Strategic Metals, REEs & China.

China has imposed export restraints on raw materials including rare earths, tungsten and molybdenum, causing worldwide supplies to plummet, sending prices higher and threatening strategic stockpiles. China is the largest supplier of 28 of the 52 elements on the [British] Geological Survey’s risk list.

China’s hold over critical metals is under threat this morning, as Wolf Minerals is reopening a UK tungsten mine in an effort to break China’s near monopoly on tungsten supply. “Wolf is backed by Resource Capital Funds, which holds a 17 percent stake, and Traxys SA, with 9.6 percent, data compiled by Bloomberg show. Resource Capital is the largest shareholder in Molycorp Inc. (MCP), owner of the biggest U.S. rare-earth deposit. Traxys, the Luxembourg-based metals trader, also owns a stake in Molycorp.”  Is this the “invisible hand” of capitalism at work?

Is it just me that senses an industry change underway, as  the west has finally woken up to the danger of modern China needing more and more of its critical metal supply for its own economy? Will the Rare Earth Element sector be next? Are parties of interest already researching western REE firms especially the heavies? My guess is yes, and that 2012 will see some of the REE sector start to get fast tracked. But which firm is the next Wolf?

England Challenges China by Reviving Strategic Mine: Commodities
By Thomas Biesheuvel – Apr 4, 2012
An English mine last used to make armaments to defeat Hitler’s forces will be revived to challenge China’s grip on tungsten, among strategic metals at the heart of a deepening trade dispute with Europe and the U.S.

Wolf Minerals Ltd. (WLF) is developing a tungsten mine in Devon, southwest England, 70 years after it was last extracted there. The Hemerdon site is the world’s fourth-largest deposit and can produce about 3.5 percent of global demand for the metal, used to harden steel in ballistic missiles and in drill bits. China provides about 85 percent of worldwide supplies.

Tungsten was one of the metals cited when U.S. President Barack Obama filed a complaint to the World Trade Organization on March 13 against Chinese supply curbs. Tungsten is a “critical” raw material, according to the European Union, and the British Geological Survey places it at the top of its supply-risk list of materials needed to maintain the U.K.’s economy and lifestyle.

“A big element of what we are doing is providing a strategic supply to companies outside of China,” Wolf Managing Director Humphrey Hale said in an interview in London. “We’re answering a requirement from the market, which is strategic supply, and prices are at a position where we can make money from that.”

Wolf is backed by Resource Capital Funds, which holds a 17 percent stake, and Traxys SA, with 9.6 percent, data compiled by Bloomberg show. Resource Capital is the largest shareholder in Molycorp Inc. (MCP), owner of the biggest U.S. rare-earth deposit. Traxys, the Luxembourg-based metals trader, also owns a stake in Molycorp.
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The more I follow developments in the REE sector and cutting edge developments emerging from the global labs in graphene research, the more I am convinced that we are on the cusp of a new 21st century industrial revolution. A revolution that will lead us out of our mired western stagnant economies and into the next boom, mid-decade onwards. The REE sector will be a very important part of that new industrial revolution.

The rich…are led by an invisible hand to make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus without intending it, without knowing it, advance the interest of the society…”

Adam Smith. The Theory of Moral Sentiments.