Resumen de Rare earths: : Year in Review 2015
Industrial Minerals
One of the biggest stories of the year was Molycorp Inc. filing for Chapter 11 bankruptcy protection in the US in late July. Previously one of only two major suppliers of rare earth products outside of China, Molycorp was forced to mothball its historic Mountain Pass mine in October. This brought a production stream offline which, according to Molycorp, in Q1 2015 had produced 1,479 tonnes rare earth oxides and 1,328 tonnes in Q4 2014.
While Molycorp's demise was probably the most eye-catching story of the year in Western media, the most important development for the industry in 2015 was the reaction to the 2014 World Trade Organization (WTO) ruling on rare earths policy in China. The international trade body demanded that China remove its export taxes on the elements and some derived products, which resulted in a policy shift from export quotas and export taxes to production quotas and resource taxes. In May, the resource tax rate for light rare earths was pegged at 11.5% in Inner Mongolia, 9.5% in Sichuan province and 7.5% in Shandong province. Middle-heavy rare earth resource taxes were set at 27%.
Lynas Corp. Ltd had a more positive 2015 than most, despite continued unprofitability. The company registered two quarters of positive free cash flow as of September 2015. In addition, Molycorp's suspension of production means that Lynas is now the sole major non-Chinese rare earths supplier, significantly increasing its standing in terms of supply security. Buyers seeking non-Chinese material will only be able to acquire this, directly or indirectly, from Lynas, a substantial advantage for the company. In addition, its performance in 2015 enabled the company to reduce interest payments on its loans.
