China and rare earths

Discussion in 'Stocks & Derivatives' started by Peter, Dec 23, 2010.

  1. Peter

    Peter Well-Known Member

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    "For me, if I look at the bigger picture for rare earths, this is what's essential," Malan of Van Eck said. "There's an abundance of rare earths around the world. It's not so much the mining, it's the fact we don't have the manufacturing capacity and we don't have the skill sets or the equipment. That's my biggest concern."

    Malan believes that China has invested its resources in such a way that it is now properly positioned for the future in terms of manufacturing capacity, but more importantly, well placed from a knowledge standpoint.

    "To have the refined product really work, you obviously need very highly educated, highly skilled people specifically within an industry," Malan said. "There's something like 800 people with Ph.D.s specifically linked to rare earths. They don't just focus on the equipment, the processing and the manufacturing side of it but also the manpower and the knowledge base behind it."
    A half century ago China was not among the leading producers of REEs. Between 1950 and 1980, the U.S., India, South Africa and Brazil were considered to be the front-runners in production. During the 1980s, China began underselling competitors, leading to consumers purchasing cheap supply from the Chinese.

    This had a negative effect on REE mines in several countries, leading to most being shut down. Molycorp Minerals mine in California was once the largest REE producer in the world but was forced to close in 2002. The mine is set to reopen in 2011 and should begin contributing production by 2012.


    http://www.kitco.com/reports/KitcoNews20101222AL_outlook.html
     
  2. Naphthalene Man

    Naphthalene Man Active Member Silver Stacker

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    This may be beneficial fro rare earth producers outside of China...
    Green standards issued for rare earths
    http://www.chinadaily.com.cn/china/2011-03/01/content_12091991.htm

    BEIJING - Environmental standards governing the production of rare earths, specifically concerning pollutants, were issued on Monday to ensure the sector's sustainable development.

    The standards, which come into force on Oct 1, set strict emission limits possibly affecting at least 60 percent of companies in the industry and could lead to consolidation in the sector, industry sources said.

    ...
    An executive from Ganzhou Rare Earth Mineral Industry Co Ltd, who declined to be named, said at least 60 percent of producers would have difficulty meeting the standards, which means they will face increasing production costs trying to implement them.

    "This will increase the export price of rare earths," he said.

    ...
    Existing enterprises will be given a two-year grace period from the standards, but newcomers will have to abide by them immediately.

    ...
    A number of measures have already been introduced to protect rare earths. On Feb 16, the State Council said the government will impose stricter mining polices and set reasonable annual production and export quotas for the previously over-exploited sector.

    The country reduced export quotas by 11 percent for the first batch this year, after it slashed export quotas 30 to 40 percent in 2010, in a bid to protect sustainable development.
     
  3. PerthStack

    PerthStack New Member

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    This whole china hogging the rare earth elements market doesn't concern me. If we produced it, we would just send it to china anyway, to be turned into phones and computers.
     
  4. perthsilver

    perthsilver Member Silver Stacker

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  5. tthace

    tthace New Member

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    Rare earths prices will not last. There will be so much production in a few years time so if you want to invest in one should go for LYC as they are ahead of the rest. This is a bubble a lot of people are getting sucked into imo.

    Rarely mined earth.. is what it is supposed to mean lol.
     
  6. SilverSanchez

    SilverSanchez Active Member

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    tthace have you looked at the fundamentals, uses and applications of REE? There is no way supply will outstrip demand (unless china floods the market then buys it all up again, like they have done in the past with other things) in so you might be talking about 10 years and then all the other mines will come online... its a bull market not a bubble - people are shorting rare earths at the moment - THATS NUTS! People are in denial! :)

    Everyone do your own research! Im a holder of Lynas, Arafura and am looking to get into Greenland Minerals.

    Alkane (ALK) is a good REE play because they also have 1moz of Au and Zircon! which is in tight supply, and they have many of the HREE.
     
  7. Naphthalene Man

    Naphthalene Man Active Member Silver Stacker

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    Don't forget NTU although they are a long way off being a producer. But at least they have Uranium, rare earths AND Phosphate which will be in extreme demand in the near future.

    That said, i'm completely out of the market at the moment.
     
  8. tthace

    tthace New Member

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    josh... my point is that the prices now are definitely overextended... and will 100% go down. supply doesn't have to outstrip demand, it just needs to be increased. It will reach a realistic level once African ones are ramped up. Look at how many rare earths project have popped up.

    LYC will be the one to take advantage of these high prices while it is still up and will remain very profitable even if prices dropped in half. However a lot of juniors will get hurt real bad. China is also an unpredictable factor as one policy change could kill the price.

    LYC could go to 10-12$
     
  9. BisonTHEdestroyer

    BisonTHEdestroyer New Member

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