If China cut off rare earths tomorrow, would the West cope? John Parkinson, Chief Business Officer at Rare Earth Exchanges and the analyst behind the REEx Rankings, doesn’t think so. In this Q4 update, he joins Dustin Olsen and Daniel O’Connor to walk through the October 2026 rankings, including the first rankings for rare earth recyclers.
Disclosure: John Parkinson stated on this episode that he is a shareholder of Arafura Rare Earths. Nothing in this episode is investment advice.
How the REEx Rankings Work
The rankings score each company within its own segment: light and heavy rare earth miners, processors, magnet makers, and now recyclers. Each segment uses its own categories. For mines, that includes project stage and mineralogy; for recyclers, John uses a different set entirely. According to John, the rankings draw on about 3,000 data points, sit on a spreadsheet of roughly 6,000 cells, and are updated quarterly.
- Project stage moves scores: a company that secures financing and moves from development into construction sees a large change in its score.
- Not all progress shows up: work done before financing is locked in often doesn’t move a score, so John tracks those companies as “next things to watch.”
- New this quarter: Western and Chinese companies are now ranked separately instead of sharing one list.
Is the Ex-China Supply Chain Ready if China Switches Off?
Not yet, in John’s view. As of the October 2026 update, miners are advancing, some into construction, while heavy rare earths are still well behind and processing is the weak link. Getting a new separation facility through permitting, radionuclide handling, and flow-sheet development can take 10 to 15 years, and he doesn’t see enough government support going there. “If China was to switch off now,” he said, “the world would stop.”
Daniel added the policy backdrop he’s tracking: the extension of the U.S.–China export reprieve, tighter DFARS sourcing rules starting January 1, 2027, and REEx’s “transition vulnerability window,” the period in which the West would have no recourse if China cut off supply.
Why Didn’t the Market Reward Arafura’s FID?
John Parkinson, who holds Arafura shares, says he can’t fully explain it. Arafura moved into construction and up the rankings, yet as of the October 2026 recording John says its share price has fallen by about half since FID. He calls that a concern for governments: they can’t build the supply chain alone, and if private investors aren’t rewarded for funding de-risked projects, they won’t fund the next ones.
- Contingency: John estimates that roughly a third of the funding requirement on a project like this is contingency, with the actual capital cost about a third to half of the total.
- Contrast with Pensana: John says Pensana began construction without fully binding finance; when early money ran out, construction stopped and it fell in the rankings.
- Lynas and Meteoric: Lynas’s proposed acquisition of Meteoric Resources diversifies its feedstock into Brazil, yet John notes its share price also fell on the news.
Heavy Rare Earths the Rankings Don’t Cover
The rankings focus on terbium and dysprosium, but John points out that a range of other heavy rare earths are needed across supply chains and are mostly uneconomic to produce. According to John, China pools SEG concentrate from its operations and switches production over to these smaller-volume elements for a month or two each year. John notes discussions about governments buying and processing SEG themselves, and Daniel expects some form of government-backed heavy rare earth separation facility will be needed in the West.
Magnets: Movement, With a Feedstock Question
John calls Neo Performance Materials the standout: its plant in Estonia is now producing, which he says pushed Neo up the rankings. As ex-China magnet makers scale up, John says to watch who they sign rare earth supply contracts with, because secure feedstock is what makes an ex-China magnet ex-China.
The New REEx Recycling Rankings
Recyclers are hard to compare: one takes in e-bikes and has to strip out the magnet and separate the rare earths, another simply remelts finished magnets. John put them on one basis by converting each company’s feedstock and output back to rare earth oxide.
- Little disclosure: as of the October 2026 update, companies already recycling generally don’t disclose their volumes, and planned capacity is concentrated in about three companies.
- Mostly MOUs: very few feedstock agreements are binding contracts.
- A ceiling on supply: John estimates recycling supplies no more than about 5% of ex-China needs over the next five years, perhaps 10% within five to ten years if plans succeed.
- One to watch: privately held Rare Earth Salts recovers terbium from fluorescent lighting; John suggests government recycling money should target recovering heavy rare earths.
