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Lifton further elaborated, “The supply chain is significantly impacted here. However, I want to caution that this allows the maintenance of high prices for these items in the United States and encourages price increases because many in the rare earth sector, especially the junior miners, are not profitable. By adding 25% to the price, they can sell their rare earth elements for 25% more, based on the contained value in a magnet from the Shanghai metal market, for example. This could make them profitable. Therefore, this change is going to trickle down to the miners and will definitely have an impact. This is a significant shift because, interestingly, a 45% tariff on magnets implies that, since the prices of magnets and rare earths fluctuate daily, the tariff ensures that the price on the day of sale or purchase will be 25% above the stated Chinese price, likely from the Shanghai metal market. This is a substantial boost for the rare supply chain. I’m not sure it benefits the American consumer, as it certainly won’t lower prices at all.”
https://investornews.com/critical-minerals-rare-earths/us-tariff-policy-towards-china-designed-to-alter-competitive-landscape-for-graphite-and-magnet-materials/
Thanks SP
The issue in rare earths reminds of what happened when fracking lowered oil prices. The fracking models high graded resource uptake from gas fields and in the end the fracking gas fields became depleted quicker and could not pay back bank debts. China has high graded rare earth resources from its mining especially where it was sourced from imports elsewhere in Asia. Several years of high grading lead to lower grade mining resources and the economic yield reduces. China has pursued the same failed policy as USA used to hit the Saudis a decade ago. In the end mining and resource uptake has to be undertaken at a particular target grade that is sustainable and economic. It then leads to the correct price discovery for that resource. Hopefully this will now happen with the correct use of tariffs. Hopefully China will stop high grading and move to the same economic models as non Chinese owned rare earth suppliers. The playing field then becomes more fair and tariffs can then be removed and the market is sustainable. Tony
Reetech
Treo percentage is a quarter of that found by Pensana in Sulima West in Angola. Sweden is a hugely expensive place to mine ore and I doubt if they will find a partner company. No contest against Rainbow Rare on cost and volume produced per annum.
“Following an in-depth review by the United States Trade Representative, President [Joe] Biden is taking action to protect American workers and American companies from China’s unfair trade practices,” the White House said.
Imports of Chinese permanent magnets will be subject to a 25% tariff beginning in 2026, the White House statement said.
“There are several types of permanent magnet but around 80% of the market is dominated by two of them: sintered neodymium iron boron [NdFeB] rare earth magnets, and hard ferrite magnets,” John Ormerod, head of magnetics and metal consultancy JOC, said.
Other types include samarium cobalt rare earth magnets, alnico (aluminium-nickel-cobalt) and bonded NdFeB rare earth magnets.
Sintered NdFeB rare earth magnets are critical components in the motors of electric and hybrid vehicles and in offshore wind turbines, along with many other industrial, defense, medical and electronics applications.
The first time critical minerals have been included in tariffs
There have been numerous rounds of Section 301 tariffs since the start of the US-China trade and technology war in 2018, but none of them has included rare earth magnets or materials.
According to Tuesday’s statement, “the tariff rate for certain other critical minerals will increase from zero to 25% in 2024.”
https://www.fastmarkets.com/insights/us-to-impose-25-import-tariffs-on-chinese-rare-earth-magnets/#:~:text=There%20have%20been%20numerous%20rounds,to%2025%25%20in%202024.%E2%80%9D
Tornadotony
" No contest against Rainbow Rare on cost and volume produced per annum."
Please clarify - production of what?
I am completely shocked that this hasn't moved north on that news. Mka have a forward plan for recycle plants in uk, Germany and US within 2 years.
People will be knocking down the door for these highly green untarriffed gems.
Freeing up some funds this week hopefully to add more.
Sorry last post on wrong board