Increasing the supply of oil may be pushing down the demand for rare earths, uranium and lithium only short term. This decline in oil prices should not drastically hurt the development of rare earth assets outside China.
The Mercenary Geologist sees an Americas-centric rare earth elements-processing cartel forming to create a supply chain independent of China and points to the top companies that could be big players in the next five years.
The opportunities in the junior REE sector are significant. But the junior population is quite large - there are literally hundreds of stocks to choose from that want your dollars. There is also a steep learning curve and there are serious risks.
The only way that the industrial-policy-free and resource-underdeveloped West can maintain its industrial plant that requires rare earths, is to develop the entire rare-earth supply chain outside of China.
Just what are critical metals? They are sometimes referred to as "strategic" or "technology" metals, but clear definitions for these terms often prove elusive and routinely depend on to whom you're talking.
In 1970, the plant started production of rare earth and specialty metals products and uranium processing ceased in 1990 concurrent with the fall of the USSR. In 1997, the formerly state-owned plant was privatized.
The latest Chinese data indicates that rare earth exports are continuing to drop by more than half compared to last year's output. In April, China exported only 1,819 tons of rare earths, a shortfall of 53% from the previous year.
As an investor, knowing REEs as "tech metals" will get you by. But if one truly wishes to be successful in leveraging the newly-illuminated bull market in these exotic commodities, a deeper understanding of REEs is imperative.
Interest in rare earths is starting to heat up once again, and it is something you should keep on your radar. China's Baotou Steel has announced its intention to start up the world's first rare earths exchange.