Engineering & Mining Journal

DEC 2015

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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Global demand for rare earths is fore- cast to increase 3.5% per year to 149,500 metric tons (mt) in 2019, val- ued at $4.5 billion. The largest increas- es are forecast for the permanent mag- net segment, boosted by expanding pro- duction of advanced neodymium mag- nets for applications such as wind tur- bines and hybrid and electric vehicles (H/EVs). Rising output of nickel-metal hydride (Ni-MH) batteries is also expected to fuel rare earths demand. In addition, upgrades to oil refining sec- tors in emerging countries are projected to boost global catalytic cracking capacity, supporting the production of fluid cracking catalysts, and associated demand for lanthanum and cerium. Rising production of steel, motor vehi- cles, and electronics is also expected to drive rare earths consumption. These and other trends are presented in World Rare Earths , a new study from the Freedonia Group Inc., a Cleveland- based industry research firm. China will remain the leading con- sumer of rare earths, accounting for more than two-thirds of global demand in 2019. Analyst Carolyn Zulandt noted that "growth in the Chinese market will be driven by healthy increases in the country's output of neodymium mag- nets, Ni-MH batteries and refinery pro- ducts." Japan will remain the second- largest global market, benefiting from a large domestic electronics manufactur- ing sector and robust demand for rare earths in the production of batteries, magnets, and polishing powders. The fastest gains of any major market world- wide are projected for India, where ris- ing domestic production of motor vehi- cles and metal alloys, as well as expanding catalytic cracking capacity, are expected to boost rare earths con- sumption. India is also developing local production of rare earth magnets, although this market will remain small in the near term. China will continue to account for the majority of rare earths mining out- put through 2019, although its share of total production is expected to drop as a number of new projects in Canada, Tanzania, South Africa and other coun- tries begin commercial production. Major output increases are also expect- ed in Australia as Lynas continues to ramp up production following capacity expansions. However, junior mining companies looking to develop new deposits will struggle to obtain invest- ment for these ventures as prices for rare earths will remain depressed, due in part to rampant illegal mining activ- ities that continue to plague China's industry. World Rare Earths (published Novem- ber 2015, 318 pages) is available for $6,300 at www.freedoniagroup.com. M A R K E T S 96 E&MJ; • DECEMBER 2015 www.e-mj.com (December 2, 2015) P r e c i o u s M e ta l s ( $ / o z ) B a s e M e ta l s ( $ / m t) M i n o r M e ta l s ( $ / m t) E x c h a n g e R a te s ( U . S . $ E q u i v a l e n t ) Gold $1,053.20 Aluminum $1,460.00 Molybdenum $10,500 Euro (€) 1.119 Silver $13.97 Copper $4,589.00 Cobalt $24,250 U.K. (£) 1.516 Platinum $838.00 Lead $1,639.00 Canada ($) 0.822 Palladium $535.00 Nickel $8,845.00 Ir o n O r e ( $ / d m t ) Australia ($) 0.783 Rhodium $720.00 Tin $15,200.00 Fe CFR China $40.70 South Africa (Rand) 0.083 Ruthenium $42.00 Zinc $1,531.00 China (¥) 0.162 Gold and silver prices provided by KITCO Bullion dealers (http://www.kitco.com). Platinum group metals prices provided by Johnson Matthey (http://www.platinum.matthey.com). Non-ferrous base and minor metal prices provided by London Metal Exchange (http://www.lme.co.uk). Iron ore prices provided by Singapore Mercantile Exchange (SMMBIO). Currency exchange rates were provided by GoCurrency.com. Demand for Rare Earths Will Grow Steadily World Rare Earths Demand (metric tons) % Annual Growth 2009 2014 2019 2009-2014 2014-2019 Rare Earths Demand 98,025 125,900 149,500 - 5.1 3.5 China 57,085 0 81,140 0 99,900 - 7.3 4.2 Japan 15,842 0 13,930 0 15,000 -2.5 1.5 United States 0 6,614 00 8,540 00 9,020 - 5.2 1.1 Rest of World 18,484 0 22,290 0 25,580 - 3.8 2.8

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