Q: In light of the announcement by China that it will not sell its rare earth minerals to the US, what in your estimation will this do to Neo's revenues, ie. how much will they increase to and where could its share price escalate to as well?
Thank you
Thank you
5i Research Answer:
NEO is well-positioned as a global supplier of advanced industrial materials, and its strategic partnerships outside of China (Brazil, etc.) allow it to mitigate supply chain disruptions caused by China's restrictions. The restrictions from China could cause rare earth prices to rise, benefiting NEO, and non-Chinese suppliers such as NEO can benefit from increased demand from countries and companies looking to diversify away from China. The uncertainty coming out of China is certainly not welcome for rare earth mineral investors over the near-term, but we think the company can see some positive impacts over the long-term as a result of this decision.