Not totally unexpectedly, shares of rare earths miners (or potential miners) Molycorp (NYSE:MCP), China Shen Zhou Mining & Resources, Inc. (AMEX:SHZ), Rare Element Res Ltd (AMEX:REE) and Avalon Rare Metals (AMEX:AVL) all closed down by at least 4 percent on Wednesday as investors take a closer look at the companies.
All that these particular stocks are trading on is potential and rare earth demand, more than the reality of what they are doing, which is basically nothing, as far as mining goes, with the probable exception of China Shen Zhou Mining & Resources, Inc..
Molycorp CEO Mark Smith has been all over the media attempting to position the company as the giant outside of China, but most of that is potential more than reality, as they are mining very little, and most through a recent small acquisition.
Smith has let it be known he's interested in making acquisitions, but needs to do less talking and taking more action. One problem he faces is the huge surge in valuaton of rare earths companies coming from the announcement by China they were cutting back on another 35 percent in rare earth exports in the early part of 2011, following up on the announcement in the middle of 2010 they were cutting back rare earth exports by 40 percent.
Shares of Molycorp (MCP) closed at $72.01 Wednesday, dropping $5.53, or 7.13 percent.
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