Don Lay of Medallion Resources Talks Rare Earths Prices

China removed its export tariffs on rare earths, tungsten and molybdenum at the start of May, and shortly afterwards also announced changes to its resource tax regime for rare earths.

A number of analysts and market watchers have commented on how those changes may affect rare earths prices, and Ryan Castilloux at Adamas Intelligence even put out a 10-page briefing following a steady stream of inquiries on the subject. In the interview below, Don Lay, CEO of Medallion Resources (TSXV:MDL), weighs in with his thoughts.

In the short term, Lay believes the change is bad news, especially for rare earths companies outside of China. While he states that many market participants were expecting a convergence of prices in and outside of China, he adds that they were anticipating that convergence would happen at a sort of middle ground."The convergence has happened at a lower price," Lay notes, pointing out that the scenario that has knocked down the economics for plenty of projects outside of China.

The pricing Medallion could get for its rare earths products has also been set back, but Lay believes that the company can still be profitable at current prices given the low capital requirements and operating costs required by its monazite processing strategy.

Overall, Lay states that he expects stabilization in the market. "In the medium term, with demand increasing for rare earths and a single global price, the market eventually will get back on track," he notes. Lay also speaks about the recent deal between Molycorp (NYSE:MCP) and Siemens (FWB:SIE) in light of changes in China, and about Medallion's latest metallurgical test results.

Watch the video below for more of Lay's thoughts.

 

Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

Medallion Resources is a client of the Investing News Network. This article is not paid for content.

Related videos:

Ryan Castilloux: Magnet Rare Earths Prices Moving Higher on Increased Demand

Stabilization for Rare Earths Prices in 2015: Jon Hykawy

Don Lay of Medallion Resources Talks Rare Earths Prices from Rare Earth Investing News

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