rare earth monopoly coming to an end

http://www.proactiveinvestors.com.au/companies/news/14410/rare-earth-monopoly-coming-to-an-end-14410.html

Rare earth monopoly coming to an end
Friday, March 04, 2011 by Anthony David from Critical Strategic Metals
Rare earth monopoly coming to an end

Canada based Stans Energy Corporation (CVE: RUU) is currently focused on developing mining properties in Kyrgyzstan.

The company acquired the mining license for the past-producing Kutessay II rare earth mine in October 2009 and is now gathering and analyzing its historical data.

Kutessay II along with the Kyrgyz Chemical Metallurgical Plant (KCMP) was the Soviet Union�s most advanced mining properties at one time.

It supplied 80% of the nation�s rare earth metals for 30 years from 1960 to 1991. The mine was shut down in 1991 because of a fall in rare earth prices.

According to 1996 estimates, Kutessay II has over 20 million tonnes of rare earth metals (0.22�0.30% TEM range).

This former open pit mine contains reserves of 15 rare earth metals that were earlier refined to produce 120 rare earths compounds.

KCMP is supported by good infrastructure in terms of a railway line, qualified labour and steady power supply.

In January this year, Stans Energy announced that it had reached an agreement with the majority owners of KCMP to purchase 100% of the rare earth processing complex.

Since the mine was a previously functioning mine, Stans Energy can save both time and money before beginning production.

The company now owns the only past-producing heavy rare earth elements (HREE) outside China. With a 25-year mining license, Stans Energy is the only foreign company in Kyrgyzstan with a mining license.

Mining is a vital part of Kyrgyzstan�s economy so Stans Energy�s efforts have a lot of support from the government and citizens.

Experts are of the opinion that Stans Energy is suitably positioned to create a promising non-Chinese rare earth resource.

California based Molycorp Minerals (NYSE: MCP) is on a similar path. It is reopening the Mountain Pass rare earth mine that operated for 50 years before it was shut down in 2002.

Molycorp purchased the property in 2008 and spent the last couple of years studying and analyzing the mine.

Interested parties predict that Molycorp Minerals could soon be a supplier of rare earth metals to China. Japan�s Sumitomo Corporation is providing $100 million of the $531 million required to complete the project.

The company plans to begin operations by producing about 3,000 tonnes of rare earth metals initially and reach 20,000 tonnes by 2012. The final production rate is expected to reach 40,000 tonnes per year.

Australia�s Lynas Corporation (ASX: LYC) is another company that is ready to begin rare earth production.

The company plans to begin initial operations later this year with the production of 11,000 tonnes per year. Production rates are expected to reach 22,000 tonnes per year by 2012.

Andrew Sullivan, an analyst at BBY Limited said, �Lynas is in a good position because it signed a number of sales agreements.

"It definitely has first-mover advantage for Western or non-Chinese rare earths users that are looking to diversify. The same could be said about Molycorp. It�s got agreements in place for quite a bit of its production.�

A contribution by Critical Strategic Metals