Milestones to Watch
- Arafura’s construction ramp-up and Pensana’s financing
- Heavy rare earth volumes reported by Lynas and Solvay
- Commissioning and qualification milestones at Energy Fuels and Ucore
- Whether Evolution Metals & Technologies secures funding
- Progress toward an ex-China pricing mechanism, which John says would materially change company valuations
- Government policy support for private projects
Key Takeaways
- Processing and separation are still the bottleneck in the ex-China rare earth supply chain.
- A project reaching FID and construction did not lift its share price, which John sees as a warning for private investment.
- Recycling is unlikely to supply more than about 5% of ex-China rare earth needs in the next five years, in John’s estimate.
- The October 2026 REEx Rankings add recyclers and separate Western companies from Chinese companies.
FAQs
What are the REEx Rankings?
The REEx Rankings are rare earth rankings that score companies segment by segment: light and heavy rare earth miners, processors, magnet makers, and, as of the October 2026 update, recyclers. Each company is scored against categories suited to its segment, such as project stage and mineralogy for mines. According to John Parkinson, the rankings draw on about 3,000 data points and are updated quarterly. The full rankings sit behind a REEx Insights subscription.
What changed in the October 2026 rankings update?
The October 2026 REEx Rankings update added recyclers as a new ranked segment and now ranks Western and Chinese companies separately instead of in one list.
Which part of the ex-China rare earth supply chain is furthest behind?
Processing and separation. John Parkinson calls it the supply chain’s Achilles heel: permitting, radionuclide handling, and building the flow sheets to get through to oxide can take 10 to 15 years for a new entrant, and he says government support has gone mostly to mining instead.
Why did Arafura’s share price fall after its final investment decision?
John Parkinson, who disclosed on the episode that he holds Arafura shares, says he can’t fully explain it. In his view the project is government-backed, has offtake secured, and carries large contingencies, so it shouldn’t need to return to the market to reach production. He sees the reaction as a warning sign for private investment in the sector.
How much rare earth supply can recycling provide?
In John Parkinson’s estimate, recycling is unlikely to supply more than about 5% of what the ex-China market needs over the next five years, and perhaps 10% within five to ten years if announced plans succeed. Feedstock security and quality are the limits: few recyclers disclose volumes, and most feedstock agreements are memoranda of understanding.
Transcript
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Dustin Olsen (00:11)
Everyone, welcome to the Rare Earth Exchanges Podcast. Today we have our Chief Business Officer at Rare Earth Exchanges, John Parkinson, joining us today to talk about our most recent industry rankings release that we came out with at the first of October. John, welcome to the show. How are you doing?
John Parkinson (00:31)
Yeah, doing great down here in Australia. So yeah, great to be on the podcast.
Dustin Olsen (00:36)
Yeah, it's been a while since we've had you on the show and probably even longer since we last got an update when we first launched the rankings on our website where we explained the reason behind it, our thought process. And so we're excited to share a pretty big update with the audience here on the show with what moved, what changed, why this should matter. So with that, let's dive into it.
Daniel O'Connor (01:09)
This latest update is pretty significant. There's thousands of data points that these algorithms we've developed are utilized to compute. Do you want to maybe just talk at a high level about the methodology that we use to rank upstream, both light and heavies, midstream, the separation refining, and downstream the magnet making?
