Molycorp (MCP) Jumps As U.S. Seeks To Cut Reliance On China Rare Earth Metals
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Shares of rare earth stock Molycorp, Inc. (NYSE: MCP) are surging 5 percent higher Thursday after a new bill was introduced by Colorado Congressman Mike Coffman which "seeks to curtail dangerous reliance on China for critical materials".
According to the press release, Coffman's bipartisan bill, H.R. 1388, the Rare Earths Supply-Chain Technology and Resources Transformation Act of 2011 (RESTART Act), would achieve this by reestablishing a domestic rare earth industry in the United States.
"Currently, the world is nearly 100 percent reliant on Chinese exports for these critical materials and China’s trade policies of restricting rare earth exports pose a serious threat to both the economic and national security of the United States," Coffman said.
Key provisions of the legislation include:
Link to Press Release
Besides Molycorp, other rare earth stocks are higher including: Rare Element Resources Ltd. (NYSE: REE) +8 percent, Avalon Rare Metals Inc. (NYSE: AVL) +5 percent.
According to the press release, Coffman's bipartisan bill, H.R. 1388, the Rare Earths Supply-Chain Technology and Resources Transformation Act of 2011 (RESTART Act), would achieve this by reestablishing a domestic rare earth industry in the United States.
"Currently, the world is nearly 100 percent reliant on Chinese exports for these critical materials and China’s trade policies of restricting rare earth exports pose a serious threat to both the economic and national security of the United States," Coffman said.
Key provisions of the legislation include:
- Directing appropriate federal agencies to expedite the permitting process in order to increase the exploration and development of domestic rare earth elements, without waiving environmental laws, and establishing a multi-agency Task Force to carry out this process;
- Setting up a Defense Logistics Agency (DLA) rare earth inventory -- where DLA enters into long-term supply contracts and then makes the supplies available for purchase to federal government contractors -- to generate a domestic market and facilitate the domestic sourcing of rare earth alloys and magnets;
- Making loans, backed by the federal government, available to start production should lending from the capital markets not be available;
- Requiring the various cabinet Secretaries to appoint Executive Agents for rare earths;
- Establishing a rare earth program at the U.S. Geological Survey.
Link to Press Release
Besides Molycorp, other rare earth stocks are higher including: Rare Element Resources Ltd. (NYSE: REE) +8 percent, Avalon Rare Metals Inc. (NYSE: AVL) +5 percent.
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