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Greenland Minerals’ shares rise as China escalates trade war using rare earths

The Kvanefjeld Project has a +1 billion tonne multi‐element resource, which is the largest rare earth oxide inventory under JORC code.
project area
Initial 37-year mine life, scope for significant extension

Greenland Minerals and Energy Ltd’s (ASX:GGG) shares have surged almost threefold since April, rising from 5 cents on April 5, 2019 to 14 cents today.

The company recently revealed improved recoveries and positive economics from the optimised feasibility study update on its Kvanefjeld Rare Earths Project in Greenland.

READ: Greenland Minerals’ optimised Kvanefjeld feasibility study confirms increased recoveries, reduced costs

Importantly, the increased recoveries will result in the production of 32,000 tonnes per annum (tpa) rare earth oxide (REO).

The results are significant and have positioned Kvanefjeld as the lowest-cost undeveloped ASX-listed rare earth project.

This has been achieved due to the unique nature of the Kvanefjeld ore minerals, which can be concentrated effectively through flotation, then refined with a single stage atmospheric leach circuit.

At the end of May, the Chinese state planning agency, known as the National Development and Reform Commission, stated that it was considering placing export controls on China’s rare earth production in response to US moves to restrict Chinese trade.

Because China controls between 70% and 80% of the global rare earths supply the statement caused a flurry of interest in non-Chinese rare earth companies, many of which rose by around 20% or more in equity markets in London, Australia and Canada.

Although rare earths themselves aren’t actually that rare, mining projects can take up to ten years to develop from early exploration into production, and the market doesn’t have that long to wait.

Especially since rare earths are essential to the US military-industrial complex, to consumer electronics and, increasingly, to electric vehicles.

In that context companies like Greenland Minerals that already have projects that are well-advanced through the development cycle suddenly start to look very attractive, especially when there aren’t too many of them.

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