Mount Weld Rare Earths Composition Price Reaches New High
Lynas Corporation Limited (ASX: LYC) is pleased to announce a new price high of US$16.56/Kg was reached on 7 June 2010 for the average Mount Weld Rare Earths composition on a FOB China basis.
China has recently announced that only a few select State Owned Enterprises will be allowed to mine Chinese Rare Earths resources, “The mineral is very much undervalued because of over-exploitation and improper management. So the latest proposal is critical and will benefit the whole industry”, according to the Chinese Society of Rare Earths which noted that prices are only up 20% since 1979 despite demand that has tripled in the past decade.
In March the Ministry of Land and Resources capped this year's production at 89,200 tons, up 8.36% year-on-year, but it has also stopped issuing new licences until 30 June 2011. There have been recent news reports that the Chinese Government is tightening the controls within China to enforce the production quota system and decreasing mining which was occurring in breach of this production quota system.
The increase in prices has been anticipated as demand continues to recover strongly in 2010. The Japanese Ministry of Finance recorded Japanese Rare Earths imports increased by 230% in April 2010 from a year earlier, the second month in a row Japanese imports have increased significantly year-on-year.
The price high for the average Mount Weld composition prior to the global slow down in 2008/2009 was US$15.41/kg in the first week of July 2008. The new price high reinforces the value of the Mount Weld Rare Earths resource and the two plants currently under construction; the Concentration Plant in Western Australia and the Advanced Materials Plant in Malaysia. Lynas is on schedule to start production as planned early in the third quarter of 2011, offering the first significant source of new supply of Rare Earths outside of China.
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