James Dines, whose investment track record includes calling for gold investment when it was selling for about $300 and both bought internet stocks before the big boom AND also sold internet stocks before the big collapse, is looking hard at the shortage in rare earth elements which are so important to many modern tech products such as cell phones.
Rare earth mineral producer prices have been on fire recently as countries have awoken to discover China owns most of the world’s supply of REE’s and that they are essential for most green technology as well as military items including smart bombs.
Although the element ores themselves aren’t technically “rare” or difficult to find, locating economic quantities, building processing facilities, getting financing, permits, and even finding scientists and technicians capable of refining and separating them, let alone turning the final metal into high-strength magnets, is not easy and it can take a decade to turn a major deposit into some actual usable metal such as an electric car.
The prices of producing rare earth element companies or even those which have old mines or leases on promising properties, have surged by as much as 1000% in two years until a recent consolidation where some stalled and others dropped 10% or so in price (still far above the cost when Mr. Dines recommended them.)
Some people argue that since rare earths aren’t actually rare in the ground this is all a hoax. Of course gold isn’t technically rare either, you can find it is sea water, but it can cost a bit to go from a bucket of water to a gold coin.
Others simply look at the international financial turmoil caused each time China announces yet another cut in supply or at the price of magnet metal or even the price of cerium oxide used to polish glass (up 4000% in two years).
A good source of breaking news is the rare metal blog http://www.raremetalblog.com/.
A good source for stock recommendations is the James Dines Newsletter
Prices of the metals themselves can be found at
http://www.metal-pages.com/ and
http://www.metal-pages.com/metalprices/rareearths/.
Commercial REE’s materials include: rare earth carbonate, cerium oxide, dysprosium oxide, europium oxide, gadolinium oxide, lanthanum oxide, mischmetal, neodymium oxide, praseodymium oxide, praseodymium neodymium oxide, samarium oxide, terbium oxide, yttrium oxide
Although there are domestic REE deposits in many countries, including the United States, barriers to production such as regulations, lack of infrastructure, or simply a lack of experts to process the ores are likely to keep China in the driver’s seat for a decade or more since that country now controls from 95 to 99% of the current production of various critical rare earth elements.
One U.S. company, is working to reopen U.S. production but is reportedly searching the world for the experts needed to actually refine the metals – getting them out of the ground isn’t a big challenge – turning ore into usable metal is very complex, not a simple process such as getting gold out of ore.
When U.S. REE production stopped a decade ago the top experts were forced to go to other countries for work.
