July was an important month for the rare earth market. In perhaps the most significant news of the year, China released the rare earth export quota for the second half of 2011, sending the market into a frenzy yet again. Other top headlines included the continuing rise of rare earth prices, and the alleged Japanese discovery of rare earth deposits on the floor of the Pacific Ocean.
Rare earth prices have jumped again, up nine fold from a year ago. The news of the increase in price also come at the same time that a new tax is levied on heavy and light rare earths differently, setting the stage for a potential change to export policy.
The stunning 72 percent reduction of rare earth export quotas and other changes to trade policy in July, 2010 shined a spotlight on the rare earth market. Prices for the various elements skyrocketed, and share prices of junior miners exploded. China has stated that export quotas are being determined once again, and the world anxiously waits.
New details about the ‘drastic’ changes to Chinese rare earth policy have been released. Dealing with increased environmental protections, the end effect may be the consolidation of rare earth producers in China. Also, South Korea intends to build strategic stockpiles of rare earths, as well as increasing the countries investments in rare earth mines around the world.
Reassurances from Chinese officials and the resumption of shipments from the Asian nation have hurt the gains made by many rare earth juniors. Has the market jumped on the rare earth band wagon investing in companies that have yet to produce? Or have they just jumped the gun in a market poised to grow for years to come?
News of China’s cutbacks to rare earth quotas have prompted many rare earth mining companies to accelerate feasibility studies and preparations to break ground on new projects. Major firms dependent on rare earth oxides such, as aerospace giant Boeing, are now helping with the search.
The Kyrgyz Republic is going through a transformation after months of civil unrest. Gold, and rare earth element mining are key economic assets of the developing nation. Understanding the political realities and assessing risk are essential to investing in companies operating in the region.
It looks like the United States has finally decided to try and break China's grip on the supply of Rare Earth Elements after global concerns were raised of the Red country's monopoly.
News of the likelihood of finding rare earths supplies by Greenland Minerals and Energy which could possibly pose a large challenge to the Chinese supply has send the rare earths sector into a tizzy.
Europe has finally acknowledged that there is a serious problem in the rare earths sphere. But what can it do to tackle it? Analysts are divided in their opinion.
Monday, August 1, 2011