Brazilian Rare Earths Shares Slide as Revised Study Cuts NPV Outlook
Published on 08/19/2026 at 17:52 | Redaktion boerse-global.de
Investors punished Brazilian Rare Earths on Thursday despite the company unveiling a scoping study that still points to blockbuster economics at its Bahia-state projects, with the shares giving up ground as the market digested a more conservative resource base than previously advertised.
The sell-off — which left the stock at €2.50 in German trading, down 9.4 percent — came after the company was forced by the Australian Securities Exchange to withdraw an earlier set of production forecasts. That prior study, published on August 13, had carried a net present value of US$7.9 billion, a figure the miner conceded leaned too heavily on "inferred resources" in the later years of the mine plan, a classification that mining guidelines deem too speculative for long-dated financial projections.
A Reset Backed by Firmer Data
The revised scoping study, prepared by ERM Australia, now centres on an integrated development case combining the Monte Alto and Camaçari deposits, while the Sulista prospect has been set aside from the economic modelling for now. Roughly 75 percent of the new scenario rests on the higher-confidence "indicated resources" category, a shift that analysts say lends greater credibility to the numbers even as it trims the headline valuation.
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On that firmer footing, the after-tax net present value at an 8 percent discount rate still comes in at around US$6.0 billion. The internal rate of return is calculated at 90 percent, with the initial capital outlay — estimated at US$969 million — projected to be recouped in just 1.1 years. Management is guiding to an average annual revenue of US$1.69 billion over the first nine years of mine life, alongside roughly US$1.2 billion in yearly operating free cash flow.
The project's cost profile is equally striking. Cash operating costs are pegged at about US$21 per kilogram of neodymium-praseodymium equivalent, which would place the operation in the lowest quartile of the global cost curve and underpin an operating margin near 72 percent.
Rare Earths, Uranium, and a Decade-Long Offtake
The Monte Alto deposit forms the backbone of the plan, carrying a mineral resource of 3.4 million tonnes at a grade of 11.3 percent total rare earth oxides, of which 2.51 million tonnes are classified as indicated at a richer 12.7 percent grade. Over the first five years of production, the company expects to turn out 6,351 tonnes of NdPr oxide annually, plus 2,502 tonnes per year of a heavy rare earth concentrate rich in dysprosium, terbium, and yttrium.
Uranium also features in the orebody — an estimated 466 tonnes of U3O8 per year — though management has deliberately left the by-product out of the current economic calculations as a matter of commercial prudence.
On the offtake side, Brazilian Rare Earths has locked in a ten-year agreement with partner Carester covering up to 150 tonnes of dysprosium-terbium annually. The company also counts Hancock Prospecting — the vehicle of Australian mining magnate Gina Rinehart — among its backers, with a 4.89 percent stake.
A Long Runway to First Production
First commercial output is not expected until 2031, and that extended timeline, combined with the need to raise substantial capital for infrastructure build-out, is what analysts point to as the main drag on sentiment. The stock now sits roughly 42 percent below its 52-week high of €4.28.
The revised figures arrive as Western governments and manufacturers intensify efforts to break China's grip on the rare earth supply chain. Beijing currently controls around 70 percent of global production and more than 90 percent of refining capacity for the critical minerals used in electric vehicles, wind turbines, and defence applications. Brazil, with an estimated 11 million tonnes of reserves, holds the world's second-largest deposits and has been drawing increasing foreign investment into exploration.
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For Brazilian Rare Earths, the question is whether the market's patience will stretch to the end of the decade — and whether the improved quality of the resource base will eventually win over the sceptics who sold off the stock on Thursday.