John Parkinson (01:36)
Yeah, no, I'd love to have the chance to talk about that. Yeah, when we first started these rankings, they were just a tool that I was using for my own investments and then decided to take it to the next level. And we started off with, as you said, the light rare earths, the heavy rare earths, the processes, the magnets. And today I can announce that we have introduced the recyclers as well, which is a very, very interesting and very difficult, I must say, sector to invest in. But our rankings really shed a lot of light on what's going on there. So from a very high level, look, it's probably worth going back to our original podcast. And Dustin can put that in the notes, but that really goes through in a lot of detail how we do it. But from a high level, what we do is we take each company in that market segment and we rank them based on a bunch of different categories that we score them against. So where the project's at, so is it in construction or is it in development? Are they an explorer? We look at the mineralogy for mines and provide a score on that. And then we look at, for each of the different market segments, we look at different things. So when we come to recycling, it's a whole different set of categories that we use to analyze each company and rank them. And later on, I'll talk about in particular the categories that we use to rank the recyclers, because it's quite different to how we would rank a miner or a processor or a magnet manufacturer. So the other thing that I would just point out just before you jump in, is that there are lots of movers within the rankings and there's people that move up and down. But there's also a lot of work that is done by companies that doesn't show up in our rankings. And we talk about those as the next things to watch out for. So for instance, a company might have done a lot of work but not quite have had its finance locked in. They'll stay in the development phase. But once they actually get financed and move into construction, they move into the construction and that has a huge effect on the scoring in their rankings. But there's lots of good work going on and we can talk about that as we go through.
Daniel O'Connor (03:55)
Definitely. No, it's been an incredible journey and extremely important. As we look at the marketplace and the situation that the West faces, you have we're still ninety percent of our rare earth oxides are separated in China. Ninety-eight percent or so of heavy rare earth oxides are separated in China, probably ninety to ninety-five percent of the rare earth permanent magnets are produced in China still, and a lot of the metallization that happens in China. So, we're still highly dependent on China, yet there's a few things happening. There is this reprieve that we got in the trade war between the United States and China, where they locked down their exports, made it more difficult to get a flow of rare earth permanent magnets, for example, especially to defense related industry. Well, since the meeting with Xi Jinping and President Trump, that's been extended for a couple months till January tenth. That's it. So we're still in limbo. And then the DFARS rules get tighter starting January first, two thousand twenty seven, meaning companies that are still dependent on China must have a mitigation plan. And from what we hear out there among the chatter, no one's really ready. And yet they're still getting waivers without these mitigation plans. Now that's chatter, I can't validate that for sure, but I think it's an issue. Now, so we've developed also this concept called the transition vulnerability window. That is, what is the window of time where we're in deep trouble if China locks down all access, stops all access, and we have no recourse. Okay. So we look at that when we are looking at a company and or a supply chain and how advanced it is. Obviously, the earlier they are at in the stage, the more the vulnerability, the transition vulnerability window impacts, you know. That the potential, right? Because it's just going to take longer. So if we look at the market, and from both the rankings and from the vantage I just shared, there's a few companies that are clearly in the lead, right? Clearly Lynas Rare Earths, clearly MP Materials, although they're still issues, they don't have access to heavy rare earths at the level they need. It's not clear if they know how to separate them at scale. And producing magnets to qualify qualification at scale, I think is a work in progress. We know their 10x facility is not complete and commissioned until 2028. And then with as far as separation refining, you have Energy Fuels, they score higher on your rankings, John. But there's a lot of question marks about them. You know, are they We hear that they need a certain cheap price of monazite, for example, to be able to separate profitably. What about the heavy rare separation? They're working on a facility, but how long is that gonna take? So there's a lot of questions we have in the marketplace, given the Chinese situation, given the DFARS rules. Things are up in the air. What's your thoughts, John?
John Parkinson (07:39)
Yeah, I had a look back at our previous rankings and it's very clear that upstream, so your miners, that they are advancing and some of them are moving into construction now and that seems to be working quite well. The heavy rare earths are still lagging behind dramatically, but there is some progress, especially with the established Lynas they're starting to produce. But processing is really the Achilles heel. And I just don't think enough government investment and help assistance is there. I mean, to process through to oxide, to deal with all the radionuclide and all the permits that are required, that can take somewhere between 10 to 15 years. So for someone new to come in, that's where you're starting. And there are some established players out there, but they don't seem to be getting the support. That I think that they need. And then once that's solved, the magnet capacity should build from there. And we'll talk about recycling later. But yeah, at the moment, I think we have a very incomplete supply chain. And if China was to switch off now, the world would stop. That's my view.
