
More importantly, he suggested that the loss of WTO quotas will lead to less transparency and less security of supply from bigger producers for buyers outside of China overall. That's because continued consolidation in China's rare earths industry has put production in the hands of mid-level managers who are most likely to follow export orders in hopes of being promoted — quotas or no quotas.
The good news is all that could mean opportunity for players outside of China if buyers start to change their minds about paying a premium for secure supply of rare earths. Production and prices Ryan Castilloux, founding director and market research analyst at Adamas Intelligence said that it's been a quiet year overall for the rare earths industry. However, he did point out, "China's exports of rare earth oxides and metals have increased approximately 25% year-over-year, marking the dawn of a cautious revival for the rare earth industry, as we describe in a recent video presentation hosted by Technology Metals Research." Looking back at 2013, Castilloux noted that a report from Adamas predicted it would be best for some explorers to remove cerium from their saleable basket of rare earths "given that cerium is vastly oversupplied and its price does not warrant the cost of separation and purification." This year, the analyst has indeed seen several exploration projects move in that direction, and he expects the trend to continue. In terms of prices, it's been a rather lackluster year for rare earths. However, Hykawy has noted that prices for neodymium — one of the magnet rare earths — held up rather well in 2014. Companies weigh in Responding to a survey on the market this year, Mark Saxon, CEO of Tasman Metals (TSXV:TSM), reiterated wider sentiments on the resource sector. He "anticipated a difficult [2013], but with a market rebound," but was disappointed to see that rebound turn out to be weak and short lived. To be sure, the biggest challenge for Tasman this year has been maintaining the momentum of its project while still protecting cash reserves.However, the company has still made good progress with one of its major assets: the Nora Karr heavy rare earths project in Sweden. Tasman reached a milestone in the development of its metallurgical flowsheet for the project this summer, and recently announced the completion of a drill program aimed at collecting a representative metallurgical sample.
Ucore Rare Metals (TSXV:UCU) also responded to the survey on December 2, stating that although it's certainly been another year of commodity sector declines, the company is pleased with its progress this year. A spokesperson for Ucore cited the successful completion of a summer drill program, the successful production of a 99-percent-plus pure heavy rare earths mixed concentrate with over 99-percent recovery and "[t]he unanimous support of SB99 permitting the Alaska Industrial Development and Export Authority to fund up to $145 million or 70 percent" of the CAPEX for its Bokan-Dotson Ridge project in Alaska as key milestones for the year. Certainly, it's been a quiet year for the rare earths market, but that doesn't mean some companies haven't seen good share price performances — as of November 13, at least three were up over 40 percent, and they've all increased their gains since then. GéoMégA Resources (TSXV:GMA) is now up about 80 percent year-to-date, while Namibia Rare Earths (TSX:NRE) has gained 60 percent and Mkango Resources (TSXV:MKA) is up 50 percent. Overall, China still took center stage in the rare earths market in 2014, but there were a few rumblings pointing to growing rare earths production outside of the country. Check back for our outlook on the rare earths market in 2015. Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article. Related reading: Rare Earths Outlook: Prices to Rise, Western Producers Cutting Into Chinese Monopoly