China scrapping rare earth export tax will boost demand — Lynas
China’s decision to eliminate its export tariffs on rare earths and other metals may boost frozen demand for the products, according to Australia’s Lynas Corp.
In an interview with Bloomberg, the company’s chief executive, Amanda Lacaze, said most customers have been living off inventories while awaiting clarity over China’s policy on rare earths export. “[Now] they’ll come back and start placing orders.”
Her comments follow China’s decision Thursday of killing the controversial policy that caused a diplomatic row and international trade dispute, while driving rare earth prices up.
The country’s Ministry of Finance said tariffs to be removed beginning May 1 include those related to shipments of ferroalloys, indium and aluminum rods and bars, Reuters reported.
China, the top producer and consumer of rare earths, imposed the restrictions in 2009 while it tried to develop its own industry for the 17 minerals, which are crucial to making a wide range of high tech devices, from smart phones to electric cars.
It is estimated that China is responsible for about 93% of global rare earth output, despite only having a third of the world's deposits.
Lynas (ASX:LYC) and US rival Molycorp (NYSE:MCP) are the world's only two rare earths miners outside China, and both companies have been struggling to stay afloat. However their stocks were soaring on Friday. Molycorp was up 9.57% to 0.915 in pre-market trading, and Lynas closed up 6.82% to 0.0470.