Daniel O'Connor (08:46)
We would be in deep trouble. I we agree and we're being very candid about that when we write, when we talk about it on the podcast. John, let's talk about we'll talk about light rare earths and we'll talk about progress that some of these companies are making. Let's take Arafura. They've hit a major milestone. Go to FID and moving into construction. Does that not if from our standpoint algorithmically, doesn't that mitigate some risk? Should not investors be more upbeat, but are we not seeing a disconnect between some of these companies moving down the value chain and the markets not necessarily reacting accordingly?
John Parkinson (09:33)
Yeah, look, full disclosure, I'm a shareholder of Arafura as well, and I'll disclose any shareholdings that I have today as well. Arafura, yeah, they've moved into construction, and so they've jumped up in our rankings. It's a real worry for me, for the whole market globally, and governments should be looking at Arafura right now and trying to understand why their share price hasn't gone up. It's actually... Dropped by about half, I think, since FID was called. And this should be a real concern to governments because to solve the rare earth and magnet supply chain, the private sector needs to make investments into it. Government won't be able to do this by themselves. And if the private sector isn't making money, why they going to invest? People, there people out there saying that There's all sorts of manipulation going on. Honestly, it's really hard to tell. Our share markets don't actually allow, we work in asymmetry of information where a lot of the big end of town has more information than retail investors do. But it's more fundamental than that. This is a government-backed project by governments all around the world. It's got huge contingencies to get construction into commissioning into production. They shouldn't have to go back to the markets at all anymore to get this project into production. So where is the risk? They've got offtake secured. They've got optionality to go for phase two to get more online. It really baffles me and it's really interesting. They're gone. [crosstalk]
Daniel O'Connor (11:14)
No, no, sorry, you keep finish your thought.
John Parkinson (11:17)
Well, I just going to say that Arafura has been very conservative the entire way. I mean, it's taken [unclear in audio: "21 or two"] years to get into construction. They've been very, they wanted to secure all their financing before they move into construction. You contrast that with Pensana, who's fallen quite substantially now, our rankings. They went into construction without fully binding so they got given a little bit of money to begin construction and that money's run out and now the rest of the finances, they're waiting upon it. So construction stopped. And yeah, you just contrast that with how the share market works. It just doesn't seem to make sense to me. I think there's a real problem in our markets.
Daniel O'Connor (12:02)
I would agree. I did have a question about construction. It one of the answers possibly is there's a certain class of investor that comes in early stage to these rare earth and maybe other critical mineral assets. Okay. And when it's much more speculative, they're playing that market, they're letting it advance, press releases and then they take profits. In that early stage. Now we've moved into it's prime time. Is there really risk in construction? I've heard, well there's risk in construction. How much risk do you think is in construction? We don't have to get too detailed here, but it seems like there would be probably a little less that would be less risky than up into construction.
John Parkinson (12:55)
Well, precisely. I mean, if you look at the amount of the number of financiers and government agencies that have funded Arafura, can you imagine the due diligence that's been done by each one of those entities? So they've looked very, they've got all their engineers to go through and look at how they're going to build this. Is the flow sheet going to work? All those sorts of things. And a lot of the team has learnt from Lynas, there's lots of lessons; they had huge issues when they were in construction and trying to commission and get the project working. A lot of those lessons have been learned, but broadly, if you look at the size of the contingencies, and they're all called different sorts of things, but broadly, about a third of the funding requirement is contingency. That's huge. It's absolutely huge considering you've got working capital as well in there for the first couple of years. And then you've got all the financial repayments, all these sorts of things captured within there. The actual capital cost is about a third to half of the finance requirement. I'm using very general numbers here, but that should show you how much money is there set aside for if things go wrong. So yeah, look, it's a real, it's gonna be interesting when other projects get financed and see how the market reacts to those and how they go through to construction. Because if they all follow the same path, I don't think anyone would bother investing in rare earths. And I think it's something the government really needs to look at carefully right now.
