Arafura Australia says South Korea and Germany are exposed to a rare earths shortage.
The United States, Japan and Australia are locking down rare earths supply, leaving industrial giants Germany and South Korea vulnerable, according to the CEO of Australia’s Arafura Rare Earths. This company is currently negotiating final agreements for supply.
The U.S. is leading a global push to diversify supply chains and secure new sources of supply after China, the world's largest producer of rare earths, placed export restrictions last year. This shook the automotive and defense industries.
Only two Western companies produce at scale. Australia's Lynas Rare Earths, and MP Materials in the U.S. with its Mountain Pass?deposit.
Last year, the U.S. Government secured Mountain Pass supplies as part of an agreement with MP Materials.
Darryl Cuzzubbo, CEO of Arafura, said that "(That?)?doesn’t meet all of their needs but it does a good chunk."
Lynas?Rare Earths has also agreed this month to a long-term agreement with Japan Australia Rare Earths until 2038, and a shorter-term, smaller deal with the Pentagon. "So, the EU, Germany and Korea in particular are exposed, right?" What?is their?supply going to be? Cuzzubbo said.
Arafura noticed that potential buyers were more urgent since Lynas supply had been locked up.
Nolans Project Supply
Arafura plans to supply from its Nolans Project in the Northern Territory 4,440 metric tons a year of neodymium-praseodymium (NdPr) oxide, a key rare-earth magnet material from the second half of 2029, representing around 4% of global supply.
It has already signed supply agreements with Hyundai Motor, Kia, Siemens Gamesa Renewable Energy as well as commodity trader Traxys.
He said that Arafura was seeking to secure another 1,200 tons of NdPr as a condition imposed by its lenders. Arafura can then make a final decision on the project and start construction.
He said, "We don't want to put all our eggs in one basket. So, we are negotiating with several parties. The one who gets the best pricing first is the one we will go with."
He said Arafura wanted to achieve terms similar to those of Lynas.
Lynas agreed to a price per kilogram of NdPr of $110 in both agreements, along with terms for payments at higher prices. Prices based in China
(source: Reuters)
