According to Jack, the lower price will mean that Chinese manufacturers of consumer products using any of the rare earth metals will be able to continue producing them for the domestic market without a cost penalty.
Any rare earth metals exported from China or produced outside of China will be sold for much higher prices in the non-Chinese market.

Such a dual pricing would mean huge profits for the Chinese producers of rare earth metals. At this point, profit is very low now because the current prices for ‘rare earth concentrates’ at the mine are too low for there to be any reasonable return on investment, by western standards.

Only those miners such as Canada’s Great Western Minerals Group [GWG.V] and Avalon Rare Metals [AVARF.PK] who have high concentrations of the heavy rare earths and/or are vertically integrated, stand to be the mining beneficial.

So, the way things are moving in the rare earths sphere, followers can expect some fireworks (Chinese or otherwise) in the months to come.

Copyright © 2009 Dig Media Inc.