A mighty temblorChina's decision to impose more restrictions on rare earth minerals caused Chinese mining outfit China Shen Zhou Mining & Resources to surge over the past month. Stocks of all rare earth minerals players from Molycorp (NYSE: MCP) to Rare Earth Elements (NYSE: REE) have rocketed higher on the theory that not only will these minerals become more valuable, but will push the U.S. to once again start mining them.
While the Chinese miner soared, it's a misnomer to call China Shen Zhou a rare earth specialist. It mainly mines fluorite, an ore mainly used by the steel industry as a melting agent, and by the chemical industry in making hydrofluoric acid, but not one of the 17 rare earth elements. While it might contain traces of those elements, they hardly seem worthy of warranting the mark up in the miner's share price. This looks more of a case of investors piling into a stock that says "China" and "mining."
It could explain why CAPS members are virtually evenly split on its prospects and why two thirds of All-Stars rating believe it will underperform. As a result, CAPS member pchop123 might regret his decision to jump aboard this fast moving stock.
Mine the China Shen Zhou Mining & Resources CAPS page for what others think about its potential
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