Quantum CEO Predicts China's Export Limits on Rare Earths Will Benefit the Mining Industry
04 January 2011 - 7:05PM
Marketwired
Quantum Rare Earth Developments Corp. (TSX VENTURE: QRE)(PINK
SHEETS: QREDF)(FRANKFURT: BR3) ("Quantum", the "Company") announced
today that rare earth deposits currently being developed in the
United States and Canada carry the potential to prevent future
shortfalls of these important materials now that China is limiting
its exports of the elements. "While China's recent decision to cut
its exports threatens high-tech industries, rare earth mining
companies in the Americas and Australia will be able to fill the
gap," predicts Peter Dickie, President and CEO of Quantum Rare
Earth Developments.
Rare earth metals are relatively obscure elements that are
essential for many high-tech products, such as smartphones,
electric cars, many computers, and a range of military hardware.
Neodymium and dysprosium, for instance, are needed to make
top-performing magnets in electric motors and generators. Another
element, yttrium, is a key ingredient in fluorescent light bulbs
and flat screen TVs. So many products depend upon rare earth
materials that a recent Department of Energy report warned that the
American economy is vulnerable to shortages of these elements:
http://www.energy.gov/news/documents/criticalmaterialsstrategy.pdf.
"Without rare earth elements, some of the most innovative
industries in the world would be crippled," says Dickie.
The problem is that one country-China-has a virtual monopoly on
rare earth elements. More than 95% of all the rare earth materials
used today come from Chinese mines. "People know that American is
dependent on imported oil," Dickie observes. "What they may not
know is that America is far more dependent on imported rare earth
elements." That dependence worries top U.S. government officials.
"The availability of a number of these materials is at risk due to
their location, vulnerability to supply disruptions and lack of
suitable substitutes," says the Dept of Energy report.
In the past, China has exported enough rare earth elements to
meet the demand. But on December 28, 2011, the Chinese government
sent shock waves around the world by announcing that it would slash
exports of rare earths by 35% for the first half of 2011, compared
to the same period last year.
http://www.forbes.com/feeds/ap/2010/12/28/general-as-china-rare-earths_8226081.html.
China's action drew a swift response from the U.S. government
officials. "We are very concerned about China's export restraints
on rare earth minerals," a spokeswoman for the office of the United
States Trade Representative, Nefeterius Akeli McPherson, told the
New York Times.
http://www.nytimes.com/2010/12/29/business/global/29rare.html?_r=1&scp=2&sq=Rare%20earth&st=cse
But while the move threatens high tech industries, it's a boon
to mining companies outside of China, explains Quantum CEO Peter
Dickie. Indeed, industry analysts say not only that existing mines
in U.S., Canada, and Australia are now more valuable, but also that
more mines will be opened in the next few years. Investors quickly
saw the potential. In the days following China's announcement,
investors bid up the stocks of non-Chinese rare earth mining
companies such as Molycorp (NYSE: MCP), Rare Element Resources
(AMEX: REE) and Quantum (TSX.V - QRE, FSE - BR3). "It's only a
matter of time before China is not the major supplier to the rest
of the world," says Dickie. That future diversity of supply will be
good for the industries that depend on rare earths-and for the
companies that produce the elements, he says.
On Behalf of the Board,
Peter Dickie, President
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Contacts: Quantum Rare Earth Developments Corp. Peter Dickie
President and CEO (604) 669-9330 (604) 669-9335 (FAX)
www.QuantumRareEarth.com
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