Rare Earths

Discussion in 'Money, Investing & Precious Metals' started by Canadian, May 28, 2009.

  1. Canadian

    Canadian Well-Known Member

    1,512
    0
    This sounds like a new category of investments but it has been around for a while. It's a good thing to look into for those who like Uranium, Silver, and Gold.

    Rare earths are elements that are used in production of electronics and batteries. Stuff like cell phones, DVD players, TV's, Computers, Lighting, Catalytic Converts, and all kinds of other stuff.

    The current market for rare earths in the U.S. today is about 1 Billion dollars a year. These are essential components in generators and wind turbines. The motors and electronics in each Toyota Prius contain a total of 26 Kilograms of rare earths.

    Currently China controls over 90% of the world's production of rare earths. Other countries like Japan have industries that rely upon rare earths but have not resources on their own soil. China has more rare earths than any other place in the world. They are also buying up all of the companies and land that have rare earths. They have bought large amounts of land and resources in Australian territory.

    This is a move to have a global monopoly on elements that the world cannot do without. This will lead to a global shortage and increased prices. it may also cut countries like Japan out of the electronics business. It also effects the U.S. in that the chip industry is regarded as part of America's "strategic" military production.

    Here are some stocks to watch:

    Arafura Resources ARU.AX

    Avalon Rare Metals AVL.TO

    LYNAS LYC.AX

    Rare Element Resources RES.V

    Sigma-Aldrich SIAL

    My investor letters are predicting a "super bull market" in rare earths in the long term as China secures their monopoly on rare earth resources around the world. As of today most rare earth mining stocks are down 94% from historic highs. A great time to buy and stocks for this undervalued sector are super cheap. As electronics become more popular and the world oil shortage continues demand for rare earths will only increase.
     
    Last edited: May 28, 2009