In a statement on Friday, Quantum Rare Earth Developments (CVE:QRE) urged U.S. President Barack Obama to "counter China's actions" and set up a stockpile of rare earth materials, which are used in a number of advanced technologies from industrial magnets, to mobile phones and batteries.
"China's activities go far beyond a wake-up alarm. The time to act is now," said CEO Peter Dickie, in reference to China's recent restrictions in the rare earths mining sector.
The country, which accounts for 97% of global rare earth production, recently announced a 93,800 tonne limit on total rare earth output from the country, and a $3 or $9 per tonne tax increase, depending on whether the rare earth materials are considered 'light' or 'heavy'.
Light and heavy rare earths are differentiated according to their atomic weight, with heavy rare earths, such as Terbium, Thulium and Ytterbium, beng more valuable.
China said the tax hike is in an attempt to limit over-expansion in the rare earth mining industry, as well as protect the environment from mining damage.
"The combination of a crackdown on mining activities in China and that country's own stockpiling are causing chaos in markets for rare earths, which are vital to high-tech industries," Dickie added.
Currently, Quantum is drilling at its Elk Creek property in Nebraska to determine the extent of niobium, a steel hardener used in super-alloys for aerospace and defense technologies, and rare earth elements at the site. At the property, hole EC-93 returned 155.5 metres of 2.7% total rare earth oxides (TREO), including 54.9 metres of 3.3% TREO.
Quantum, whose stock on the TSX-Venture Exchange closed at $0.27 per share on Thursday, strongly supports the provision in the fiscal 2012 U.S. defense authorization bill, which will instruct the Department of Defense to prepare a rare earth materials inventory and supply source.