Shares in Chinalco-backed copper and gold prospector China Yunnan Copper Australia roared up 73 per cent yesterday when the Sydney-listed exploration minnow announced it had discovered rare earths at a site in Queensland state.
CYC Australia, a loss-making company capitalised at A$45 million (HK$349 million), said it had found an unspecified quantity of various types of yttrium, an element used in colour televisions and to strengthen glass, at its Mount Dorothy project.
Jason Beckton, the company's managing director, told the Post he did not know why the shares had risen so much.
Analysts have cautioned that rare earths-related stocks could be vastly overvalued.
China, which produces 95 per cent of the elements, which are used to make hi-tech products from iPods to smart bombs, has been slashing exports dramatically since June, garnering intense criticism from the US and Japanese governments and causing valuations of rare earths-related companies to soar.
Beijing, which stands accused of using rare earths as a bargaining chip in its currency war with America, says it is curtailing supplies to clean up a sector that has been blighted by environmentally damaging and illegal mining.
