Producers of rare-earth minerals lost ground Monday on news that China is removing export quotas on the minerals.
Shares of fell 12 percent to 76 cents, continuing a long slide from its one-time high of $77.54 in 2011.
Rare-earth minerals including smartphones, electric-vehicle batteries, wind turbines, fiber optics, lasers, disk drives, radar and missile guidance systems.
China announced Monday that after the World Trade Organization ruled against China in a fair-trade complaint filed by the U.S. and other countries.
Analysts said China’s move could further depress rare-earth prices, which have fallen over the past three years after soaring to record highs.
“In general, it suggests more competition and potentially negative consequences for producers,” said Karr McCurdy, president and CEO of Denver-based mining consultant firm Behre Dolbear Group Inc.
The Market Vectors Global Rare Earth/Strategic Metals index fell 2 percent Monday and is down more than 29 percent over the past year.
China has about 30 percent of global deposits of rare-earth minerals but produces more than 90 percent of world supplies.
, then watched its share price more than quadruple when it appeared that Chinese quotas would produce a surge in demand for U.S.-produced rare earths such as terbium, dysprosium, europium, samarium, yttrium, neodymium and praseodymium.
But as investment capital poured into mining operations, McCurdy said, “rare earth became a sort of oxymoron. It’s not as common as silica in the earth’s crust, but it’s not really that rare either.”
Molycorp’s chief assets are the Mountain Pass rare-earth mine and processing plants in eastern California, about 50 miles south of Las Vegas.
Molycorp spokesman Jim Sims said China’s removal of export quotas may not have a significant effect on the market because China already is exporting less rare earth than its quotas allow.
Sims said Molycorp has been insulated, to a degree, from weak rare-earth prices because part of its production is converted to specialty chemicals, whose prices have remained steadier.
However, the firm’s stock has fallen 87 percent over the past year. Molycorp said it was informed last week by the New York Stock Exchange that its share price was not in compliance with listing standards that require a minimum average price of $1 a share over 30 consecutive trading days. NYSE regulations give Molycorp a six-month period in which to regain the $1 average minimum.
Steve Raabe: 303-954-1948, sraabe@denverpost.com or twitter.com/steveraabedp