Daniel O'Connor (14:28)
Yeah. Yeah. We obviously take it very seriously and we want to see the West accelerate the ex China rare earth supply chain. So it's not like a company goes into a mine goes into construction every day. So it's an event that you only see once in a while. You mentioned Pensana. Pensana did not have binding agreements. They seem to have played a game or a strategy of, you know. Looking for optionality or looking for multiple options. Their terrain, their geology may have some issues. They've done a good job we've found in terms of organizing local contractors and communities to work in that nation in Africa. But yeah Pensana has fallen a little bit in the rankings. What about in the heavies? What do you what did you see moving into this quarter as we as we make our way to the end of two thousand twenty six?
John Parkinson (15:33)
So yeah, look, there's been little movement in the rankings. There is a lot of work going on, but there's not much movement within our categories that we score. I guess the thing to point out is, is Lynas is now producing. So that's really interesting. And... Yeah, it's something that's lagged behind. We don't need that much. And when we get to the recycling, there's an interesting company I want to talk about there that can show how recycling might be able to help, particularly with the heavy rare earths. But yeah, it's going to be interesting to see when the Brazilian projects get moving. They seem to be able to supply quite a large amount of heavy rare earths. And there's other projects within Southeast Asia as well that could be quite good for heavy rare earths.
Daniel O'Connor (16:22)
Could be, yeah. If we look at Lynas as well, they've made a play almost a billion Australian dollars to acquire Meteoric Resources. That's a group — Dustin and I interviewed their CFO. That's a pretty significant move, wouldn't you say? That's if we think about Serra Verde, that's USA Rare Earth. Round Top doesn't is not prime time. Everybody knows it. So they went and spent two point eight billion on Serra Verde, which is in production and supposed to get four thousand tons that by the end of this year. We'll see. Lynas acquires Meteoric or is announced to re acquire. Of course, it has to go through the process. Any thoughts on that? Is this are we seeing a trend with the bigger companies moving into Brazil? Is MP Materials gonna buy a Brazilian company?
John Parkinson (17:13)
Yeah, well, it's interesting, isn't it? The thing that surprised me when Lynas announced it was the share price went down 10%. There's a little bit of arbitrage maybe happening there, but it's still, to me, it's a great play. It diversifies the feedstock. The Brazilian government was talking about potentially investing in in processing over there as well. So that could diversify their processing. It's a great play. I think that was very, very good for the market and should also help the heavy rare earths quite substantially as well. So yeah, again, I was shocked by how the market operates at the moment. I believe, if you go back before COVID, 2019 and before, good news used to push share markets up. And bad news pushed them down. And now you just don't know what's going to happen. It's just crazy.
Daniel O'Connor (18:06)
Well, yeah, I think we're learning as we go how much arbitrage, how much short or speculation is happening, but we need serious money to your point, John, in these markets. You know, with heavies, I just want to say I see a real problem. We don't see movement. Our rankings I believe are state of the art in the world. For tracking these endeavors. And we don't see that much advancement. And so we got a real problem. Again, back to that transition vulnerability window, DFARS and Chinese export licensing regime problems. The West has a real problem, does it not, John?
John Parkinson (18:53)
It really does. One of the big things, like our rankings just look at Tb and Dy, but there are a whole bunch of other heavy rare earths and other rare earths in general that we don't rank, but they are required across our supply chains. And they're very, very difficult to process and extract. And they're basically uneconomic. And most of them come from China. And the way China does it is they grab all the SEG from all the other mines and all their other operations. And once a year they'll stop production and switch to these alternative rare earths, the smaller quantity ones, and focus on that for a month or two. And I don't see how the West is actually going to do this because it has to be economic for one of these miners or processors. To do and there's been discussions, I know within our office and people talking to us about potentially government having to step in and perhaps buying all this SEG and processing it themselves to create these different elements that are required because it's not economic otherwise for the market to do.
