12th Jun 2019 13:01
(Alliance News) - Galileo Resources PLC on Wednesday said it would be well-placed were China to restrict the export of rare earth minerals.
China has threatened to choke the supply of rare earths to the US, a vital component in many electronic devices. China supplies some 80% of the rare-earth metals used by the US, Galileo said, and over 70% of global output.
Galileo owns a 34% stake in the Glenover rare earth-phosphate project in South Africa's Limpopo province, and said the project would be "well-placed" to benefit from any upturn in the rare earth market. This means third-party developers could assess reactivating project, it added.
Chief Executive Colin Bird said: "In 2011, the West were much concerned with China's dominance of rare-earth market against an increasing western requirement for rare earths including in military use. This concern prompted several Western governments to take initiatives including the US having a special Senate committee and other steps to develop Western rare-earths production capability.
"This alternative source requirement did not dissipate but was overtaken by subsequent relative geopolitical calm thereby negatively impacting on the rare earths price. This calm has now evaporated and the spectre again of a rare earths deficit, particularly, the heavy rare earths, is again emerging," Bird continued.
"The Glenover project, which has a good proportion of heavy rare earths, has had an independent preliminary economic assessment produced, which showed robust figures and good material processing characteristics. Galileo now intends with its project partner FerMinOre, to reappraise the market with the anticipation of improved rare earths prices, to restore value that temporarily left the project."
Galileo shares were down 8.5% on Wednesday afternoon in London at 0.49 pence each.
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