Rare Earth Co.'s to Gain as Major Malaysian Projected Sees Delays (REE) (MCP) (SHZ)
Tweet
Share
E-mailGet Alerts MCP Hot Sheet
Join SI Premium – FREE
Rare earth stocks should see some upside following reports that the largest rare earth refinery, being built in Malaysia, is facing delays and scrutiny.
The facility, priced at $230 million, is expected to be the largest in the world, and break China of its stronghold on rare earths.
However, according to the New York Times, the plant is being plagued by environmentally hazardous construction and design problems. Further, protesters are demonstrating against the plant, fearing that it will leak radioactive and toxic chemicals.
Rare earth minerals by themselves are not radioactive, but they are usually found mixed with thorium, which is radioactive.
The plant was promised to avoid any sort of contamination by its owner, Australia's Lynas Corp. Lynas wants to get the project done quickly, as recent export restrictions from China have caused prices to skyrocket. However, others are seeking to build plants in the U.S., Mongolia, Vietnam, and India, potentially flooding the market, and sending prices plummeting.
Lynas Corp. shares were halted on the Australian Stock Exchange yesterday, in anticipation of a news conference by Malaysia's ministry of international trade and industry outlining what sort of changes may need to the facility to meet requirements by the International Atomic Energy Agency.
Engineers on the project has detailed several problems, including "structural cracks, air pockets and leaks in many of the concrete shells for 70 containment tanks, some of which are larger than double-decker buses." All piping is reportedly made from standard steel, which engineers claim is not suited for its intended use.
Engineers also contend tha Lynas Corp. and its construction management contractor, UGL Ltd., have pressed Malaysian contractor Cradotex to commence installation of fiberglass liners without fully addressing moisture issues.
Overall, the engineers and Lynas have two different time frames on the project. And that could spell gains for rare earth producers in other countries looking to capitalize as China reduces exports.
Companies on the move this morning include: Molycorp (NYSE: MCP), Avalon Rare Metals, Inc. (NYSE: AVL), Rare Element Resources Ltd. (NYSE: REE), and China Shen Zhou Mining & Resources, Inc. (NYSE: SHZ).
The facility, priced at $230 million, is expected to be the largest in the world, and break China of its stronghold on rare earths.
However, according to the New York Times, the plant is being plagued by environmentally hazardous construction and design problems. Further, protesters are demonstrating against the plant, fearing that it will leak radioactive and toxic chemicals.
Rare earth minerals by themselves are not radioactive, but they are usually found mixed with thorium, which is radioactive.
The plant was promised to avoid any sort of contamination by its owner, Australia's Lynas Corp. Lynas wants to get the project done quickly, as recent export restrictions from China have caused prices to skyrocket. However, others are seeking to build plants in the U.S., Mongolia, Vietnam, and India, potentially flooding the market, and sending prices plummeting.
Lynas Corp. shares were halted on the Australian Stock Exchange yesterday, in anticipation of a news conference by Malaysia's ministry of international trade and industry outlining what sort of changes may need to the facility to meet requirements by the International Atomic Energy Agency.
Engineers on the project has detailed several problems, including "structural cracks, air pockets and leaks in many of the concrete shells for 70 containment tanks, some of which are larger than double-decker buses." All piping is reportedly made from standard steel, which engineers claim is not suited for its intended use.
Engineers also contend tha Lynas Corp. and its construction management contractor, UGL Ltd., have pressed Malaysian contractor Cradotex to commence installation of fiberglass liners without fully addressing moisture issues.
Overall, the engineers and Lynas have two different time frames on the project. And that could spell gains for rare earth producers in other countries looking to capitalize as China reduces exports.
Companies on the move this morning include: Molycorp (NYSE: MCP), Avalon Rare Metals, Inc. (NYSE: AVL), Rare Element Resources Ltd. (NYSE: REE), and China Shen Zhou Mining & Resources, Inc. (NYSE: SHZ).
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Hunterbrook bullish on Modine Manufacturing (MOD)
- Two Binance Employees Detained In The U.A.E. Amid Police Inquiries - NYT
- Anthropic plans to change enterprise data retention policy - Reuters
Create E-mail Alert Related Categories
Trader TalkSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
