Dysprosium: This future-facing metal is facing a supply dilemma that could put the brakes on electrification

A funky, somewhat lesser-known rare earth element (REE) is back under the spotlight, following another grim prediction about our prospects of finding enough future-facing metals.

Consultants from McKinsey have added their voices to those who warn of extreme shortages in the years to come for metals like dysprosium – a REE used in most electric motors – which could see a deficit of up to 70% by 2030 unless mitigation measures are put in place.

While all magnet REEs are expected to fall short of future production needs, the consulting firm believes dysprosium and terbium are the most constrained.

Both elements are added to permanent magnets to improve thermal stability and energy density, which in turn increases the power and size efficiency of the magnet.

Although the quantity may be small compared to that of neodymium, dysprosium is much scarcer and consequently, a critical factor in terms of REE supply.

A dysprosium shortage would limit the production of permanent magnets used in the electric motors of most battery electric vehicles (BEVs), McKinsey says, as well as the drivetrains of wind turbines – where demand for about 20% of onshore and 70% of offshore wind turbines comes from.

While several uncertainties remain about how the energy transition will play out, one thing is for sure.

Net-zero has sparked a “materials transition” and the extent to which global materials supply chains can keep up with new sources of demand will be a determinant of global decarbonisation rates.

But which ASX stocks have dysprosium anyway?

Northern Minerals (ASX:NTU) is one of the only ASX players with a sizeable heavy rare earths discovery at the Browns Range project in WA.

Boasting a mineral resource estimate of 10.81Mt at 0.76% TREO (of which 88% are heavy rare earth oxides) the company is positioning Browns Range to be the first significant dysprosium producer outside of China.

A rare earth concentrate supply agreement was signed with Iluka Resources (ASX:ILU) in October 2022 covering the initial 8+ year mine life from Browns Range, which includes the production of dysprosium as well as terbium.

Building on the work undertaken in its earlier 2015 DFS, NTU expects to release an updated DFS in Q4 and is targeting a financial investment decision in Q1, 2024.

ASX explorers with dysprosium

IONIC RARE EARTHS (ASX:IXR)

This $94.70m market cap explorer has proven its ability to recycle magnet rare earth oxides after its demonstration plant in Belfast, UK produced high-quality neodymium oxide and dysprosium oxide.

The milestone production of 4.2kg of 99.7% grade of the light REE neodymium oxide and 0.6kg of 99.8% grade heavy REE dysprosium oxide comes less than nine months after the company received UK Government support.

Importantly for IXR, the success supports further opportunities for commercialisation globally and cements its “first mover” advantage in the recycling of separated magnet REOs.

Being able to recycle waste permanent magnets will help alleviate the projected deficit for MREOs as the market grows from the current US$3bn to US$15bn by the end of the decade.

DY6 METALS (ASX:DY6)

DY6 might only have listed last week, but it already has a drilling program underway to test for heavy rare earths and niobium at its flagship Machinga project in Malawi.

Machinga is just 40km east-southeast of Lindian Resources’ (ASX:LIN) Kangankunde project, one of biggest rare earth projects outside China.

Previous exploration at Machinga has already proved that niobium and heavy REEs such as dysprosium (Dy) are present with trenching in 2010 yielding a result of 15m grading 0.45% total rare earth oxides (TREO) and 0.75% niobium oxide (Nb2O5) including 5m at 0.54% TREO and 1.34% Nb2O5.

To date, the company has drilled seven reverse circulation holes totalling 840m out of the planned 5,000m combined RC and diamond drilling program, with the diamond rig due to be mobilised to site by the middle of July.

Samples from the soil sampling have been despatched to ALS laboratories in Johannesburg for preparatory work prior to full suite analysis in Perth while drill samples will be sent to Perth for analysis.

KINGFISHER MINING (ASX:KFM)

Kingfisher has made discoveries of both hard rock and clay REEs mineralisation at the Mick Well project in WA’s Gascoyne region, a new hot spot for rare earth exploration.

Carbonatite targets have been identified along the 54km ‘Chalba’ target corridor, which has been described by the company as an “enormously encouraging” early development, expanding the project footprint beyond the Mick Well area.

The strike of the mineralised zone which hosts the high grade MW2, MW7 and MW8 rare earths discoveries at the CH1 intrusion has doubled to more than 5km, and a large-scale carbonatite intrusion has been confirmed at both the CH8 and CH11 targets with geological mapping and sampling.

VICTORY METALS (ASX:VTM)

In early May Victory Metals raised $3m to fast-track its North Stanmore rare earths elements (REE) project in Western Australia, focusing its efforts on establishing a mineral resource estimate (MRE) and conducting exploration drilling over the 118.5km2 tenement package.

Recent metallurgical test work turned up recoveries of light REEs up to 78% neodymium and 76% praseodymium as well as heavy rare earths including 79% dysprosium and 80% terbium, which will complement the pending MRE.

This program proved the potential to reduce downstream processing, as well as capital costs per product tonne at the project and another metallurgical program is already underway, to produce a mixed rare earths carbonate as the end product.

ASRA MINERALS (ASX:ASR)

A high ratio of heavy rare earths and a lack of radioactivity distinguishes Asra’s Yttria and Wishbone prospects, which contain a high proportion of the magnet REEs dysprosium, terbium, praseodymium, neodymium, and significant concentrations of scandium.

This means Yttria has the potential to deliver a reliable source of critical rare earths metals for the supply chain of high-end magnet users, especially in the production of EV and wind turbines.

Recent REE prices demonstrate that the Yttria basket of rare earths holds an indicative basket value of US$161/k, surpassing that of most clay-hosted rare earths projects currently in their exploration stage in Australia.

MOHO RESOURCES (ASX:MOH)

Although the original target commodities for the company’s Peak Charles project, 88km from Esperance in Western Australia, were nickel-copper sulphide and gold, the project has now shown large scale potential for clay basin-hosted rare earths mineralisation.

Moho’s tenements border the Grass Patch tenements of OD6 Metals (ASX:OD6) where high-grade clay rare earths have been identified through regional reconnaissance drilling.

A recent airborne geophysical survey identified a discrete radiometric anomaly within Moho’s Gimli clay-hosted REE prospect exploration area west of Salmon Gums.

Phase-2 aircore drilling has kicked off, focusing on the continuity of clay-hosted REE concentrations between Northern Track, Pyramid Road and Ned’s Corner prospects where grades up to 1,890ppm TREO were intersected.

Dysprosium stocks

At Stockhead we tell it like it is. While Ionic Rare Earths, DY6 Metals, Victory Metals and Asra Minerals are Stockhead advertisers they did not sponsor this article.