Rare Earth Metals Getting Rarer

While we frequently discuss Gold, Silver and other commodities, there are an entire class of metals that most folks have never heard of, which are referred to as "rare earth" metals.

According to various definitions, "rare earth" metals are broken up into two distinct groups of elements, known as the "lanthanide" and "actinide" series.  A full listing of rare earths can be found here (http://www.chemicalelements.com/groups/rareearth.html).

Why do we care about rare earths?  Because, they're already rare and getting RARER still!

According to a recent article in the Financial Times, China’s leading producer of rare earth metals has been given government approval to build a strategic reserve, exacerbating concerns that Beijing is tightening its grip on the valuable minerals needed to produce green and high-technology products.

China supplies about 95% of the global market for rare earths, used to produce everything from hybrid cars to iPod music players.  Over the past three years, China has steadily cut export quotas for rare earth elements, saying it needs additional supplies in order to develop the domestic clean energy and high-tech sectors.

This has fed foreign suspicions that Beijing plans global domination of rare earths.  Deng Xiaoping, the former Chinese leader, said in 1992 that, while the Middle East had oil, China had rare earths.  However, foreign and Chinese industry executives doubt Beijing’s goal is to create an Opec-like price cartel.

Fortunately, a variety of rare earth metals are either under development, or currently being produced by two North American companies:  Avalon Rare Earth and Ivanhoe.  Avalon was recommended by James Dines, who writes a very well known newsletter.  Both of these companies are publicly traded if one should want to investigate possible ways to benefit from a potential future extreme world shortage.

I want to re-emphasize that I'm not recommending either of these companies, but want to inform readers of "Marko's Take" that they exist, should your investment dollars need a very high risk, but potentially high returning alternative to the Precious Metals arena.

Comments?  Questions?   TAKE ME ON!

Marko's Take