"The rest of the world, everybody outside of China, is going to need 55 to 65,000 tons of these materials and the Chinese government is going to limit those exports to probably somewhere around 25,000 tons," Smith said. "There's a huge gap there and Molycorp is going everything in its power right now to increase production."
Meanwhile, Smith said Molycorp will partner with Japan's Hitachi to produce rare earth magnets. The project will take place on U.S. soil, where Molycorp will be produce magnetic alloy material that will then be used in a joint venture with Hitachi to make rare earth magnets. Smith said the two companies will split the cost.
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Trader disclosure: On Dec. 21, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Pete Najarian owns (KRE) calls; Pete Najarian owns (YHOO); Pete Najarian owns (MSFT) call spreads; Pete Najarian owns (AKAM) call spreads; Pete Najarian owns (V) call spreads; Pete Najarian owns (WLT) call spreads; Pete Najarian owns (C); Pete Najarian owns (MS); Pete Najarian owns (NKE) call spreads; Pete Najarian owns (GE); Pete Najarian owns (F); Pete Najarian owns (BBY) calls; Pete Najarian owns (SMH) call spreads; Pete Najarian owns (M) call spreads; Pete Najarian owns (HK) calls; Pete Najarian owns (MRO); Pete Najarian owns (CNI); Cortes is short (XRT) vs. (SPY); Cortes is short (BAC) vs. (SPY); Cortes is short (MOS); Cortes is short (LVS); Cortes is long USD vs. Mexican Peso; Cortes is short European Stoxx Index; Cortes is short Corn; Cortes is short Nat Gas; Cortes is short Gold
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