Sunday November 23rd 2014

Investing In Rare Earth Metals

Investing In Rare Earth MetalsThere is a lot of noise at the moment surrounding investing in rare earth metals. Rare earth metals consist of around 17 elements that are used to make up various parts within a range of hi-tech gadgets.

In fact the name ‘rare earth metals” is slightly misleading, as what it really means is that they rarely exist in pure form.

Instead, they mix with other minerals underground, making them costly and environmentally damaging to extract for use.

These Rare earth metals and elements are also used in some manufacturing processes for batteries mobiles phones, wind turbines and many more applications from emerging industries.

Other examples of their use include; tablets, night vision goggles, jet engines, GPS, fiber optics and missiles. With our thirst for the latest high tech gadgets and green technologies growth is strong and the search for new areas to mine them is increasing.

Currently, it’s estimated that China produces nearly 95% of the world’s rare earth metals & elements and have warned that it’s rare earth reserves are declining and is seeking to impose export quotas on these metals. China want to stop excessive mining of the rare earth metals, which can cause environmental damage during the mining process. These very valuable metals represent a large part how we live our lives and could be due for a price surge in the coming years.

Honda recently announced that they will start recycling rare earth metals and other key materials in hybrid auto batteries in 2012, which will go some way to reducing pollution and global warming.

Toyota are going down a different route and trying to develop neodymium-free electric motors instead, which are called rugged alternating-current induction motors. These will negate the use of rare earth metals inside its ‘green’ cars.

Where To Start Investing In Rare Earth Metals

Cerium and Lanthanum are the two most abundant rare earth elements in every ore body known and as such are possibly the most likely to fall in price supply increases. The 3rd most abundant metal is Neodymium which is used in rare earth magnets and has a growing demand and high value in the market place.The benefits investing in rare earth metals include:

World economic growth is one of the biggest factors in the valuation of rare earth metal production. Rare earth demand grow stronger as world economic growth returns.  Investing In Rare Earth Metals can be volatile because each element has unique markets, but they are all tied to the world economic health, which is not currently very good. Global demand is expected to increase by 8-12% every year which should increasing the gap between supply and demand. Our other silver metal investing article may also interest you.

 

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