Western miners target China’s rare earth metals grip with premium prices

Western miners target China’s rare earth metals grip with premium prices

A few critical mineral explorers from Canada, Germany, and Australia are planning to charge higher prices for key metals used in electric vehicles (EVs) in order to reduce reliance on China, the dominant producer and price-setter. China currently controls 95% of the production and supply of rare earth metals, which are essential for manufacturing magnets for EVs and wind farms. This monopoly has allowed China to dictate prices and create turmoil through export controls.

Mining companies like Aclara Resources and Ionic Rare Earths are discussing plans to loosen China’s grip on the critical minerals market and move towards market-determined prices. Neo Performance Materials and Vacuumschmelze, Canadian and German mining companies respectively, are also considering similar plans. These companies believe that geopolitical tensions between the West and China pose a risk to the reliable supply of rare earth minerals.

Aclara Resources, for example, is looking to mine heavy rare earth metal and is in talks with original equipment manufacturers (OEMs) for premium pricing as part of a long-term offtake deal. The miners expect end users to pay a premium in exchange for reliable and sustainably sourced rare earths that are crucial for the transition to cleaner energy.

The miners believe that manufacturers will absorb the extra costs due to new environmental, social, and governance-related legislation and tax incentives. They argue that a premium price is warranted for rare earths that are key to the transition to cleaner energy. However, OEMs want a transparent, sustainable, and reliable pricing system to ensure a level playing field.

Developing rare earth mining projects can take decades, and investor risk aversion has derailed the viability of some projects outside of China. While Vietnam, Malaysia, and Myanmar offer alternatives to China, their final production remains distant. Companies have suggested pricing alternatives such as selling rare earth concentrates at half their cost of production plus capital cost or capping prices at those offered by Chinese rare earth makers.

These pricing mechanisms could increase the cost of EVs, which use rare earth magnets in their motors, by at least 30% to 50%. However, the miners argue that the cost is necessary to ensure sustainability and minimize carbon footprints. OEMs may not be willing to pay higher prices for high-volume purchases like lithium, but for strategic minerals like cobalt, copper, and rare earth metals, there is a good opportunity to find a mining partner.

Overall, the goal is to reduce reliance on China and establish a more diversified and sustainable supply chain for critical minerals used in EVs and other clean energy technologies.

About News Team

Hi, I'm Alex Perez, an experienced writer with a focus on lifestyle and culture news. From food and fashion to travel and entertainment, I love exploring the latest trends and sharing my insights with readers. I also have a strong interest in world news and business, and enjoy covering breaking stories and events.

Have a tip we should know? tips@rhd.news

Most Read

  1. News
    Pandora Papers Financial Leak Shows Us the Secrets of the World’s Rich and Powerful
    3 years ago
  2. Health
    US Supreme Court Rejects J & J TALC Cancer Case Appeal
    3 years ago
  3. Lifestyle
    9 Habits that Drain your Daily Focus and How to Avoid Them
    3 years ago
    Women’s Demand for Shapewear – the big Trends
    3 years ago
    Valentino Launches its Cosmetics Line
    3 years ago
  6. Health
    US Promises to Share 60 million Doses of AstraZeneca Vaccines
    3 years ago
  7. Health
    UK Offers Aid Amid Surging COVID-19 Cases in India
    3 years ago
  8. Sports
    Thousands of fans welcome Charlton funeral cortege at Old Trafford
    7 months ago
  9. News
    Brit left fighting for life after train derails in Argentinia
    7 months ago
    Dubai faces down airline rivals with $50 bln jet orders
    7 months ago
  11. Sunak
    UK’s Sunak brings back Cameron, sacks Braverman
    7 months ago
  12. Sports
    Man United’s Hojlund, Eriksen withdrawn from Denmark team duty
    7 months ago
  13. Health
    Autumn Sneezing Syndrome is on the rise… here’s what you can do
    7 months ago
  14. Canada
    Canada beat Italy to win Billie Jean King Cup for first time
    7 months ago

Follow @rushhourdaily: