Australian rare earth stocks on the rise
SMH, 30th December
Glittering earthly treasures
The Age, 30th December
AUSTRALIA'S emerging rare earths producers and explorers are enjoying a year-end surge in value thanks to China's latest move to limit supplies from its dominant industry to the rest of the world.
China's announcement that it is cutting the export quota for rare earths by 35 per cent in the first half of next year renewed expectations that drastic price increases could be ahead for the subset of 16 metallic elements that have growing high-tech applications.
New mine developments in Australia are seen as critical to breaking China's grip on supplies. As a result, ASX-listed developers were chased by investors yesterday. Lynas Corp surged 10.8 per cent or 17.5¢ to $1.795 and Arafura climbed 13.5¢ to $1.355.
According to the US Geological Survey, rare earths are relatively common in the earth's crust.
But their concentrations are often too low to make extraction economically viable.
The world has nevertheless grown nervous about China's dominance of supply, particularly following Beijing's recent directive to suspend/delay shipments to Japan in an extension of their territorial dispute in the South China Sea.
Japan brought its fears to Canberra last month, prompting the Foreign Minister, Kevin Rudd, to say that Australia "understands the significance of rare earths globally".
It was shortly after the trade visit that a deal was unveiled under which $US250 million in Japanese government agency financing will be made available for an accelerated expansion of Lynas's Mount Weld rare earths project near Laverton, in Western Australia, and the project's associated processing facilities in Malaysia.
It was the Rudd government that blocked a proposal last year for China Non-Ferrous Metal Mining Company to acquire a 51.6 per cent interest in Lynas for what can now be seen as the knockdown price of $252 million.
At yesterday's closing price, Lynas was a $2.9 billion company.