China Tightens Grip on Critical Rare Earth Supply Chain
China has implemented significant new export restrictions on seven key rare earth elements, creating a major opportunity for Viridis Mining and Minerals Ltd (ASX: VMM) and its Colossus Ionic Adsorption Clay (IAC) Rare Earth Elements (REE) project in Brazil. The restrictions target dysprosium, terbium, samarium, gadolinium, lutetium, yttrium, and scandium – critical materials for technologies ranging from electric vehicles to defence systems.
China currently dominates global production of these elements, controlling 85% of global dysprosium production and 89% of global terbium production, with 70% of this supply coming from ionic adsorption clay deposits similar to Viridis's Colossus project. The new export controls have immediately heightened the strategic importance of non-Chinese rare earth projects.
Viridis's Colossus project stands out as particularly significant given it boasts the highest grades of dysprosium and terbium within Measured and Indicated resource categories for any ionic adsorption clay project globally.
Colossus Project: A Rare Earth Powerhouse Outside China
The Colossus project's Scoping Study revealed exceptional economics and production potential that position it as a premier alternative supplier of critical rare earth elements:
- First 5 years: 146 tonnes per annum of dysprosium-terbium production
- Years 6-10: 156 tonnes per annum of dysprosium-terbium production
- Market impact: Projected to capture 6% of the global dysprosium-terbium market
The project also shows remarkable recovery rates to final mixed rare earth carbonate (MREC) product:
- 67% recovery for dysprosium
- 71% recovery for terbium
These recovery rates are achieved using a cost-effective and environmentally benign processing flowsheet that places Colossus at the lower end of the cost curve with annual operating costs of US$6.0/kg TREO.
What Are Ionic Adsorption Clay Rare Earth Deposits?
Ionic Adsorption Clay (IAC) deposits represent a specialised and highly valuable type of rare earth resource. Unlike hard-rock rare earth deposits that require intensive processing, IACs feature rare earth elements that are loosely attached (adsorbed) to clay particles, making extraction significantly more straightforward and environmentally friendly.
What makes these deposits particularly valuable to investors is their typically higher concentration of heavy rare earth elements (HREEs) like dysprosium and terbium – the very elements now under Chinese export controls. These elements command premium prices due to their critical applications in permanent magnets for electric vehicles, wind turbines, and defence technologies.
IAC deposits allow for:
- Lower-cost extraction compared to hard-rock mining
- Reduced environmental impact during processing
- Higher concentration of the most valuable rare earth elements
- Simpler metallurgical recovery processes
Currently, approximately 70% of China's rare earth production comes from these types of deposits, highlighting the strategic significance of Viridis developing a major IAC project outside Chinese control.
Beyond Dysprosium and Terbium: Comprehensive Rare Earth Production
While dysprosium and terbium represent the highest-value components, the Viridis Mining and Minerals rare earth elements project will produce substantial quantities of other rare earth elements now under Chinese export control:
| Rare Earth Element | Life of Mine Production (tonnes) |
|---|---|
| Yttrium (Y2O3) | 13,553 |
| Samarium (Sm2O3) | 6,285 |
| Gadolinium (Gd2O3) | 4,125 |
| Terbium (Tb4O7) | 454 |
| Dysprosium (Dy2O3) | 2,368 |
These elements are essential for various high-tech and strategic applications:
- Samarium: Used in high-performance magnets
- Gadolinium: Critical for MRI contrast agents and nuclear reactors
- Yttrium: Essential for LEDs, lasers, and advanced ceramics
Strategic Timing Amid Global Supply Chain Concerns
The Colossus project's advancement comes at a pivotal moment in global rare earth markets. With China's dominance of the supply chain now facing increased scrutiny and active restriction, Viridis offers a strategically located alternative supply from Brazil.
Rafael Moreno, Chief Executive Officer of Viridis, emphasised this timing advantage: "China's recent export restrictions on several key medium and heavy rare earth elements such as Dysprosium, Terbium, Samarium and Yttrium have delivered a clear signal to global markets: the world can no longer depend on a single supply source for materials that are critical to our technological advancement, defence capabilities, and clean energy transition."
The company reports significant interest from across the rare earth value chain, with potential offtake partners already engaging with Viridis following the release of its promising Scoping Study. This commercial interest is especially notable given that rare earth prices remain relatively subdued, highlighting the strategic value that partners see in securing non-Chinese supply sources.
Why Investors Should Follow Viridis Mining and Minerals
Viridis Mining and Minerals represents a compelling investment opportunity for several key reasons:
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Strategic Market Position: With China tightening export controls on critical rare earths, Viridis is positioned to become a leading alternative supplier of dysprosium and terbium – perhaps the most strategically important rare earth elements.
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Project Economics: The Colossus project demonstrates strong economics even at current subdued rare earth prices, with potential for significant upside if prices increase in response to export restrictions.
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Resource Quality: The project boasts the highest grades of dysprosium and terbium in the Measured and Indicated categories for any ionic clay project globally.
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Processing Advantages: High recovery rates (67-71% for key elements) and a cost-effective processing method place the project on the lower end of the global cost curve.
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Commercial Interest: The company reports significant interest from potential offtake partners throughout the rare earth value chain, validating the project's strategic importance.
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Diversified Portfolio: Beyond Colossus, Viridis maintains exploration assets across Brazil, Canada, and Australia prospective for gold, nickel, copper, platinum group elements, and kaolin-halloysite.
As global tensions around critical mineral supply chains intensify, Viridis offers exposure to one of the few advanced rare earth projects outside China that can deliver the most strategically important elements now subject to export controls. With ongoing project development and the possibility of securing strategic partnerships and offtake agreements, Viridis Mining and Minerals rare earth elements project represents an opportunity to invest in a critical segment of the emerging non-Chinese rare earth supply chain.
Want to Capitalise on China's Rare Earth Export Restrictions?
Discover how Viridis Mining and Minerals' Colossus project is positioned to become a leading alternative supplier of critical rare earth elements outside China. With world-class dysprosium and terbium grades in a market facing increasing supply constraints, Viridis offers investors exposure to one of the most strategically important mineral developments globally. For comprehensive details on the project's economics, resource quality and market positioning, view Viridis's latest investor presentation here.
