The Week in Rare Earths (June 30)

In addition to our normal sections, this week we include dedicated write ups of the new Quad Critical Minerals Initiative, Russia’s efforts to get back in the REE game and India’s continued critical minerals diplomacy via Modi’s 5-nation tour. Japan is also going to be digging in the seabed mud…

In the background there is of course the US-China “deal” and parallel efforts by Beijing to leverage REE supply to the EU, India, Korea, Japan to narrow their abilities to make commitments to the US that might be seen to harm Chinese interests. The US-China “deal” is conditional upon performance where it comes to REE export licenses and shipments, and the pace of implementation will depend in part on how well Beijing’s discussions go with everyone else. This all points to slow progress, resource hoarding that reduces effective market supply and all the other second order impacts the originate with continued US-China tensions.

Regardless, the past week saw a steady stream of new exploration efforts, country-level initiatives and major company developments, all detailed below.

Another item that received due attention this week was a new and lengthy report from Hallgarten & Company analysts Sergei Shulin and Christopher Ecclestone, arguing that the West’s scramble to diversify supply is “akin to giving a razor to a monkey,” because the fundamentals of rare earth chemistry remain poorly understood even among policymakers who now approve funding checks with record speed. The report titled The Essence of Rare Earths – Dispelling the Myths (LINK) paints a picture of Western governments “in panic mode,” dangling grants and tax credits from capitals everywhere. Their point is that the essence of rare earths is less about their rarity than the rarity of clear thinking in policy terms. This is certainly true, and there will be no shortage of wasted funding and companies simply trying to flip exploration/mining licenses rather than make a tangible contribution to alternative sources of supply. Nevertheless, the initial global conditions at the time of China’s latest supply shock are very different compared to 10 years ago, and we remain more confident than snarky naysayers that 10 years hence China will no longer have a stranglehold on refined production.

In market terms, while the overall rare earth market showed stable pricing dynamics, a clear bifurcation emerged between relatively steady conditions for light rare earths and strengthening sentiment for medium-heavy rare earths, driven largely by targeted purchases from major industry players. Looking forward, market participants anticipate a possible recovery in downstream demand later in July, potentially supporting incremental price gains towards the end of the month.