SOURCE: The Bedford Report

The Bedford Report

May 31, 2011 08:16 ET

Molycorp and China GengSheng Benefit From Surging Rare Earth Prices

The Bedford Report Provides Analyst Research on Molycorp & China GengSheng Minerals

NEW YORK, NY--(Marketwire - May 31, 2011) - Demand for rare earth elements continues to skyrocket as the metals play an integral role in modern technology. It is estimated that China holds about 30 percent of the world's rare earth deposits, but accounts for over 95 percent of global production. With prices for the elements surging higher, explorers worldwide are finally trying to cash in on this lucrative sector. The Bedford Report examines the Rare Earth Elements Industry and provides research reports on Molycorp, Inc. (NYSE: MCP) and China GengSheng Minerals, Inc. (NASDAQ: CHGS). Access to the full company reports can be found at:

Rare earths came under the spotlight two years ago after China started to reduce export quotas. Beijing's influence aroused concern when exports of rare earths to Japan were temporarily suspended after a diplomatic dispute. China has continued clamping down on production and sale of rare earth elements, citing a need to clean up highly polluting production processes and to stop illegal exports. This month Beijing said it cracked down on smuggling of rare earths and imposed quotas for exports of rare earth alloy products as part of its campaign to strengthen control over the sector.

Statistics collected in Hong Kong show exports of rare earth metals have shrunk in half over the past year. Over the same period, the value of exports has soared to more than $121,000 per tonne, a 10-fold jump from a year ago.

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Mark Smith, CEO of Molycorp, explains that, "unless alternative sources for rare earths are brought on, we are going to have a very significant shortfall in terms of how much material is available versus how much we need." Molycorp plans to double production in its California mine by the end of 2013. Presently, Molycorp's Mountain Pass mine produces about 3 percent of the world's rare earths from stockpiled concentrate, but the company plans to eventually turn out a quarter of the total supply.

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