American Elements Advises of New 10% Export Tariff on Rare Earth Metals Anticipated October 1 by Chinese Government

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American Elements has advised its customers and supply chain partners of an anticipated new 10% export tax on all rare earth metals from China; essentially the sole world producer. The tariff is expected to be announced by the Chinese government on or about October 1, 2007.

American Elements has advised its customers and supply chain partners of an anticipated new 10% export tax on all rare earth metals from China; essentially the sole world producer. The tariff is expected to be announced by the Chinese government on or about October 1, 2007.

The increase is in keeping with the Chinese government's stated intent to upwardly revalue and limit the export of China's significant recoverable rare earth reserves. This upward re-valuation has been accomplished through a mix of export tariffs and export quotas. In 2005, the PRC restricted the export of rare earths to domestic producers and distributors who were granted specific volume quotas. The number of producers and the limited export volume granted the remaining producers continues to be reduced quarterly by the Chinese government shrinking the global supply of new rare earth production outside of China at a time when world demand is rising. Because the quotas are based on volume irrespective of value they additionally put pressure on Chinese producers to only export added value and higher value rare earth production; one of the stated purposes of the quota system. Additionally, two prior 10% export tariffs have been enacted in less than a year directly increasing producer costs.

Metals which will experience higher prices after the export tariff's effective date include cerium, praseodymium, neodymium, samarium, europium, gadolinium, terbium, dysprosium, yttrium, holmium, erbium, thulium, ytterbium and lutetium.

American Elements is a global manufacturer and developer of engineered and advanced materials with the world's largest industrial catalogue of rare earth materials accessible electronically at http://www.americanelements.com . For further technical and pricing information on rare earth metals, please contact your local American Elements distributor or American Elements U.S. corporate headquarters at (1)310-208-0551, FAX (1)310-208-0351 or customerservice(at)americanelements.com

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