Molycorp.Inc. (fka MCPIQ)

[RareEarths]

Wall Street Cheat Sheet: Is it time to invest in Rare Earths?

A few years ago, rare earth elements (REEs) and the shares of REE producers — particularly Molycorp (NYSE:MCP) — were on every investor’s radar. As the story went, China controlled most of the world’s supply and production of REEs, and yet these elements are essential for producing modern products from iPhones to hybrid and electric cars. In 2011, the Chinese came out and threatened to restrict REE exports to the rest of the world, and that sent prices soaring. Investors in Molycorp saw triple digit gains, and investors in some of the smaller, under-the-radar companies did even better. But since then, investors have largely forgotten about REEs and the shares of REE producers. Molycorp, which was a darling of Wall Street at $70/share in 2011, now trades at below $3/share as REE prices are down and the company cannot turn a profit. However, we recently got some news — reported by Bloomberg – that could turn this bear market around. The Chinese are worried about pollution, and REE mining generates a lot of pollution. The solution: restrict REE mining. If the Chinese go through with this, it follows that the global REE supply will decline and prices have to go back up again. This means that going forward, assuming that demand for products containing REEs remains robust, REE prices will rise and that REE producers should rise in price as well. We are already seeing this as Molycorp shares are up substantially — over 10 percent — on the news.

source: http://wallstcheatsheet.com/business/is-it-time-you-gambled-on-rare-earth-elements.html/?ref=YF