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Blog : Rare Earth Metals
September 2nd, 2009
You hear about Platinum and Palladium a lot, but you probably don't hear as much about Rare Earth Metals. They're extremely rare (as the name suggests), and have uses in iPods, Blackberrys, electric vehicles, and fuel cells.
They're also relatively new, in terms of their applications and utilizations. Those applications and utilizations will only grow going forward.
The supply, however, is very restricted. There are not yet a lot of good, high-yeilding deposits under production worldwide.
At to that, the largest producer China, is currently deciding upon their R.E.M. strategy, which potentially includes hoarding supply, and even banning exporting. If this protectionist strategy plays out, although it most likely will not, then prices will be under significant pressure.
Estimates put a supply to demand deficit at about 40,000 tons within 5 - 10 years. This will result in dramatic price growth for Rare Earth Metals, which will only be curtailed by the fact that it eventually becomes more expensive to create the products, chewing into profit margins and forcing price increases onto the consumer.
There are a few players in the R.E.M. space closer to home, some penny stocks, others are not: Molycorp Minerals is the largest in the U.S. Also see MAT, HUD, GWG, NEM, LYC, AVL, ARU, CCE, RES, and GGG.
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