December 7, 2011
Molycorp and Avalon Rare Metals Ramp Up Operations as China Moves to Cut Exports
NEW YORK, NY–(Marketwire -12/07/11)- With China dramatically cutting production, North American Rare Earth explorers are expected to ramp up operations in the coming years. In a recent report international metals and minerals research firm Roskill argues that China will cut down overall production output to just about 70 per cent by 2015. With rare earths in high demand, US Rep. Michael Coffman, R-Colo., urged governments around the world to consider building up strategic reserves for security purposes. The Paragon Report examines investing opportunities in the Rare Earth Industry and provides equity research on Molycorp, Inc. (NYSE: MCP - News) and Avalon Rare Metals, Inc. (AMEX: AVL.TO - News) (TSX: AVL.TO - News). Access to the full company reports can be found at:
The slowing economy has shown signs of muting rare earth demand this year, however. Exports from China — who presently controls more than 95 percent of the rare earth market — totalled 11,000 tonnes in the first nine months of the year, down a dramatic 65 percent year-on-year. Jia Yinsong, a director at the Chinese Ministry of Industry and Information Technology (MIIT), said the fall was down to a slide in demand rather than government restrictions.
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US-Based Molycorp, Inc. produces rare earth products, including oxides, metals, alloys and magnets for a variety of applications including clean energy technologies, technology, and defense applications. Shares of Molycorp skyrocketed last week after the company said that it signed a deal with Japan’s Daido Steel Co and Mitsubishi Corp to manufacture and sell high-powered rare earth magnets. Molycorp will own 30 percent of the joint venture, which will produce sintered neodymium-iron-boron magnets at a facility in Nakatsugawa, Japan.
Avalon Rare Metals Inc. engages in the exploration and development of rare metal deposits in Canada. Last month the company announced that it is continuing to make steady progress towards defining the metallurgical process flowsheets for the Nechalacho heavy rare earths ore. Avalon says that results “are positive but progress has been slower than originally anticipated.”
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