SOURCE: The Bedford Report

The Bedford Report

October 05, 2011 08:16 ET

China Argues Rare Earth Price Drop "Unrealistic" -- North American Explorers to Benefit

The Bedford Report Provides Equity Research on Rare Element Resources and Quest Rare Minerals

NEW YORK, NY--(Marketwire - Oct 5, 2011) - Rare Earth stocks took a noticeable hit last month after JP Morgan analyst Michael Gambardella warned that this year's massive run-up in rare earth prices was being driven by speculation. Outside North America, officials from China -- which essentially controls a monopoly on the rare earth sector -- argue that rare earth prices are likely to remain high, however. The Bedford Report examines the Rare Earth Elements Industry and provides stock research on Rare Element Resources, Inc. (NYSE Amex: REE) (TSX: RES) and Quest Rare Minerals Ltd. (NYSE Amex: QRM) (TSX-V: QRM). Access to the full company reports can be found at:

Li Zhong, the vice-general manager of top producer Baotou Steel Rare-Earth Hi-Tech Holding, told a conference organized by Metal Pages that China's role as the dominant global supplier of rare earths will gradually come to an end as the industry focuses more on the domestic market. Zhong argues that it is now "unrealistic" for rare earth prices to fall back to previous levels as Beijing tightens the sector.

Xu Xu, the chairman of the China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters, explains that he hopes "other countries would share the burden" of rare earth production after depending on China's overmined deposits for a decade. China has argued that previous production and export levels were not sustainable in the long term, and have decimated parts of the nation's environment.

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Rare Earth miners worldwide are finally responding to the rally in prices. Australia, South Africa, Alaska, Canada and Sweden are considered to have the leading mines in terms of quality outside of China.

Rare Element Resources owns and operates the Bear Lodge mining facility in Wyoming, which contains one of the largest disseminated rare earth deposits in North America, as well as extensive gold occurrences. During the year ended June 30, 2011, a total of $7,339,669 (2010 - $2,724,518) was spent on the Bear Lodge Rare Earth Project, including $412,330 (2010 - $nil) on the pre-feasibility study and $1,172,678 (2010 - $69,713) was spent on the Sundance Gold Project.

Quest Rare Minerals Ltd. is a Canadian-based exploration company focused on the identification and discovery of new and significant Rare Earth deposit opportunities.

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