China announced that it will reduce export quotas for rare earth's by 72% for the second half of 2010, indicating that Beijing wants to keep its production for domestic consumption. According to the Department of Commerce, shipments will be capped at 7,976 tons, down from 28,417 tons for the same period a year ago.
The only reason I bring this up is because it bodes well for one of my investments Stans Energy, which is bringing back a previously operated soviet era mine in Kyrgyzstan. If China were to completely restrict supply (which it is expected to do in the next few years) this would cause the price of rare earths to increase quite dramatically. This is because China accounts for 90% of rare earth production globally. The outlook for rare earths is looking up.
Black Swan Insights
The only reason I bring this up is because it bodes well for one of my investments Stans Energy, which is bringing back a previously operated soviet era mine in Kyrgyzstan. If China were to completely restrict supply (which it is expected to do in the next few years) this would cause the price of rare earths to increase quite dramatically. This is because China accounts for 90% of rare earth production globally. The outlook for rare earths is looking up.
Black Swan Insights
Chinese sometimes fake its data.... how much credit worth?
ReplyDeleteI agree that the Chinese government is not to be trusted, but I cannot see what purpose it would serve under this circumstance to lie. Furtheremore, the market for rare earths will make it clear enough if the Chinese are indeed cutting their export quotas through higher prices. Also this action by the Chinese is not unexpected.
ReplyDeleteGreat take on rare earth minerials
ReplyDelete