earth metals , that are necessary
for production of a great deal of new technological products, and green
technology, earning them the unofficial name of technology metals .
Neodymium s perceived increase in value in light of the necessity of
the development of green technology has seen the beginning of a
battle between wealthy nations and emerging countries. Rare earth
metals are seen as the vitamins of the green energy market, and are
now attracting great interest. The United States, China and Japan are
involved in a tug-of-war involving neodymium, samarium and
praseodymium, and their alternatives.
Currently, China produces 97% of the world s rare earth metals, with
production in Australia, Indonesia, South Africa and the United States
making up most of the remainder.
Australia is one of few countries that have large supplies of rare
earth metals. Several ASX listed companies are in possession of large,
rich deposits, including Lynus, Arafura, Alkane
Resources and Navigator Resources. There are also
significant deposits at the Olympic Dam iron oxide
copper gold deposit and the Mt Gee uranium rare
earth deposit in South Australia. Few of these
deposits are being mined, however, because with
the onset of the global financial downturn, many
don t have the financial strength to run rare earth
metals operations. This means turning to investors,
and the foreign giants are ready to pounce.
China s recent investment in two of Australia s
rare earth metals mines solidifies the monopoly
that they have over the market. The Chinese
investment in Lynas and Arafura has seen the
acquisition of over half of Lynas and a quarter of
Arafura by Chinese companies. This gives China
control of the majority of rare earth deposits
outside of China.
The powerful Asian nation has long been aware
of their potential market domination when it comes
to rare earth metals. As early as 1992, Deng
Xiaoping, spoke of the future for China, saying,
"The Middle East has oil; we have rare earths. We
must develop these rare earths."
Concern is building that China will tighten its
stranglehold on the rare earth metals industry, and
will prohibit sale of neodymium for future delivery
outside of their territories, and that they will
perhaps even go as far as to cease sales within
China if intended for export. Since 2002, China s
rare earth metals exports have dropped from 60,000 tonnes to a
predicted 30,000 tonnes for 2009. It s expected that China will aim for
complete dependency in the rare earth metals market.
Companies who operate outside of China are hence expected to
experience difficulty when attempting to operate without influence from
the Asian powerhouse, because a vast majority of the technology used
to refine the raw materials is found in China.
Lynas Executive Chairman, Nicholas Curtis, emphasises the retention
of the Lynas board, including retaining his own position as Executive
Chairman. The Lynas board will be extended to include four Directors
appointed by China Nonferrous Metal Mining Corporation, to match the
four existing Lynas board members. The company is quick to point out
that although CNMC now owns in excess of 50% of Lynas, the resources
will not be sold exclusively to China, and that CNMC is on board purely
as an investor.
For the global mining community, it is hoped that some grip on the
small percentage of rare earth metals found outside of China can be
retained. This might prevent the same kind of energy domination that
happened with oil in the Middle East from happening again with rare
earth metals in China.
Rare Earth Metals --
More precious than gold?
Electric cars and wind turbines are familiar concepts to most of us these days,
but how many people know what neodymium is, or what connection it has to
these energy advancements? Neodymium is used in these, and other,
renewable energy developments, bringing it right to the centre of the green
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