Lynas Corporation (ASX: LYC) is focused on becoming a producer of rare earths, and holds one of the richest deposit of rare earths in the world at Mount Weld in Western Australia.
Lynas Corporation reports Rare Earths price at Mt Weld hits new high
Lynas Corporation (ASX: LYC) has reported a new price high of US$16.56/Kg was reached on 7 June 2010 for the average Mount Weld Rare Earths composition on a FOB China basis.
This news bodes well for Lynas as it owns the richest deposit of Rare Earths in the world at Mt Weld, 35km south of Laverton in Western Australia.
A feasibility study has been completed on the Rare Earths deposit and all Australian approvals required for project development have been received.
The new price high reinforces the value of the Mount Weld Rare Earths resource and the two plants currently under construction; the Concentration Plant in Western Australia and the Advanced Materials Plant in Malaysia.
Lynas has received the environmental and municipal approvals from the Malaysian authorities for the Plant in the Gebeng Industrial Area in Kuantan.
Lynas is on schedule to start production as planned early in the third quarter of 2011, offering the first significant source of new supply of Rare Earths outside of China.
China has recently announced that only a few select State Owned Enterprises will be allowed to mine Chinese Rare Earths resources.
According to the Chinese Society of Rare Earths, “the mineral is very much undervalued because of over-exploitation and improper management. So the latest proposal is critical and will benefit the whole industry.”
In March the Ministry of Land and Resources stopped issuing new licences until 30 June 2011 ans has capped this year's production at 89,200 tons, up 8.36% year-on-year.
The Chinese Government is tightening the controls within China to enforce the production quota system and decreasing mining which was occurring in breach of this production quota system, according to recent news reports.
Rare earth prices are only up 20% since 1979 despite demand that has tripled in the past decade.
Lynas Corporation has anticipated the increase in prices as demand continues to recover strongly in 2010.
Demand is further demonstrated by the 230% increase in Japanese Rare Earths imports in April 2010 from a year earlier, the second month in a row Japanese imports have increased significantly year-on-year.
The price high for the average Mount Weld composition prior to the global slow down in 2008/2009 was US$15.41/kg in the first week of July 2008.
