Paulick and Machaeck reported in 2017 on the mineral resource definitions from the exploration boom that followed the rare earth element (REE) price peak of 2011, and finds that:
1. the delineated REE mineral resources outside of China reached a total of 98 Mt contained total rare earth oxides in 2015 with the majority located in Canada (38 Mt), Greenland (39 Mt) and Africa (10.3 Mt), representing a fivefold increase between 2010 (16.5 Mt combined) and 2015 (87.3 Mt combined).
2. a large portion of these resources contain REE bearing silicates as dominant ore mineral which have a higher heavy REE to light REE ratio than conventional carbonate-mineral REE resources.
The results highlight effective, stock market-financed exploration by junior companies and demonstrate REE resource availability outside of China. However, at current low prices, challenges to transform these resources from exploration to mining projects remain. These are tied to the up-scaling of beneficiation technologies for unconventional REE ore minerals and to raising investment for project implementation. In this context, the authors indicated that the successful delineation of these REE resources provide abundant options for expansion and investment in the REE industry which are most likely harnessed by the dominant REE market player, China. Concerns about China’s dominant role are therefore likely to persist.
The authors further concluded that the surge in REE exploration activities carried out by junior exploration companies which secured funding from stock markets during REE peak price conditions. This coincided with a phase of generally high levels of global mineral resource exploration. The investments in the REE exploration sector led to the definition of about 98 Mt of REO in resources outside of China within 5 years (2011–2015), demonstrating the capacity of the junior exploration sector to react quickly to price dynamics in the mineral raw material market.
The authors' detailed investigation of geological, economic and strategic issues pinpoint the following issues:
1) REE deposits are fairly common outside of China. However, in terms of resource tonnages and average grade there are only a few that are comparable to current producing mines.
2) Funding for exploration activities was readily available from the public stock exchange at the time when REE prices were rising, nurturing hopes for high returns on investments.
3) REE resources were defined in many countries, however, the highest concentration of newly defined TREO resources are in Canada (38 Mt), Greenland (36 Mt) and Africa (Kenya, Tanzania, Malawi, South Africa; 10 Mt). Combined, this represents a fivefold increase compared to estimates from 2010 for these jurisdictions.
4) Since their peak in 2011, REE prices declined substantially and global production appears to have stabilize at about 110,000 t/a. Concurrently, there is a substantial decrease in public interest in stocks of REE companies. The REE producers that managed to kick-start REE mining and processing outside of China are affected by declining share prices (e.g. Molycorp, USA; Lynas, Australia), as well as companies pursuing project development and feasibility studies.
5) In the current situation, an opportunity presents itself to acquire REE resources to secure long term supply of REE bearing minerals: Investors with processing facilities can choose from a broad range of defined REE deposits at bottom-of-the-market prices, illustrated on the case of Australian registered GMEL and Chinese NFC. This opportunity arises in the context of REE mining production in China that is under pressure to meet stringent environmental legislation, limited mining quota allocation to some REE processing operations due to consolidation plans, and challenges for REE mining at the important Bayan Obo mine. At Bayan Obo, REE are a by-product of iron ore mining, exploiting a comparatively low-grade Fe resource, which faces competition from high-grade iron ore production in Australia.
Overall, the net effect of the situation suggests that the country with the most highly integrated REE market from mining to processing, and use in the manufacturing of electronics and high-tech industry may realize most benefit from the resource definitions achieved by the global REE exploration boom. Hence, the investments in junior companies to fund REE exploration activities have arguably only one country that is well enough positioned to take advantage: China.
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