SOURCE: The Bedford Report

The Bedford Report

September 22, 2011 13:43 ET

Rare Earth Prices to Remain High -- North American Explorers Look Strong in the Long Term

The Bedford Report Provides Equity Research on Molycorp & Ucore Rare Metals

NEW YORK, NY--(Marketwire - Sep 22, 2011) - Rare Earth stocks took a noticeable hit this week 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 - who 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 Molycorp, Inc. (NYSE: MCP) and Ucore Rare Metals, Inc. (TSX-V: UCU) (PINKSHEETS: UURAF). 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 organised 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" to 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.

Colorado-based Molycorp Inc. plans to increase output to 40,000 tons a year by the end of 2015. Last week Molycorp, owner of the largest rare-earth deposit outside of China, broke off funding talks with the Japanese trading company Sumitomo Corp, as the rare earth explorer found other sources for the $781 million it needed to expand its rare-earth mine and manufacturing facility at Mountain Pass, California.

Ucore Rare Metals is a junior exploration company focused on establishing REE, uranium and other rare metal resources through exploration and property acquisition. With multiple projects across North America, Ucore's primary focus is the 100% owned Bokan - Dotson ridge REE property in Alaska.

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