Daniel O'Connor (20:06)
It's you're a hundred percent correct. There will need to be, we're pretty convinced, some government subsidized, specialized, heavy rare earth separation facility that can do this ongoing to help, multiple industries. So it I think it's it we don't have to go deeper than that, but it's a it's a very important point. If we look at separation if we look at processing what we call processing that's really separation and then metallization. The West is in trouble there too, John. Our rankings we don't see a lot of movement. Again, the heavy rare earth dependency is a big part of that. You got MP Materials, they've received 150 million to build out a heavy rare earth separation facility. Not a lot of public updates on that. Lynas has started to separate, but their costs are going up higher than they anticipated along those lines. USA Rare Earth, they don't have much. They've invested in Carester. We have a problem with that. You know, looking at that asset, there's a lot of risk with that asset right now. Energy Fuels, their pedigree is processing uranium. We've heard that there's some assumptions about, certain cost price points for monazite that they will need to have. And it's not clear if they can do heavies at scale. We're talking processing here. Any thoughts on processing as we move into the last quarter and into the end of the year?
John Parkinson (21:48)
I mean, the only significant movement was Arafura moving into construction. And again, they're the only scale processor that's going to take their product through to oxide. Excuse me. So yeah, it's very disappointing to see the lack of progress in the processing and separation side of the supply chain. And again, I think it's always going to be a slow mover because the time it takes, like I said before, to get permits and to develop those extensive flow sheets to do that last part of the separation process. But it's somewhere where government needs to be investing. They seem to only be investing upstream. And the processing side is what's really required. And if there was surplus processing capacity, a lot of these smaller miners would become, upstream would become economically viable and they would be able to sell their product in. But at the moment, that's just not the case. So yeah, it's a real, I think we've been saying this since we started REEx, that processing is the choke point.
Daniel O'Connor (22:59)
It is the choke point. There are some promising signs out there. For example, we like Phoenix Tailings. They're privately held, so they don't necessarily show up on the public rankings for equities, but I think Phoenix Tailings, both separation and metallization, they have promise. You know, Carester obviously privately held. Saskatchewan Research Council, they're a government provincial. Canadian company. That there's a few others out there, [company name unclear in audio], and Rare Earth Salts, and there's a few others that a company in Europe called REEtec. Of course, there's Neo, we talked about Neo, Neo Performance Materials, they're one of the more mature companies that we think is at the top of the pyramid, along with MP and Lynas, just because they're doing it. Now they still have association to China. So that's an issue. If they want to work with any defense related contracts in the United States and possibly Europe. So I but we agree the processing's the choke point. If any government influencers are going to be watching this our message is we're gonna need more targeted directed industrial policy focusing on processing. Let's look at magnets. The end the output of all of this are rare earth magnets. There's other things rare earth elements do. I don't want to discount other output, but magnets are key. About 8 to 10,000 tons come directly into the United States, about 40,000 embedded in other products. Mostly all of it comes from China to this day. So We rank these companies as well, both Chinese and ex China. A lot of them are not publicly traded, so there's less choice for investment public retail investors. But what movement did we see in the on the magnet front downstream?
John Parkinson (25:02)
So, yeah, we're starting to see some movement in the magnet sector. Neo is the standout. They're now producing. So their plant in Estonia is starting to produce. So that's really pushed them up in the rankings. I think, so within the categories that we evaluate, there is movement and there is progress. But the thing that we're seeing is that as these magnet producers start to produce and start to scale, it comes back to the question of rare earths and where are they going to source them from and what's the security of that supply if they want to produce ex-China magnets. And that's really the key. So yeah, I think I'm just conscious of time. Think we might, so magnets, there is movement, but watch out for their supply of rare earths and who's signing those. Those contracts, that's the key there. But I really interested to get into recycling, so should we jump into that?
Daniel O'Connor (25:57)
Let's let's yeah, let's get into recycling. This is pioneering. I don't think any group has done this before. Introduce our recycling rankings, John.
