Friday, September 7, 2012

China’s Competition: Great Western Minerals

China is expected to export 30,184 tons of rare earth elements in 2012, an increase of 2.7% from last year.

China accounts for about 90% of the global supply of rare earths.  Great Western Minerals (TSX: V.GWG, Stock Forum) wants to be the first fully-integrated producers of rare earths outside of China. China’s export quotas have led many end users to stockpile supplies last year, which has caused prices to drop. Jim Engdahl, the Great Western President and CEO said, “The end users got very afraid of not having products, so they ended up stockpiling a significant amount, these stockpiles are being used. This is the reason why the rare earth prices have softened so dramatically from their highs a year ago”. Great Western is setting itself up to supply end users who are seeking an alternative source outside of China. Great Western wants to bring back its mine in Cape Province, South Africa, “Steenkampskral” into a fully-integrated producer. Once the mine is in production it will be mining lanthanum, cerium, praseodymium, neodymium, samarium, dysprosium, and yttrium, the rare earths that create magnets. On Friday, Great Western’s stocks were up 3.5% and were trading at $0.295 a share. Great Western has a market cap of $122.9 million, based on 416.7 million shares outstanding. Source: Rare earth's junior seeks fully integrated status. (Reliability: High)

Comment: The rare earths producers outside of China include Lynas Corp., Molycorp and Great Western Minerals.

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