Why Rare Earth Metals Mining Companies are Benefiting from Surge in Electric Vehicle (EV) Popularity

FinancialNewsMedia.com News Commentary

PALM BEACH, Fla., Dec. 10, 2020 /PRNewswire/ -- The rise of the rare earth metals market continues to move upward as it parallels the recent and future upticks of the Electric Vehicle (EV) market. EV's need magnets and they are majorly made from rare earth metals. According to a report from Grand View research the rising demand for electric vehicles to reduce CO₂emissions is expected to propel the use of permanent magnets in the production of batteries. It said that the global rare earth elements market size was valued at USD 2.80 billion in 2018 and is estimated to witness a CAGR of 10.4% to 2025. A report from Brand Essence Research added to that projection saying that the market size will reach $20.6 billion in 2025. It said that: "Growing demand for magnets in automobiles, and energy generation will majorly contribute to the growth of global rare earth metals market over the forecast period. The demand for rare earth magnets is majorly increasing by their consumption in electric and hybrid vehicles... Increasing focus on utilizing clean and renewable energy is giving a substantial pressure on the electricity providers, to generate energy through renewable sources, which in turn will show a positive impact on the growth of this market.  Active stocks in the markets this week include Medallion Resources Ltd. (OTCQB: MLLOF) (TSX-V: MDL), Lynas Rare Earths Limited (OTCPK: LYSCF) (OTCPK: LYSDY), Tesla, Inc. (NASDAQ: TSLA), MP Materials Corp. (NYSE: MP), NIO Inc. (NYSE: NIO).

Cerium, neodymium, lanthanum, praseodymium, yttrium, and dysprosium are the most commonly used rare earth elements. Neodymium and praseodymium based rare earth permanent magnets are majorly used in the manufacturing of batteries. The market is driven by the increasing demand for these products in the manufacturing of magnets & catalysts for the automotive industry. Cerium is widely used as a catalyst in catalytic converters of motor vehicles while neodymium & praseodymium are used in the production of batteries for electric vehicles.  Grand Ville added: "The sales of the overall automotive industry increased (yearly)... The increasing demand for automobiles enables the manufacturers to maintain the supply-demand balance, thus increasing the production. This is expected to boost the demand for catalytic converters as they are used to reduce harmful vehicle exhaust emissions, thereby propelling the utilization of rare earth elements over the coming years… The magnet was the largest application segment in terms of volume and revenue in 2018. They are used in various applications such as in computer hard disc drives, linear actuators, servo motors, speakers & headphones, and sensors. The increasing demand for magnets in automobiles, turbines, and consumer electronics is anticipated to boost the consumption of rare earth elements over the forecast period."

Medallion Resources Ltd. (OTCQB: MLLOF) (TSX-V: MDL) BREAKING NEWS:  Rare Earth Element Prices Rise as Medallion Approaches Key Technical Milestone -  Medallion Resources Ltd. ("Medallion" or the "Company"), provides an industry update ahead of reporting the techno-economic assessment results for its proposed US rare earth element (REE) extraction plant, expected in Q1 2021.

Driven by high growth forecasts for electric vehicles (EVs), wind energy and electronics that require substantial volumes of high strength REE permanent magnets, the price of magnetic REEs have moved rapidly upwards in recent months. The price for neodymium (Nd) and praseodymium (Pr), together called "NdPr", has risen almost 50% this year to $65/kg after averaging $41/kg for the last decade. As all major automakers have committed to rolling out new EV and hybrid models, Swiss Investment bank UBS recently forecast NdPr pricing to move to $100/kg by 2025.

Medallion's proposed plant, using its proprietary Medallion Monazite Process, is expected to produce approximately 3,500 tonnes year of rare-earth products. This would include approximately 800 tonnes per year of the important magnet metals NdPr, the key input to the powerful and lightweight traction motors that propel EVs such as Tesla (NASDAQ: TSLA) and Nio Limited (NYSE: NIO).

All modern vehicle designs depend on lightweight motors to provide increased efficiency, achieved in part by incorporation of REE magnets. EVs and hybrid vehicles that demand longer battery range are particularly weight sensitive, and consequently typically utilize 100-150% more REE magnets than internal combustion engine (ICE) vehicles. With most EVs requiring an additional 1 kg of NdPr vs. ICE vehicles, Medallion's forecast NdPr output could supply magnets for 400,000 EVs per year.

"With current and projected pricing of NdPr we expect the economics from our independent techno-economic assessment to look very positive," said Mark Saxon, Medallion President & CEO. "We welcome approaches by prospective business partners as we progress towards final design and engineering."

