Toronto, Aug 24, 2010 AEST (ABN Newswire) - Avalon Rare Metals Inc. (TSE:AVL) (OTCQX:AVARF) announce in our ongoing efforts to provide you with broader communications and industry information, we are pleased to issue this Industry Bulletin which reports on rapidly rising prices for the full range of rare earth element oxides. These significant price increases are in most part attributable to China's recent decision to impose a further reduction of rare earth export quotas, compounded by rising demand for these elements outside China as consumers scramble to secure supplies.

Based on data reported by Metal-Pages(TM) and Asian Metal(TM) prices for individual rare earth oxide have risen between 22% and 750% since January, 2010, although the most significant rises have occurred since the June announcement on export quota reductions. The largest percentage price increases have been for cerium and lanthanum, which most analysts believe is largely due to China's exporters limiting exports of the low valued light rare earths in favour of the high valued heavy rare earths, creating an artificial (and likely temporary) shortage of these light rare earths outside China. However, there is also increased demand anticipated in the catalyst and battery markets for cerium and lanthanum, the latter linked to growing demand for hybrid and electric cars.

With the exception of terbium, today's prices for all the rare earths are the highest they have been since 2001, when price data became more widely available for individual rare earth elements. Based on a simple, un-weighted, arithmetic average, rare earth prices as a group have risen a remarkable 300% since the beginning of 2010! This has no doubt contributed to the increased trading activity witnessed recently in the shares of rare earth companies such as Avalon.

China's Ministry of Commerce had also indicated that it would implement a range of policies putting the government in control of private and unauthorized mines that produce rare earth elements (especially from the heavy rare earth-rich South China ionic clays), implementing stricter regulations towards improving environmental performance of its mining sector, and requiring foreign companies to move factories to China to complete production of items using rare earths.

The following table illustrates the change in prices for each of the most commonly traded rare element oxides based on data reported by Metal-Pages(TM), and Asian Metal(TM) on an 'USD FOB ex-China per kilogram' basis. For simplicity, the prices documented are the mid-points between the bid and the ask prices on the reference dates.
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       Rare Earth Oxide   As of Jan 5 2010  As of Aug 5 2010  %Increase
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Heavy    Europium               485               590            22
Rare     Terbium                365               605            65
Earths   Dysprosium            117.25           286.50          144
         Yttrium                10.25            34.50          236
         Gadolinium             6.75             40.00          490
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Light    Neodymium             22.50             55.25          145
Rare     Praseodymium          21.50             54.50          155
Earths   Lanthanum              5.60             33.50          500
         Samarium               3.95             31.80          720
         Cerium                 4.15             33.00          695
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There is general consensus that there will be growing demand for rare earths to enable Clean Technology and tight supplies (especially for the heavy rare earths) until new projects such as Nechalacho come on stream over the next five years. Consequently, significant prices increases are anticipated, although the magnitude of the recent increases has surprised many industry observers. In some cases, individual rare earth prices are already ahead of price forecasts for 2015!

With the recent completion of a positive prefeasibility study, Avalon is moving forward rapidly with the development of its Nechalacho rare earth elements deposit at Thor Lake, NWT, the most advanced potential new source of heavy rare earth elements in the world.

About Avalon Advanced Materials Inc

Avalon Advanced Minerals Inc TSE AVLAvalon Advanced Materials Inc. (TSE:AVL) (OTCMKTS:AVLNF) (formerly Avalon Rare Metals) is a Canadian mineral development company specializing in niche market metals and minerals with growing demand in new technology. The Company has three advanced stage projects, all 100%-owned, providing investors with exposure to lithium, tin and indium, as well as rare earth elements, tantalum, niobium, and zirconium. Avalon is currently focusing on its Separation Rapids Lithium Project, Kenora, ON and its East Kemptville Tin-Indium Project, Yarmouth, NS. Social responsibility and environmental stewardship are corporate cornerstones.

     


Contact

Don Bubar
President & CEO
Avalon Rare Metals Inc.
Tel: +416-364-4938
Fax: +416-364-5162
Email: ir@avalonraremetals.com
www.avalonraremetals.com


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