Today's Market View - Magnet metals for Drones, Turbines and Automobiles

Rare Earth Metals

Supply vs. demand

Magnet metals for Drones, Turbines and Automobiles

Neodymium and Praseodymium ‘NdPr’

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Demand:

• Fundamental to green technology application, rare earth oxide consumption is benefiting expanding ‘high-tech’ markets.
• Weight-saving potential of permanent magnets (PMs) is creating the biggest blind spot in the raw metals EV supply chain for rare earth elements.
• NdPr-based (neodymium-praseodymium) motors enable 15-20% battery capacity savings in Li-ion EVs to enhance driving range and usability.
• ~600kg/MW rare earth requirement is creating significant wind turbine demand as global capacity forecast to rise by up to 1.9TW by 2050.
• Unprecedented role of rare earth PMs in global miniaturisation.
• International Federation of Robotics forecast 1.7m new robots transforming global factories by 2020.
• NdPr permanent magnets will be essential in growing global drone market – a US$100m market opportunity.

Supply:

• Industry consolidation and broad upgrading of production quotas have mitigated rife illegal mining across China, providing improved global supply clarity and price stability, while limiting environmentally degrading practises.
• Global trend of ethical metal sourcing is highlighting the substantial cost of rehabilitating unsanctioned activity, estimated at $30bn.
• Chinese government environmentally-focused legislation is restricting oversupply, drawing down swollen inventories and bringing the market into balance.
• China inflection point as net importer expected 2019/2020.

Companies referenced within this note:

• Mkango Resources* (LON:MKA)
• Peak Resources (ASX:PEK)
• Hastings Technology Metals (ASX:HAS)
• Greenland Minerals (ASX:GGG)
• African Battery Metals* (LON:ABM)
• Altus Strategies* (LON:ALS)
• ARC Minerals* (LON:ARCN)
• IronRidge Resource* (LON:IRR)
• Phoenix Global Mining* (LON:PGM)
• Strategic Minerals* (LON:SML)

*SP Angel acts a Nomad and broker to Mkango Resources, African Battery Metals, Altus Strategies, ARC Minerals, IronRidge Resources, Phoenix Global Mining and Strategic Minerals.