China’s hoarding of rare earth metals has been a growing problem for the US as the metal is widely used by the US military, and crucial for the manufacturing of popular consumer products. According to a Congressional Research Service (CRS) Report in April China currently produces 97 percent of the world’s rare earth oxides. The Paragon Report examines investing opportunities in the Rare Earths Industry and provides equity research on Molycorp, Inc. MCP -7.12 percent and Rare Element Resources Ltd REE -5.84 percent CA:RES -5.34 percent.
“There may be repercussions if these materials are not available for commercial and defense applications,” the CRS report said. “The rare earths supply chain vulnerability question may adversely affect the ability of the United States to plan strategically for its national security needs.”
A study by the Defense Department published in March finds that the stranglehold China has on rare earth production could be coming to an end with new production facilities in North America coming online. The Defense Department report concluded that by 2013 the US military, which is almost completely dependent on China for rare earth elements, will be able to meet a majority of their demand.
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Molycorp recently announced that its proven and probable reserves of rare earth minerals at its Mountain Pass, California facility have increased by 36 percent, according to a new independent estimate conducted by SRK Consulting. SRK now estimates that the proven and probable component of Molycorp’s ore body contains approximately 2.94 billion pounds (1.3 million metric tonnes) of contained rare earth oxide (REO) equivalent. This compares to the previous estimate of 2.24 billion pounds of contained REO product (1.02 million metric tonnes).
Rare Element Resources is engaged in the acquisition, exploration and development of mineral properties. The Company’s principal property is the Bear Lodge Property located in northeastern Wyoming, USA. The property contains the Bear Lodge REE Project, a disseminated rare-earth elements (REE) deposit, as well as the Sundance Gold Project, gold occurrences. The company recently reported a 10 percent increase of measured & indicated rare-earth mineral resources and a 61 percent increase of oxide and oxide-carbonate inferred mineral resources.
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