China has further tightened the rare earth noose as it has invoked a seldom-used mining law to take direct control of 11 rare earth mining districts in southern China.
The ministry said in a statement, posted on its Web site Wednesday and briefly mentioned Thursday by the state media, that rare earth mining in those districts, all at the southern end of Jiangxi Province, had been placed under its national planning authority.
Interestingly, this is an area that produces HREE, which are more valuable and necessary to make magnets requires in hybrid vehicles and wind turbines. China has been in the news with their export reductions over the last few months and this move, essentially, helps them enforce their export quotas. Some feel that a large percentage of HREE production is illegal and can therefore take place under China's radar.
I still believe there is a strong case to be made for investment in rare earth operations such as Great Western (GWMGF), Lynas (LYSCF), Molycorp (MCP), Avalon (AVL) and Ucore (UCU) among others. While these have run up, I still believe there is significant upside left as everyone seems to be focused on electric vehicles (I personally believe natgas is as viable, but we want to invest, not pontificate) and green power such as wind (which I do not believe to be a viable source without significant subsidies).
This is my effort to help fit the pieces together to get a better picture of the capital markets.
“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”
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