Molycorp and Lynas Shares Rally After China's White Paper Report Raises Concerns
NEW YORK, 07/05/12 - Rare Earth stocks have been gaining attention in recent weeks after China's Information Office of the State Council published the first white paper on their rare earth industry. The report raised concerns regarding China's rare-earth exports and future global supply sending shares of rare earth companies higher. The Paragon Report examines investing opportunities in the Rare Earths Industry and provides equity research on Molycorp, Inc. (NYSE: MCP) and Lynas Corp. Ltd. (PINKSHEETS: LYSCF).
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China is currently responsible for approximately 95 percent of the world's supply of rare earths. The white paper suggests that China presently holds only 23 percent of the world's rare earths, far less than the 36 percent analysts have previously suggested. In an attempt to prevent environmental pollution and preserve the country's rare earth supply for domestic use, China has placed restrictions on exports.
"All these measures, such as export quota controls, are meant to diminish environmental risks that have resulted from the disorderly development of the rare-earth industry," stated Zhu Hongren, chief engineer of the Ministry of Industry and Information Technology.
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Molycorp is one of the world's leading rare earths and rare metals companies, and combines a world-class rare earth resource at Mountain Pass, California, with world-leading ultra-high-purity rare earth and rare metal materials processing capabilities. Shares of the company have rebounded nearly 9 percent in the last month.
Lynas Corp. have recently stated that they have underestimated the influence of social media when they chose to build their processing plant in Malaysia. "I'd have dealt with the emerging community debate by the social media a little bit more intensely, a little bit earlier," Lynas CEO Nicholoas Curtis said in a recent phone interview. "We probably didn't recognize the power of the social media to create an issue."
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