Rare Earth Stocks Higher as U.S., Europe to Press WTO on China Exports
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Shares of Molycorp (NYSE: MCP), Rare Earth Elements (AMEX: REE), Avalon Rare (NYSE: AVL), and China Shen Zhou (NYSE: SHZ) are all higher Tuesday following a bid by the U.S. and Europe for China to ease its grip on the rare earth mineral industry.
According to the WSJ, the U.S. and Europe will make a case in front of the World Trade Organization (WTO) regarding China's move to limit rare earth exports. Rare earth elements are key in the manufacture of high-tech goods like TVs, hybrid autos, and computers.
China currently produces 95 percent of the world's rare earth supply.
With China stemming exports, manufacturers outside of the region have found themselves paying a higher price and essentially limiting their profits and/or ability to compete.
Last week, Molycorp announced the CDN $1.3 billion acquisition of peer Neo Materals Technologies. Molycorp said the deal would help it ramp up production at a U.S. mine that used to be a top-producer of rare earths. However, Molycorp will still need to send some of the unearthed material to China for processing.
According to the WSJ, the U.S. and Europe will make a case in front of the World Trade Organization (WTO) regarding China's move to limit rare earth exports. Rare earth elements are key in the manufacture of high-tech goods like TVs, hybrid autos, and computers.
China currently produces 95 percent of the world's rare earth supply.
With China stemming exports, manufacturers outside of the region have found themselves paying a higher price and essentially limiting their profits and/or ability to compete.
Last week, Molycorp announced the CDN $1.3 billion acquisition of peer Neo Materals Technologies. Molycorp said the deal would help it ramp up production at a U.S. mine that used to be a top-producer of rare earths. However, Molycorp will still need to send some of the unearthed material to China for processing.
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