Teresa Matich reports thatrare earth companies gained following the Rare Earths Report on 60 Minutes. In a segment entitled Modern Life Devices Under China Grip CBS Lesley Stahl told the story of how China rose to dominate the industry, putting the start of it all back in 1992, when Deng Xiaoping mentioned the importance of rare earths in a speech. Stahl also touched on how rare earths are used in a range of modern technologies, from cell phones to fighter jets, and suggested that end users are still largely dependent on supply from China. Certainly, that message seems to have resonated with the stock market, as both producers and juniors in the rare earths space saw their share prices rise on Monday in the wake of the broadcast. Molycorp was up 26.36 per cent on a trading volume about three times its daily average. As Bloomberg points out, that is nowhere near the stock 2011 high of 77, and at the end of the 60 Minutes piece it was pointed out that the company is currently so deeply in debt that just last week, its own auditor warned it may not be able to stay in business.
However, the company released their quarterly financial report, which was not favorable. Still, Molycorp was not the only company to see gains on the market on Monday. Rare Element Resources was up 19.44 per cent, Frontier Rare Earths gained 11.76 percent. The company trading volume was more than five times its daily average. Tasman Metals rose 10.53 per cent to close on roughly twice its average trading volume. Ucore Rare Metals gained 6.6 per cent. Meanwhile, Texas Rare Earth Resources saw its share price receive a 4.6 per cent bump on Monday. Some market commentators have said that the rare-earths supply situation is less dire than is outlined in the CBS report. Writing for Forbes, Tim Worstall argues that Chinese monopoly has already been broken and that Molycorp and Australian Lynas could already be producing more than total non-China consumption of rare earths today.
CBS 60 Minutes: http://rareearthinvestingnews.com/22791-companies-gain-60-minutes-rare-earths-molycorp.html
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