John Parkinson (26:07)
Yeah, so lots of people on our forum and I get lots of private messages about recycling and technologies within recycling and businesses within recycling. So it's been something I've been working on in the background amongst all the other projects that we're working on. And we're ready to release it to the market now. So recycling high level I've found is a very opaque business and they're very diverse businesses within the segment as well. And what I found is that because of that, how diverse they are, it makes it very difficult to compare them. But that was just all about crunching the data and finding ways to compare them. And the reason they're diverse is because they take in different products and can produce different products at the end as well. So someone might have feedstock that is e-bikes and another person might have feedstock that's just a magnet and all they need to do is tidy up that magnet, melt it down, put it in another form and that's it. And that's classified as recycling. Whereas someone who had the e-bike has to pull that apart get the magnet, they wanna actually separate out the rare earths and they wanna sell those. So there's very different businesses within there. And so trying to find a way to evaluate those and compare them, make them apples for apples, I've used what we've done with all the other rankings, which is oxide. So what are the rare earth oxides contained within the feedstock? And what is the rare earth oxides that's then produced out. Now they'll be sold in different forms. It might be a finished magnet. It might be just the rare earth oxides. It might be an alloy, but I have converted them all back to rare earth oxides for comparison. And yeah, it was very interesting that the companies that are actually producing and recycling products at the moment, they don't disclose the volumes that they're actually producing, which was very interesting. And even the people that have planned production, it's very concentrated within three companies. And some of those companies, you're not sure whether they would actually, there's a company in India they've got big, big plans and you're just not sure whether they would be able to meet those plans. From a high level, when I've then looked back at what could recycling do for the market, I'm just going to throw very broad numbers out here, but in terms of supply into the ex-China market of rare earths, I can't see within the next five years that recycling would be able to provide any more than about 5% of what's required. If all the plans go to plan, they might be to get to 10% within five to 10 years. And a lot of that comes down to feedstock, the security of feedstock, but it's also the quality of the feedstock. So if we're trying to extract... Some heavy rare earths, for instance, you need to make sure that there's heavy rare earths in those magnets, you need to make sure they're high performance magnets. And a lot of the stuff that's being recycled doesn't have that. Again, it's very, very hard to... The calculations that were required to make these rankings work were quite complex, and that's what's taken me quite a bit of time to make sure that everything has been compared correctly. One of the other big features that I noticed is that most of the feedstock agreements are only memorandum of understandings, MOUs, or they're not even that far progressed, they're just plans. There's very few with binding contracts. So that was another very interesting feature of the rankings. And I'd like to call out one company in particular. It's a privately held company, but it's a very interesting little companies called Rare Earth Salts. They recycle fluorescent lighting and they're actually able to extract Tb from that. Now they're trying to scale up. They've got some government funding from America. But this is where I think perhaps government could, if they're going to focus money into recycling, I think they should be trying to recover the heavy rare earths and trying to help these recyclers capture that quality feedstock that contains those heavy rare earths. I think that's something that recycling could really contribute to.
Daniel O'Connor (30:52)
Well, I just wanna compliment you. I think that the recycling rankings are a breakthrough. They'll only get better as we learn more. There's big plays like MP Materials and Apple have announced this recycling effort, but what does that really mean? We don't know, right? Until it to your point, it's very it's not transparent, it's not clear. So our categories are a little bit more high level while we learn more and more and more and get more granularity over time. So but I think it's a it's a big breakthrough for rare earth exchanges. Want to thank you for doing that. I think time will tell but I tend to agree right now the estimate is anywhere from maybe five percent, maybe a little bit more now of all rare earth permanent magnets come from recycled material. Maybe it's a little bit more but it's probably not going to go north of ten percent for quite a while. And just a note, we've reported on China quite a bit. And the some unit within Northern China rare earth, if any group is gonna be ahead of the curve on recycling, it's gonna be that group. And they're just doing pilots. Even China's not doing recycling at scale yet. So that tells you something. I think yeah
John Parkinson (32:14)
And I'd just like to say when we did our first rankings, we had lots of feedback from the market and that's really helped to improve the data and improve the way that we categorize and rank these projects. Again, this is a first, it's a very rigorous piece of work that we've done, but any feedback would be very welcomed and we're very open to it. So if you could send that through, that would be great.
Daniel O'Connor (32:41)
No, I think it's brilliant work. I think we want to John move to next milestones and then Dustin can wrap up. Let's talk about some key milestones and signals out there we wanna monitor over the next couple of months.
