Colin Barr

Following the money in banking, economics, and Washington

Rarer still is your interest in Molycorp

October 28, 2010: 3:08 PM ET

Maybe the rare earths aren't as rare as we thought.

Shares of the rare earth stocks, notably Vancouver-based trader Rare Element Resources (REE) and Colorado's Molycorp (MCP), plunged Thursday after the New York Times reported China had resumed shipments of rare earth elements.

You'd send that mineralization COD

Shares of the Van Eck Market Vectors Rare Earth Strategic Metals exchange-traded fund dropped 1% in their debut, reversing the morning's 2% gain.

Molycorp, which is poised to become the lone U.S.-based rare earths miner, had tripled since its July debut but saw its shares tumble 11% to $34. Rare Element, which has seen its shares rise tenfold from $1 and change, slid 12% to $11.18.

Stocks of the rare earth element producers soared this summer amid questions about China's plans for exporting the minerals, of which it currently controls some 97% of global production. But as with so many assets at a time of free money, that rally fed concerns that the rare earth stocks were in a bubble.

A few more days like Thursday and at least we won't have to worry about that anymore.

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About This Author
Colin Barr
Colin Barr
Senior Writer, Fortune

Colin Barr has covered finance for Fortune.com since November 2007. Previously he was a writer and editor for TheStreet.com, winning a 2006 Society of American Business Editors and Writers award for "The Five Dumbest Things on Wall Street," and for Dow Jones Newswires. He is a 1991 graduate of Penn State and lives in Port Washington, N.Y., with his wife Meena Bose and their two kids.

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