11:07 AEST June 14, 2011 ABN Newswire (C) 2004-2011 Asia Business News PL. All Rights Reserved.
Toronto, Canada (ABN Newswire) - In its ongoing efforts to provide you with broader communications and industry information,
Avalon Rare Metals (TSE: AVL) (NYSE: AVL) is pleased to issue this Industry Bulletin, which reports on the dramatic appreciation in prices for the heavy rare earth elements over the last few weeks, both outside and inside China.
Based on information reported by Metal-Pages(TM) prices for individual rare earth oxide have risen 58% outside of China, and 96% inside China in the last six weeks. The largest percentage price increases have been for europium, terbium and dysprosium; three of the heavy rare earths. Europium and terbium are used in the energy-efficient lighting sector in Light Emitting Diodes (LED) with europium widely used as a red phosphor and terbium used as a green phosphor. Dysprosium is widely used as an additive to high strength neodymium iron boron magnets to improve their performance, particularly in high temperature operating environments. These magnets can be found in the traction motors in hybrid vehicles and direct drive generators in wind turbines.
Prices for rare earth elements increased steadily in 2010 outside China (FOB China) as discussed by Avalon in its Information Bulletin of August 23, 2010, due mostly to decreases in Chinese export quotas. However, in 2011 (especially over the last six weeks), REE prices have increased significantly inside China as well, reflecting decreased supply in the face of growing demand. This appears to be a consequence of the measures being implemented by the Chinese government to consolidate the rare earth industry, to make it more efficient and reduce environmental impacts. These measures include: cracking down on illegal mining, consolidation of producers in both the North and South, production quotas, and the imposition of tough emission limits on producers, forcing some to cease operations.
The evolution of the rare earth industry in China has been attracting a lot of mainstream media interest including National Geographic magazine which published a story in the current (June, 2011) issue on China's efforts to implement more clean energy production in a feature entitled 'Can China Go Green?'. The article highlights China's push to end its reliance on fossil fuels, especially coal. Immediately following this article is a feature on Rare Earths entitled 'Rare Earth Elements. The Secret Ingredients of Everything' which highlights the importance of Rare Earths in new technology, especially clean technology as well as China's dominance in the production of rare earths.
There is general consensus that demand for rare earths will continue to grow, and their use will expand, even in the face of these higher prices. There is also general acceptance now of the reality that historical prices did not reflect the true cost of extraction and higher prices are needed to make the industry more sustainable in the long term. Supplies will remain tight (especially for the heavy rare earths) until new projects such as Nechalacho come on stream over the next two to five years.
If you have any comments or questions on this article or the rare earths generally, please do not hesitate to contact Avalon directly at ir@avalonraremetals.com. To find out more about Avalon Rare Metals Inc., please visit our website at
http://www.avalonraremetals.com.
About Avalon Rare Metals Inc.:
Avalon Rare Metals Inc. (TSX: AVL) (NYSE: AVL) is a mineral exploration and development company focused on rare metals deposits in Canada. Its flagship project, the 100%-owned Nechalacho Deposit, Thor Lake, NWT, is emerging as one of the largest undeveloped rare earth elements resources in the world. Its exceptional enrichment in the more valuable 'heavy' rare earth elements, which are key to enabling advances in green energy technology and other growing high-tech applications, is one of the few potential sources of these critical elements outside of China, currently the source of 95% of world supply. Avalon is well funded, has no debt and its work programs are progressing steadily. Social responsibility and environmental stewardship are corporate cornerstones.
Contact:
WEB: www.avalonraremetals.com
EMAIL: ir@avalonraremetals.com
