The number that moved

In April 2025, China placed seven specific rare earth elements under an export licence regime: dysprosium, terbium, yttrium, scandium, samarium, gadolinium and lutetium. Within the first quarter of the new controls, the spot price of dysprosium oxide outside China roughly doubled. Argus Media reported the FOB China export price at 317 U.S. dollars per kilogram against a domestic Chinese price of 189 dollars per kilogram - a 67 per cent export premium reflecting the constrained availability.

Terbium followed a similar trajectory. The element behind military magnets and high-temperature electric vehicle motors hit record spot prices in 2026.

These two specific elements are why the rare earth grade headline in most mining announcements is, in market terms, misleading.

Light rare earths versus heavy rare earths

The rare earth category contains 17 elements. They split into two groups.

Light rare earths - lanthanum, cerium, praseodymium, neodymium, and a handful of others - are geologically abundant. Some have real industrial value. Neodymium is in every permanent magnet. Praseodymium is used in alloys. Lanthanum sits inside catalysts and optical glass. Cerium is widely used as a polishing compound.

Heavy rare earths - dysprosium, terbium, yttrium, scandium, samarium, gadolinium, lutetium and others - are geologically scarce. They are the elements that command the highest prices and carry the strategic weight. They are the elements China just restricted.

In market terms, dysprosium has consistently traded at multiples of silver per gram since 2020. Terbium has traded at higher multiples still. Lanthanum, by comparison, trades at commodity levels.

What "rare earth grade" actually means

Most rare earth project announcements report a single grade figure: total rare earth oxide, or TREO. The number captures everything in the basket - light rare earths and heavy rare earths combined.

A high TREO grade dominated by lanthanum and cerium can sound impressive. In market terms, it is fluff. The investor who reads the grade headline without checking the basket composition is reading the wrong number.

The signal is the basket mix.

A first principles way to read a rare earth disclosure

Three numbers matter, in this order:

  • Total resource size - how many tonnes are in the ground
  • HREE/TREO ratio - what percentage of the basket is heavy rare earth
  • Recovery rate by element - what percentage of each element actually makes it out of the ore through processing

The third number is where projects historically disappoint. Headline grades that look promising at the exploration stage often degrade through pre-feasibility as recovery rates come in lower than assumed.

North Stanmore against this framework

Victory Metals (ASX:VTM) operates North Stanmore, a heavy rare earth project six kilometres north of Cue in Western Australia's Midwest. The disclosed numbers, reported under the JORC Code 2012, read as follows:

Total resource: 320 million tonnes, of which 176 million tonnes Indicated and 144 million tonnes Inferred. A high-grade zone of more than 50 million tonnes sits within the broader resource.

HREE/TREO ratio: 38 per cent. Against an ex-China sector average closer to 10 per cent, the North Stanmore basket is roughly four times more heavily weighted toward the strategically scarce elements.

Disclosed metallurgical recovery rates: 70 per cent on dysprosium, 75 per cent on terbium, 70 per cent on yttrium. The flotation testwork has returned an upgrade factor of 48 times to 5.9 per cent TREO concentrate.

For investors reading the three numbers above against typical ASX rare earth project disclosures, the picture is unusual. Most projects compete on tonnage. The basket weighting and recovery rates are where North Stanmore sits apart.

Why this matters for the broader Western supply chain

In 2026, the first commercial shipments of non-Chinese separated dysprosium and terbium reached Western buyers under contracted supply agreements. The combined volume was modest. Industry analysts estimate fewer than 12 per cent of the world's dysprosium supply still comes from outside China. The infrastructure to expand that share - mining, separation, refining and magnet production - is being built, but it does not yet exist at scale.

The U.S. has not produced dysprosium domestically since 1998, when the last U.S. operational heavy rare earth mine closed. Defence and electric vehicle supply chains have routed through allied processing or Chinese refineries for the entire intervening period.

The basket composition at North Stanmore, combined with the absence of an acid cracking stage in processing (a feature unique to secondary regolith clay deposits), positions the project as one of a small number of credible non-Chinese heavy rare earth sources at scale.

External validation

Three external markers matter for any ASX rare earth project trying to be taken seriously:

  • Sumitomo Corporation has signed an offtake agreement covering future production from North Stanmore.
  • U.S. System for Award Management approval clears Victory Metals for U.S. Department of Defense and Export-Import Bank funding pathways.
  • A pre-feasibility study is scheduled for 2026, with a pilot plant scheduled for 2027.

None of those markers are commitments to a return. They are commitments to future production volumes and to processes that translate disclosed resource into actual operational supply.

Sources: ASX:VTM announcements (refer to LR 3.1 for material information); Argus Media 2026 rare earth market outlook; Strategic Metals Invest dysprosium and terbium price data; Adamas Intelligence 2024 rare earth basket analysis; USGS Mineral Commodity Summary; China Ministry of Commerce April 2025 export control order.

Information is general in nature only and does not constitute financial advice. Past performance is not indicative of future performance. Mineral resource estimates are reported in accordance with the JORC Code 2012. Refer to ASX:VTM resource announcement of 12 March 2025 for the Competent Person Statement and full technical disclosure. Speak with a qualified financial, legal and tax adviser before making any investment decision.