Rare earth stocks fly on talk of Chinese export bans

Gold edged towards an all-time high this week but the bigger news for Australian investors was the surge of interest in rare earth stocks following speculation that China would impose an export ban on the material.

By Tim Treadgold

Posted on April 13th, 2023Share

Concern about tighter rare earth controls have surfaced regularly since China first stopped exports in 2010 during a dispute with Japan.

It was that event, following the collision of Japanese and Chinese ships, which led to the birth of the Australian rare earth industry with Japan rushing to fund the Mt Weld mine of Lynas Rare Earths in WA.

Back then, prices soared for the most important rare earths, neodymium and praseodymium, which are used as permanent magnets in a host of technologies such as wind turbines and in electric vehicles (EVs).

A repeat of the events of 13 years ago is possible, which is why rare earth stocks jumped in early trading this week, but there is no evidence yet of an upward price move, rather there was a slight (and unexpected) fall in the price of neodymium – and by yesterday most of the rare earth stocks had stabilised or dropped a little.