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Rare earth fears become reality

July 15, 2010 - 00:00 GMT

KEYWORDS: rare earths , supply shortage , rare earth , REO , magnets , Molycorp , IMCOA , neodymium , cerium

China’s decision to cut annual rare earth exports by 40% will likely lead to supply shortages and surging prices for the rest of the world

There is no new rare earth capacity expected to come on stream to compensate for lost Chinese exports in the next year, with the two most advanced projects – being developed by Lynas Corp. in Australia and Molycorp Minerals in the USA – due to start up in Q3 2011 and mid-2012 respectively.Mark Smith, CEO of Molycorp, also believes shortages could now be a reality in the near term (IM 12 July 2010: Molycorp on rare earth quotas)."China is doing what it feels it must in order to maximise the value of their resources, improve product prices, improve their environmental practices and continue to create jobs in downstream manufacturing businesses in China, which have all been key policy goals of that nation,” Smith told IM. “These additional and very significant decreases in export quotas are clearly troubling, given that it appears that rest of world demand will now exceed what China is...

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