Canadian rare earth stocks feel the heat of Japan crisis
(Reuters) - Shares of Canadian rare earth companies, including Neo Material Technologies NEM.TO, fell on Tuesday on rising fears that demand from No. 2 consumer Japan may dwindle following the catastrophic earthquake and tsunami in that country.
"Rare earths are down because everybody is spooked about Japanese headlines in terms of the potential nuclear meltdown and they are worried about the demand," Fraser Mackenzie analyst Dev Bhangui said.
Japanese firms consume about 30,000 tonnes a year of rare earth minerals to produce mobile phones, electric car motors, high-tech electronics parts and batteries.
Shares of Neo, which gets almost a fifth of its revenue from Japan, were down about 4 percent at C$7.52 on the Toronto Stock Exchange. They fell 7 percent on Monday as well.
Across the border, shares of Molycorp Inc MCP.N, the largest U.S. producer or rare earths, were down 8 percent at $41.88 on the New York Stock Exchange.
Shares Avalon Rare Metals (AVL.TO: Quote) were down 5 percent. Shares of Great Western Minerals Group Ltd GWG.V slumped 11 percent while those of Rare Element Resources Ltd RES.V REE.A fell 6 percent on the Toronto Venture Exchange.
Frontier Rare Earths Ltd's FRO.TO shares slumped 15 percent to hit a session low of C$2.54, their lowest since their market debut last November.
Japan's nuclear crisis, already the worst since the 1986 Chernobyl disaster, also hit stocks of uranium producers and companies that build nuclear reactors.
(Reporting by Aftab Ahmed and Bhaswati Mukhopadhyay in Bangalore; Editing by Sriraj Kalluvila)
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