Overseas rare earth resource development projects are increasing year by year, but on the whole, there are problems such as incomplete industrial chain, high environmental protection cost and low resource taste, and the capacity construction may not be as expected. In recent years, Chinese enterprises have also begun to increase the layout of overseas rare earth resources and constantly consolidate China’s leading position and voice in the global rare earth industry chain. At the current time, it is continuously suggested to pay attention to the strategic allocation value of China’s rare earth industry chain.
Overseas rare earth resource projects are increasing year by year, and most of them have a low degree of development. According to our incomplete statistics, there are 29 overseas rare earth resources projects at present. In terms of project schedule, two projects have achieved commercial mass production, namely MT weld project of Lynas company and mountainpass project of MP materials company; 14 projects have completed economic assessment (PEA) and feasibility report (PFS, DFS); Another 13 projects have reached the stage of in-depth exploration, mainly distributed in the United States, Australia, Africa and other regions. On the whole, the resources and reserves are less than those of China.
In 2025, the total capacity of overseas rare earth development may reach the planning peak. According to the development plans disclosed by overseas enterprises, the total capacity of overseas rare earth resources projects in 2025 is planned to be about 250000 tons of REO At present, most overseas rare earth resource projects are in the stage of pre feasibility study (PFS) or preliminary economic assessment (PEA), and there is still a long time to go before construction and development. If the preliminary preparations of overseas rare earth projects can be successfully completed in this round of rare earth price upward cycle, 2025 may become the release peak of capacity planning of overseas rare earth resource projects, but most projects have not yet started construction, It is estimated that from 2022 to 2023, the contribution of overseas rare earth resources projects to the global rare earth supply is relatively limited, and the new capacity is about 3 Tianma Microelectronics Co.Ltd(000050) 000 tons of REO.
The development environment of overseas rare earth resources is complex, and the production capacity may be lower than expected. The developed automobile industry in Europe and North America and the rapidly developing power battery industry have an increasing demand for rare earth raw materials. In order to reduce the dependence on China’s rare earth supply chain, overseas attach great importance to the development of rare earth resources. At the same time, the development environment of rare earth mining in European and American countries is relatively harsh, and it is difficult to obtain all kinds of permits required for starting construction. Environmental and social impact assessment, land, water, radioactivity and other problems make the project progress extremely slow. Taking into account the factors such as high investment in overseas rare earth resource development and difficulty in environmental and social impact assessment, We expect that the investment or probability of overseas rare earth development planning capacity is lower than expected.
At the beginning of the global distribution of rare earth resources, Chinese enterprises consolidated their leading position in rare earth resources. Rare earth is a non renewable resource and a key element of a variety of functional materials in the high-tech field. Many economies around the world have successively issued policies to include rare earth into national strategic resource reserves. In recent years, Chinese enterprises represented by Shenghe Resources Holding Co.Ltd(600392) have begun to distribute overseas rare earth resources. Rare earth resources projects in Europe, Africa and Southeast Asia have received relatively low attention, which may become a breakthrough point in the resource distribution of Chinese enterprises in the future. With the continuous promotion of the supply side structural reform of China’s rare earth industry and the rapid development of downstream rare earth permanent magnet and other applications, the strategic value of the whole rare earth industry chain is expected to continue to improve.
Downstream demand such as new energy has boosted, and the rare earth industry chain has entered a golden age of high-quality development. Driven by the global environmental protection policy and China’s “double carbon” policy, new energy vehicles, industrial motors, wind power generation, variable frequency air conditioning, consumer electronics, rail transit and Industry Siasun Robot&Automation Co.Ltd(300024) and other fields may continue to develop at a high speed. We expect that in 2030, China and overseas new energy vehicles will drive the demand increment of 68000 tons of high-performance NdFeB respectively. In 2030, the global demand for high-performance NdFeB may reach more than 360000 tons. The downstream demand of the rare earth industry is expected to maintain a long-term high-speed development trend, and the whole rare earth industry chain may enter a new cycle of high-quality development.
Risk factors: macroeconomic fluctuations; Downstream demand affected by the epidemic is less than expected; Overseas capacity expansion exceeded expectations; Rare earth price fluctuation; Rare earth mining and smelting classification indicators exceeded expectations.
Investment strategy: the overseas rare earth industry chain is incomplete, the development environment is complex, and the production capacity investment may be less than expected. Chinese enterprises began to layout overseas rare earth resources and constantly consolidate the leading position of rare earth in the world. Boosted by the downstream demand of new energy, the rare earth industry has entered a high-quality development cycle, and the profits of China’s rare earth industry chain may continue to be released to maintain the rating of “stronger than the big market” of the industry. It is suggested to focus on the upstream rare earth resources: China Northern Rare Earth (Group) High-Tech Co.Ltd(600111) , Shenghe Resources Holding Co.Ltd(600392) , Xiamen Tungsten Co.Ltd(600549) , Rising Nonferrous Metals Share Co.Ltd(600259) ; It is suggested to pay continuous attention to the rare earth permanent magnet sector: Beijing Zhong Ke San Huan High-Tech Co.Ltd(000970) , Ningbo Yunsheng Co.Ltd(600366) , Jl Mag Rare-Earth Co.Ltd(300748) , Yantai Zhenghai Magnetic Material Co.Ltd(300224) , Earth-Panda Advanced Magnetic Material Co.Ltd(688077) , Innuovo Technology Co.Ltd(000795) , Chengdu Galaxy Magnets Co.Ltd(300127) ; It is suggested to pay attention to the rare earth recycling sector: Jiangsu Huahong Technology Co.Ltd(002645) .