Rare earth elements are again attracting interest in the investment community as MP Materials Inc. (NYSE: MP), which owns and operates Mountain Pass, went public November 18, 2020. With over 270 employees, MP Materials is the only operating REE mining and processing site in North America, and today ships a mineral concentrate to Shenghe Resources Holding Co., Ltd (Shanghai: 600392) in China for processing. Currently MP Materials produces approximately 15% of global rare earth output and plans to use recently secured capital to extend its operations downstream to include extraction, separation, and marketing of separated light REEs.

Such a move could present a non-Chinese marketplace competitor to Lynas Inc. (ASX: LYC) (OTC: LYSCF) (Frankfurt: LYI), the integrated Australian-Malaysian REE producer. Lynas also has designs on US value-add production and is constructing a heavy rare earth element separation plant in Plano, Texas, in partnership with privately held Blue Line Corp.  The Lynas-Blue Line combination will utilize a heavy REE concentrate imported from Lynas' Malaysian plant that produces and markets the light REEs cerium, lanthanum and NdPr.

Also vying for a slice of the US marketplace is Texas Mineral Resources (TMRC) Limited, proposing to develop, in partnership with privately-owned US Rare Earth Inc., the Round Top property in Texas, primarily for heavy rare earth elements, lithium and other critical materials.   Read this entire release along with charts and images for the Medallion Resources news at:  https://www.financialnewsmedia.com/news-mdl/ 

Other recent developments in the markets include:

Lynas Rare Earths Limited (OTCPK: LYSCF) (OTCPK: LYSDY) recently said the Malaysian state of Pahang had approved a permanent disposal site for waste treatment, fulfilling one of the key conditions for continuing its operations in the country.  Lynas, the only major proven producer of rare earths outside China, added that Gading Senggara Sdn Bhd has been appointed as the contractor to manage the project for $98 million.

In August last year, Malaysia renewed the operating license for Lynas' processing plant for six months with new conditions including the identification of a site for a permanent facility to store its low-level radioactive waste.  The Atomic Energy Licensing Board, an agency under the Malaysia's environment ministry, asked Lynas to present a plan to set up a cracking and leaching facility overseas within four years of the license renewal.

Tesla, Inc. (NASDAQ: TSLA) published its first ever U.S. Diversity, Equity and Inclusion Report which outlines the current state of our DEI position and actions Tesla is taking to engage with employees, candidates and community members, as they encourage talented people from all backgrounds to join the Company on its mission to accelerate the world's transition to sustainable energy. Read the full report at  https://www.tesla.com/blog/us-diversity-equity-and-inclusion-report

MP Materials Corp. (NYSE: MP), the largest rare earth materials producer in the Western Hemisphere, recently announced its financial results for the third quarter and year-to-date ended September 30, 2020. A more detailed review of the year-to-date results can be found in the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission.

"Our results show continued strong operational execution throughout 2020," said James Litinsky, Chairman and Chief Executive Officer of MP Materials. "With our business combination complete, MP has a fully equitized balance sheet to support the execution of our long-term plans to become a key supply chain partner as global industry advances towards electrification," added Litinsky. "Our next several quarters will be focused on our move downstream into production of higher-margin separated rare earths with a focus on NdPr. We expect to continue driving profitable growth as we produce our rare earth concentrate, which comprises 15% of global rare earth content today."

NIO Inc. (NYSE: NIO) recently provided its November 2020 delivery results.  NIO delivered 5,291 vehicles in November 2020, a new monthly record representing a solid 109.3% year-over-year growth. The deliveries consisted of 1,387 ES8s, the Company's 6-seater and 7-seater flagship premium smart electric SUV, 2,386 ES6s, the Company's 5-seater high-performance premium smart electric SUV, and 1,518 EC6s, the Company's 5-seater premium electric coupe SUV. NIO delivered 36,721 vehicles in 2020 in total, representing an increase of 111.1% year-over-year. As of November 30, 2020, cumulative deliveries of the ES8, ES6 and EC6 reached 68,634 vehicles.

NIO is in the process of accelerating the production capacity expansion in December 2020 to accommodate the increasing order growth.  NIO Inc. is a pioneer in China's premium smart electric vehicle market. Founded in November 2014, NIO's mission is to shape a joyful lifestyle. NIO aims to build a community starting with smart electric vehicles to share joy and grow together with users. NIO designs, jointly manufactures, and sells smart premium electric vehicles, driving innovations in next-generation technologies in connectivity, autonomous driving, and artificial intelligence. Redefining the user experience, NIO provides users with comprehensive and convenient power solutions, the innovative Battery as a Service (BaaS) program, and other user-centric services.

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