high purity re carbonate production, page-5

Stoops, this RE business is an unbelievable learning curve, every time you think you have a handle on it you find further distortions.

Re prices the disclaimer at the top of the Metal Pages RE price movements page reads:

"Prices are indicative, and based in warehouse Rotterdam duty unpaid unless otherwise stated. Metal-Pages welcomes feedback from producers, traders and consumers"

Note "based in warehouse Rotterdam", that suggests to me it's just the tiny Eu market ignoring the major Japan/Sth Korea/US markets.

"The Rare Earths MMI® collects and weights 14 global rare earth metal price points to provide a unique view into rare earth metal price trends."

Metal Miner "collects and weights......price points to provide a unique view". What the.......? Does that mean they are basically just guessing?

Effectively there is no structured market, volumes are tiny, 16kt last two years and some of that would be internal transfers as in Rhodia China to Rhodia France, Neo China to Neo Canada, some would be LT contracts in Ce/La for FCC & CC, the two largest remaining ROW markets. Take those out of 16kt and what would you have left? 4/5kt I'm guessing via various trading houses & merchants, go check Alibaba. Add to that the 4/5kt smuggled out of China (no prices reported there, lol) and you start to understand the tiny, fractured nature of RE trading. No wonder it was so vulnerable to pricing pressures 2010/11 and resulted in such demand destruction, also gave investors a totally false sense of the size of the business. In reality it's tiny and the great majority of it is commoditized i.e. Ce/La with Nd/Pr not too far behind.

Long & short of it is that CUX needs an offtake partner/s the same as any other RE wannabe. Look at Lynas's business plan, they were only proposing an initial 11ktpa at this point because that's all they thought the market would absorb. The second module (11ktpa) was brought forward (and fully funded) by Sojitz/JOMEC, effectively the Japanese Govt, with attaching 8500ktpa offtake.

No follow up on CUX's early mention of offtake interest but it will be their ability to put together the right product at the right price to attract offtake interest, and hopefully development finance, that will make or break them.

They seem to be progressing well but with RE's it's not just the ability to produce the stuff that counts, it's the ability to sell it that really counts.