Australia's Office of the Chief Economist (OCE) expects Australian rare earth oxide output to climb over the rest of the 2024-25 financial year, but low prices could cut cobalt and manganese production over the same period.

Mineral firms produced 3.7mn t of manganese and 3,228t of neodymium-praseodymium (NdPr) oxide over the 2023-24 financial year ending 30 June. But manganese output is set to remain stagnant over the next year, while NdPr oxide production is expected to jump by 78pc to 5,750t, the OCE said in the March edition of its Resources and Energy Quarterly.

Persistent cobalt and nickel price weakness will likely hinder the development of cobalt production projects, the OCE said. The forecaster estimated that current cobalt and nickel prices are hovering at between 29-85pc of the price assumptions outlined in domestic project feasibility studies.

Cobalt Blue — the firm developing the Broken Hill cobalt project — has paused further work on its mine and processing hub, the company told Argus in late February. It was working on a definitive feasibility study with an assumed cobalt price of $27/kg, before work on the project first halted in 2024.

OCE indicated that recent cobalt price increases, stemming from the Democratic Republic of Congo's (DRC) decision to implement a four-month cobalt export ban, are unlikely to persist over the medium term. The forecaster expects continued copper output growth to eventually push cobalt prices down, as cobalt is a byproduct of the copper production process.

Argus' cobalt powder min 99.8pc ex-works China price leaped after the DRC implemented its export ban, rising from $22.60/kg on 27 February to $36/kg on 18 March.

By Avinash Govind