High Voltage: Neodymium and praseodymium are rare as rocking horse s..t
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Our High Voltage column wraps all the news driving ASX stocks with exposure to lithium, cobalt, graphite, nickel, rare earths, manganese, magnesium, and vanadium.
Rare earth magnets are at the heart of EV motor technology. They aren’t actually that rare, but they are hard to find in commercial qualities, and even harder to process and separate.
Prices for rare earths neodymium and praseodymium, the most valuable of the ~15 elements, have exploded to record highs in recent weeks.
“At the time of this writing, a kilogram of the blend costs $US163 – up more than fourfold from the ten-year bottom price of $US35,” writes the anonymous but intelligent person/ team at Doomberg.
It should come as no surprise that China dominates the rare earths supply chain.
It controls 80% of the whole thing – from mining through to processing and separation (which is very complex). There is no second place when it comes to rare earths, only first loser.
Despite moves by Western nations (Europe, the US) to set up mining and processing operations in-house, China will not give up its hard-won advantage without a fight.
This week, leading Chinese rare earth company Shenghe Resources (market cap: $US4.9 billion) swooped on Aussie junior Peak Rare Earths (ASX:PEK).
It acquired a 19.9% interest from a third party at A$0.99 per share: a 24.5% premium to the last closing price of Peak shares.
Shenghe also holds ~8% of, and offtake deals with, MP Materials Corp (NYSE:MP) – the United States’ only rare earths producer — and 9% in Greenland Minerals (ASX:GGG).
Peak’s main game is the ‘Ngualla’ rare earths project in Tanzania.The explorer is currently negotiating an Economic Framework Agreement for the project with the government.
“The project … [is] among the most advanced rare earth development projects that has a JORC Compliant Ore Reserve, completed definitive feasibility study, and fully piloted process from ore to separated oxides that is permitted and ready to construct,” the company said last year.
Construction of the downstream ‘Teeside’ refinery in the UK will occur in parallel with ‘Ngualla’ development.
Lithium prices keep rising. It’s getting boring, right?
Fastmarkets’ price assessment for battery grade lithium carbonate in China was 400,000-430,000 yuan ($US62,833-67,545) per tonne on Thursday February 10 — up by ~14% from a week earlier.
“Amid the scarcity of spot lithium units, we received a lot of inquiries for battery-grade lithium carbonate in the first week after Chinese New Year, and many customers have urgent needs. But we are sold out,” a Chinese lithium producer source told Fastmarkets.
Prices were on the rise as well outside China as well.
In battery grade carbonate was selling for $US50.00-52.50 per kg on the spot market on February 10 — up by 32% from the previous month.
“Small traders have no stock available and are ready to buy at any price,” one European lithium producer told Fastmarkets.
“Battery producers are grabbing all available stock and pushing all prices up, including technical grade,” another producer said.
In these market conditions, some European producers said they were revising long-term contracts and increasing the prices, if their contracts made this possible.
“If we did not have such clauses, it would be easier to withdraw from a contract, pay a fine for that, and offer our stock to the spot market to get profit,” he said.
“People are accepting a jump from $40 per kg into the $50s per kg more easily than [they would have accepted] an increase from $20 to $25 per kg [previously].”
Here’s how a basket of ASX stocks with exposure to lithium, cobalt, graphite, nickel, rare earths, magnesium, manganese, and vanadium are performing>>>
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