A Vancouver miner has found a new reason to promote its prospective rare earth element (REE) property following China’s decision to drastically cut export quotas for the remainder of the year.
Up until a few years ago rare earths were a relatively unknown collection of metals on the periodic table, but now they are used to make essential components for many green technologies and consumer electronics.
China produces more than 90% of the world’s supply, but earlier this month slashed its export quotas 72% for the remainder of 2010.
In a release Thursday morning, mining junior Tasman Metals Ltd. (TSX-V:TSM) said that decision will shorten supplies, drive up prices and increase the demand for new REE mines.
“Tasman’s portfolio of heavy REE projects in the politically stable, mining friendly jurisdictions of Sweden and Finland has the potential to provide one of these supply alternatives, particularly for the European region,” the company said in a release.
Tasman is among a plethora of junior Canadian mining companies that are trying to develop REE properties.
John Kaiser, a rare earth analyst and author of Kaiser Bottom-Fish Online, told BIV the rare earth game is highly prospective but has yet to prove its financial viability.
He said: “The prices still aren’t significantly high enough to make it clearly a no-brainer that these things are economic.”
The sector is still too small to attract the major mining companies, he said, but the demand for hi-tech gadgets means the metals will continue to be sought after. That means, one way or another, new REE mines need to be built outside of China.
Said Kaiser: “They now have to think about a long-term solution, and the only solution is to put a number of these large deposits [into production].”