Another major development furthers China’s grip on the rare earth market. The creation of a rare earth exchange in Inner Mongolia gives Chinese rare earth producers more leverage in price negotiations. Chinese officials also stated publicly their desire to consolidate rare earth mining firms.
After Molycorp posted a Q1 loss, missing analysts’ expectations, ripples were felt through the rare earth mining sector. Are the investors that rushed to this market willing to wait for these companies to produce on their deposits, generating revenue, or are they looking for a quick buck?
Rare earth elements are used in a wide array of weapons systems used by the US military, however, there is currently no domestic production of the metals. This is catching the eye of congress as the US military and national defense is at the whims of Chinese trade policy.
China has released the total mining output quota for 2011. The country has increased the level of the total by a modest 5 per cent over 2010. Along with the announcement officials stated that new permits for prospecting and mining will not be granted until June, 2012, which further exacerbates supply issues going forward.
The US Department of Energy is planning for the future availability of rare earth elements, focusing only on their growing role in clean energy technologies. As with other critical materials, governments are now starting to look forward, trying to predict how much of these materials are going to be needed, and whether there will be an adequate supply available.
Bloomberg reports that the state-run Xinhua News Agency, citing Premier Wen Jiabao, announced that China will streamline its rare earth industry over the next five years.
Medallion Resources Ltd (CVE:MDL) (OTCQX:MLLOF) announces that the company's shares commenced trading Tuesday on the U.S. Over-the-Counter (OTC) market's highest tier, OTCQX®, under the symbol MLLOF.
AFP reports that China has brought 11 rare earth mines under state control as Beijing consolidates the industry.
Companies are looking to develop electric motors with a reduced percentage of rare earth oxides, after a turbulent market sparked by Chinese trading policy destabilized the market and influenced prices. Investments in new rare earth mines will provide non-Chinese REE’s to fill in supply gaps.
Newsletter writer Ken Reser discusses China's stranglehold over critical and strategic metals and minerals including Rare Earths.
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