John Parkinson (32:54)
Yeah, sure. Look, very interested in the light, rare earth space to see how Arafura moves into construction and mobilization. You know, I know they've got, there's a huge amount of people being hired in to start the delivery of that. So there is this ramp up period and watching that is going to be very interesting. So that's key to watch. Pensana. We need to see what's happening there. Are they going to get the money? So keep watching that. Lynas and Solvay, let's see how they're reporting and the heavy rare earth quantities. That's going to be very, very interesting. In the processing, it's really about seeing how they're progressing. With the installation and commissioning and qualification milestones, particularly for Energy Fuels and Ucore. Let's see, Evolution Metals & Technologies. I know they're awaiting on funding and I know if they get that funding, that's gonna be a very interesting company that could start to produce magnets very quickly. So I'm very interested to see what happens there. And again, the general marketplace, ex-China pricing, we keep hearing about offtake agreements moving away from the Chinese industries across to ex-China indices. You see it in contracts, but there's still a lot of doubt in the market about this. And so the China pricing still is affecting the way that projects are valued. So getting an ex-China pricing mechanism or marketplace set up, I think is really key to the whole industry. Any developments there will see material valuation changes in companies. And government, we need to keep watching out what government does with policy and how they're going to support the industry. So if these private companies are not starting to... Provide returns. Yeah, it's going to stall the entire sector. So keep an eye on that.
Daniel O'Connor (35:04)
Agreed. Really important points, John. Dustin.
Dustin Olsen (35:11)
This has been a fascinating conversation and I think everyone who's been listening will appreciate hearing the mine, magnet and now recycling discussion of what's going on in the industry and some key players that are going on. So John, how often are rankings be able to be updated? There's three thousand data points that are considered, so how often can Our subscribers expect to see some updates.
John Parkinson (35:41)
So we're definitely going to be ranking these, sorry, updating them quarterly. I am working on some new methodologies to make that quicker. So hopefully soon we'll be able to update that a lot quicker. But like you said, there's 3000 data points that are used in the evaluation, but there's actually around 6000 different cells within the spreadsheet that sits behind this that needs to be accounted for. It's quite a lot of work, but it's very thorough and very accurate.
Dustin Olsen (36:12)
Which is awesome and worthy of a REEx Insights subscription to go and see the full set of rankings. And John, why would somebody need these rankings to navigate the industry?
John Parkinson (36:31)
The industry is very complex and we've distilled that very complex industry down to the very basics that you should be looking at in these companies. And that sounds pretty easy to do, but in practice it's very difficult because the way everyone reports is slightly different across jurisdictions, even within jurisdictions. Within different market segments, the way you look at a magnet is very different to the way that you look at a rare earth out of a mine or an ore. So our rankings cut through all of that and show you what at least the top 20 companies in each sector you should really focus on. And if you're then speculative, you then might look a little bit below that and it focuses your attention and therefore you can, your research in the right areas.
Dustin Olsen (37:22)
Perfect. It really is a great tool for not only investors but businesses looking for partners, governments looking for areas to quickly accelerate different initiatives. So come to rareearthexchanges.com, get an insight subscription, and be in the know for sure. And while you're there, we just also want to plug our marketplace if you want to find. Who's who in the room and connect with them, as well as bringing parties together, you can call our one-eight hundred number to get connected and meet some of these people. So and as our quick disclaimer, this is not investment advice at all. We are not indicating to anyone who they should invest in at all. So please consult the powers that be your financial advisor. If you are interested in any of these companies that we've discussed on the show today. John, thank you again for being on the show, sharing about the rankings. One last thing I did want to highlight with the rankings that we did with our recent update is that we separated the West from China. So now when we come to the come to the website you'll see rankings that are only the Western market. And we also have just the Chinese market. So big distinction there now. Not everything is lumped into one big list. So a lot has happened as we head into Q four. So Thanks again, guys.
Daniel O'Connor (38:59)
Definitely. Thanks, Doc.
Dustin Olsen (39:04)
And we'll get you on the show again soon, John, as things continue to move and get shaken up as they have over the last year. So this has been great.
John Parkinson (39:17)
Thank you.
