Arafura Resources Ltd., due to start producing rare earths from its Australian project in 2013, said China’s decision to slash export quotas of the metals has seen their value rise about 7 percent this month.
The Nolans Rare Earths valuation, which uses Arafura’s own materials and Metal Pages China FOB prices for rare earths oxides for its model, has risen from $70.52 a kilogram at the end of the year to $75.23 a kilogram, the Perth-based company said in a statement today.
Rare earths, a group of 17 minerals that share similar properties, are used in hybrid cars, laptops, wind turbines and smart bombs. China, which controls more than 95 percent of the global market of the metallic elements, in July reduced export quotas for the rest of the year by more than 70 percent.
“Supplies will remain tight even when new projects are factored in,” Chief Executive Officer Steve Ward said in the statement. “Industry analysts attribute the price increases to a combination of the decrease in export quotas for 2011’s first half as announced by the Chinese Ministry of Commerce and increased demand, particularly for cerium and lanthanum.”
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