Rare earths in the spotlight

by David Taylor

There seems to be a growing chorus of investors talking up the rare earth minerals market. It's a bit of a political hot potato at present because supply of rare earths is currently being controlled by China.

Rare earths, like other resources, are pulled out of the ground. They can be found in anything from mobile phones to light globes. Assuming a company has an economically viable way of extracting rare earths, there is money to be made.

Speaking of companies, Lynas Corporation looks to be the Australian pioneer in this area. It's set to start ramp up its distribution to Japan later this year. In fact Lynas has already signed a supply agreement with Sojitz Corp to provide around 8500 tonnes a year of rare earths for the Japanese market.

Known as 'industrial vitamins', rare earths are going to become more and more popular. This isn't just because they are used in modern technologies, they are also vital components in green technologies such as electric cars, solar panels and wind turbines.

Watch this space carefully because geo-political concerns are likely to see China supporting less and less of the market. The world simply won't allow China to keep controlling the market (up to 95 per cent of the world's supply) - there's too much at stake - both from a political and an economic perspective.

David Taylor


The content in my blog is non advisory, please do not interpret this as advice in any way shape or form. These are just my thoughts and nothing I say should be acted upon.

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