(Forbes, Oct 31, 2006) Rare earths miner Lynas Corp Ltd said it expects to benefit from China's move to impose a 10 pct export tariff on rare earths used in wide range of applications including automotive catalytic converters, petroleum refining catalysts, glass polishing and ceramics.

Lynas said it expects the new tariff to restrict supplies outside China, pushing up prices to its benefit. China currently produces 95 pct of world's supply of rare earths.

The company owns the Mount Weld deposit in Western Australia, rated the richest rare earths deposit in the world. It will be the only significant producer of rare earths outside China when its Malaysian production plant starts in 2008.

Lynas anticipates the full burden of the tax will be included in the export prices of rare earths compounds and metals, effectively increasing international prices by 10 pct on Nov 6.

It said tightening supply and an aggregate 27 pct pricing advantage over the Chinese producers, due lower value added tax rates in Malaysia as well as the new China tariff, will enhance its ability to quickly penetrate the rare earths market outside of China and expand production from the initial 10,500 metric tons per annum to 15,000 tons per annum.

Lynas said the demand for rare earths outside of China currently stands at approximately 65,000 tons per annum.
source:Forbes