Transcription of Finance News Network Interview with ProEdge Media Corporation CEO, Tracy Weslosky
Lelde Smits: Hello I’m Lelde Smits for the Finance News Network and joining me today is Tracy Weslosky CEO of ProEdge Media Corporation, the
publisher of ProEdgeWire.com. Tracy welcome to Australia and to FNN.
Tracy Weslosky: Well thank you for having me, it’s a pleasure to be here.
Lelde Smits: Let’s get to rare earths, why are you excited by them?
Tracy Weslosky: I don’t think there is anybody that appreciates science and technology that cannot be excited about rare earths. If we can get a sustainable amount of production of rare earths that are outside of China, we can have a pricing mechanism that people can count on. And I cannot wait to see the new innovations and technology that occurs as a result of it.
Lelde Smits: And what is happening in the rare earths market?
Tracy Weslosky: Well I think another reason to be very excited about rare earths in the market in particular, is if you’ve been tracking them since the beginning of 2009, the market caps have all increased on average approximately 520 per cent. So that’s a lot to get excited about.
Lelde Smits: And why do you believe we have seen prices rise as much as they have?
Tracy Weslosky: Well the reason is someone woke up about four years ago and said – wow, look the Chinese currently are controlling 95 per cent of the processing and 90 per cent of the world’s control of rare earths, and there must be a reason why. And that’s because they understood they can make some serious amounts of money off of these rare earths.
Lelde Smits: And why do you believe that investors should be getting on board the rare earths story?
Tracy Weslosky: I think the reason why investors should be following the rare earths story, is that if you have any interest in any kind of green energy including technology applications, then you want to understand rare earths much better.
Lelde Smits: Interesting you say that because rare earths and radioactivity are sometimes put in the same sentence. Why do you believe that people associate the two?
Tracy Weslosky: The people that often utilise rare earths and radioactive together in the same sentence are obviously, I would argue, are misinformed. You want to put rare earths and obviously, you usually have uranium and/or thorium on the same properties. So I think it’s usually people that don’t understand rare earths properly, or do not understand uranium properly that like to use the radioactivity term.
Lelde Smits: Looking closer at rare earths companies, who are you currently working with?
Tracy Weslosky: Well that’s an interesting question. Currently I work with over 40 publicly listed rare earth companies, but I’m also tracking nearly 400 publicly listed companies worldwide. Additionally I have the only rare earth indexes that are calculated on FTSE and Standard & Poor’s. So we have the rare earth leaders and the rare earth global, and the rare earth Shariah Index which track 15, 30 and five companies, respectfully.
Lelde Smits: And how does pricing work in the rare earths sector?
Tracy Weslosky: Well I think pricing is one of the most intriguing aspects of the rare earths sector. What makes the rare earths sector interesting is it’s not like all the other resource sector companies, and I think people need to understand that. It’s more like a chemistry equation. So it’s not like gold where you have a common price for gold and you can then put a net price valuation on the company, based on those gold prices. With the rare earth industry it depends what you’re going to get out, a lot of people use the term basket, it’s inaccurate. So as an investor it’s very complex actually investing in these rare earth stocks. And in addition to that, we don’t have a futures market so it’s a complex topic to understand.
Lelde Smits: So Tracy, which companies do you think are doing a particularly good job of developing rare earths and bringing them to market?
Tracy Weslosky: Well I mean clearly, Lynas Corporation Limited (ASX:LYC) is a frontrunner. Lynas and Molycorp Inc. (NYSE:MCP) and right now we’re all waiting to see what happens with both of them in the near future, and that’s going to affect the rest of the market. As for the rest of the companies in the market, I like to keep my opinions to myself with regards to which ones I think are front leaders. However, I think if you look at market cap size that’s usually how I like to base my recommendations.
Lelde Smits: Now Lynas Corporation is the largest rare earths stock on the ASX [Australian Securities Exchange], but licensing issues appear to have put maiden production behind schedule. So Tracy, do you think that Lynas will be able to secure the operating licence that it needs to start production?
Tracy Weslosky: Oh absolutely. I think Lynas is a very intriguing topic and I have to be honest with you, I’ve been a frontrunner in discussing my questioning of this anti processing facility movement that supposedly comes out of Malaysia. Having dealt with the Malaysian Government and Malaysian people over the last many years, the entrepreneur spirit there and their catalyst for bringing people around the world to open their companies there and to base them there, has always been very, very high. I’m very surprised by the negative PR that’s occurred; I’m suspicious of the sources behind it.
And you know, I do know from people I know from the Atomic Board to the Malaysian Government to people in Malaysia, who are top entrepreneurs that they would all like to see Lynas move as expeditiously as possible. And it’s my understanding that once they get the green light they’ll be able to produce very, very quickly.
Lelde Smits: But on a longer term basis, do you believe that we may still come up with licensing issues when the Malaysian opposition and other groups have voiced their opposition to the licence?
Tracy Weslosky: I don’t think that they really have any grounds to stand on. I think the defamation suit that’s currently against at least one media outlet and based on the hearings that have happened with the Malaysian Government, I can’t see them keeping this up much longer. Especially as we continue to increase the positive education out there on what they’re actually doing. You know, I see them gaining a lot of support with the Malaysian community and I don’t see this being an issue.
Lelde Smits: Now China is the major global producer of rare earths. So Tracy, how does this affect rare earth developers or investors?
Tracy Weslosky: How does it affect? Our entire industry is determined by the Chinese, that’s it that’s all. I mean the Chinese have been masters at taking a number of our critical minerals around the world and they have full control of it. Don’t get me wrong, I love doing business with the Chinese, but we would like to see the rest of the planet have our own self-sustainability with regards to these rare earths, for a number of reasons. So no-one wants one person to control anything at any time. I think right now the black market is an issue with the Chinese. I think their export quotas, I think their recent announcement that they don’t have as many rare earths as we originally thought they did, makes them a potential importer of rare earths in the future, which is exciting for the rest of the planet.
Lelde Smits: Tracy Weslosky, thank you so much for joining us and for your views.
Tracy Weslosky: Thank you.
Note: Lynas Corporation is a sponsor of RareMetalBlog, published by ProEdge Media Corporation.