US Congress tries to stop reliance on China for rare earths
The measures introduced in the bill would offer tax incentives to American companies engaged in mining, reclaiming and recycling rare earths - critical minerals and metals - from deposits at domestic sites. The bill was drawn up by the Republican Lance Gooden and Democrat Vicente Gonzalez, both of whom represent the state of Texas.
The new bill is Congress’s latest move to place a more local emphasis on industrial supply chains, rather than import materials from China and other competing economies. Rare earths are an important part of the national defence effort, and are vital components in a range of other priority industries, from electric vehicles to renewable energy. There has been concern in the United States that China may begin to limit the volume of rare earths that it exports to America, in light of the simmering trade war between the two nations.
In a telephone interview with Bloomberg, Pini Althaus, CEO of USA Rare Earth, which is currently developing the Round Top Mountain deposit in Texas, commented: “The tax incentive seeks to level the playing field with regard to the subsidies China provides from mine to magnet. It would significantly improve the bottom line of any domestic rare earth project.”
In another interview with Bloomberg, Jim Litinsky, the CEO of MP Materials - currently the only American mining company involved in the exploration of rare minerals - said that the new bill “lowers the cost of capital, which is the goal because China has lowered the cost of capital for their sector, and our sector needs to be able to compete. It’s probably the one thing I’ve seen everyone get behind”.
Lynas revenue jumps 21% as rare earth prices jump
Australian miner Lynas Rare Earths posted a 20.6% rise in revenue in the March quarter as selling prices for the key metals it mines hit record highs amid strong demand, particularly for neodymium and praseodymium (NdPr).
NdPr is used in magnets for electric vehicles and windfarms, in consumer goods like smartphones, and in military equipment such as jet engines and missile guidance systems.
The company said it plans to maintain production at 75% however, as it seeks to continue to meet covid-19 safety protocols and grapples with shipping difficulties. Shares in Lynas fell 6.1% after the results.
“They have faced a few logistics issues, and it would be good to know when they are going to start lifting their utilisation rates a bit,” said portfolio manager Andy Forster of Argo Investments in Sydney.
“Pricing has been pretty strong although it may have peeled back a bit recently. I still think the medium, long-term outlook is pretty good for their suite of products.”
Lynas post ed revenue of A$110mn ($85.37mn) for the three months to the end of March, up from A$91.2mn a year earlier as prices soared.
It said its full product range garnered average selling prices of A$35.5/kg during the March quarter, up from $23.7 in the first half of the financial year. “While the persistence of the covid crisis, especially in Europe, calls for careful forecasts for our business ahead, we see the rare earth market recovering very quickly,” said Lynas, the world’s largest rare earths producer outside China.
Freight demand has spiked during the pandemic, while the blockage of the Suez Canal in March delayed a shipment to April.
Lynas’ output of 4,463 tonnes of rare earth oxide (REO) during the quarter was marginally lower than 4,465 tonnes from a year earlier.