Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
A Lesson About Gold – How Bullish Can It Be? - 24th Jan 20
Stock Market January 2018 Repeats in 2020 – Yikes! - 24th Jan 20
Gold Report from the Two Besieged Cities - 24th Jan 20
Stock Market Elliott Waves Trend Forecast 2020 - Video - 24th Jan 20
AMD Multi-cores vs INTEL Turbo Cores - Best Gaming CPUs 2020 - 3900x, 3950x, 9900K, or 9900KS - 24th Jan 20
Choosing the Best Garage Floor Containment Mats - 23rd Jan 20
Understanding the Benefits of Cannabis Tea - 23rd Jan 20
The Next Catalyst for Gold - 23rd Jan 20
5 Cyber-security considerations for 2020 - 23rd Jan 20
Car insurance: what the latest modifications could mean for your premiums - 23rd Jan 20
Junior Gold Mining Stocks Setting Up For Another Rally - 22nd Jan 20
Debt the Only 'Bubble' That Counts, Buy Gold and Silver! - 22nd Jan 20
AMAZON (AMZN) - Primary AI Tech Stock Investing 2020 and Beyond - Video - 21st Jan 20
What Do Fresh U.S. Economic Reports Imply for Gold? - 21st Jan 20
Corporate Earnings Setup Rally To Stock Market Peak - 21st Jan 20
Gold Price Trend Forecast 2020 - Part1 - 21st Jan 20
How to Write a Good Finance College Essay  - 21st Jan 20
Risks to Global Economy is Balanced: Stock Market upside limited short term - 20th Jan 20
How Digital Technology is Changing the Sports Betting Industry - 20th Jan 20
Is CEOs Reputation Management Essential? All You Must Know - 20th Jan 20
APPLE (AAPL) AI Tech Stocks Investing 2020 - 20th Jan 20
FOMO or FOPA or Au? - 20th Jan 20
Stock Market SP500 Kitchin Cycle Review - 20th Jan 20
Why Intel i7-4790k Devils Canyon CPU is STILL GOOD in 2020! - 20th Jan 20
Stock Market Final Thrust Review - 19th Jan 20
Gold Trade Usage & Price Effect - 19th Jan 20
Stock Market Trend Forecast 2020 - Trend Analysis - Video - 19th Jan 20
Stock Trade-of-the-Week: Dorchester Minerals (DMLP) - 19th Jan 20
INTEL (INTC) Stock Investing in AI Machine Intelligence Mega-trend 2020 and Beyond - 18th Jan 20
Gold Stocks Wavering - 18th Jan 20
Best Amazon iPhone Case Fits 6s, 7, 8 by Toovren Review - 18th Jan 20
1. GOOGLE (Alphabet) - Primary AI Tech Stock For Investing 2020 - 17th Jan 20
ERY Energy Bear Continues Basing Setup – Breakout Expected Near January 24th - 17th Jan 20
What Expiring Stock and Commodity Market Bubbles Look Like - 17th Jan 20
Platinum Breaks $1000 On Big Rally - What's Next Forecast - 17th Jan 20
Precious Metals Set to Keep Powering Ahead - 17th Jan 20
Stock Market and the US Presidential Election Cycle  - 16th Jan 20
Shifting Undercurrents In The US Stock Market - 16th Jan 20
America 2020 – YEAR OF LIVING DANGEROUSLY (PART TWO) - 16th Jan 20
Yes, China Is a Currency Manipulator – And the U.S. Banking System Is a Metals Manipulator - 16th Jan 20
MICROSOFT Stock Investing in AI Machine Intelligence Mega-trend 2020 and Beyond - 15th Jan 20
Silver Traders Big Trend Analysis – Part II - 15th Jan 20
Silver Short-Term Pullback Before Acceleration Higher - 15th Jan 20
Gold Overall Outlook Is 'Strongly Bullish' - 15th Jan 20
AMD is Killing Intel - Best CPU's For 2020! Ryzen 3900x, 3950x, 3960x Budget, to High End Systems - 15th Jan 20
The Importance Of Keeping Invoices Up To Date - 15th Jan 20
Stock Market Elliott Wave Analysis 2020 - 14th Jan 20
Walmart Has Made a Genius Move to Beat Amazon - 14th Jan 20
Deep State 2020 – A Year Of Living Dangerously! - 14th Jan 20
The End of College Is Near - 14th Jan 20
AI Stocks Investing 2020 to Profit from the Machine Intelligence Mega-trend - Video - 14th Jan 20
Stock Market Final Thrust - 14th Jan 20
British Pound GBP Trend Forecast Review - 13th Jan 20
Trumpism Stock Market and the crisis in American social equality - 13th Jan 20
Silver Investors Big Trend Analysis for – Part I - 13th Jan 20
Craig Hemke Gold & Silver 2020 Prediction, Slams Biased Gold Naysayers - 13th Jan 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

No Easy Substitutes for Rare Earth Metals

Commodities / Metals & Mining Nov 02, 2011 - 05:13 AM GMT

By: Critical_Metals_Repo

Commodities

Best Financial Markets Analysis ArticleLight, strong rare earth elements (REEs) revolutionized the digital era and changed the face of our everyday lives. Even as shortages loom and companies scramble to find low-cost solutions, these critical materials cannot be easily replaced, nor can opportunities in this sector be dismissed. In this special for The Critical Metals Report, Gold Stock Trades Editor Jeb Handwerger calls attention to mainstream media's shortcomings in its REE sector coverage and profiles one company already making headlines.


Sophisticated readers are well aware of the media's tendency to twist the news to fit the fashions of the day. Many members of the press earn their daily bread by manipulating the news with sensational headlines sure to grab readers, but unlikely to thoroughly inform the public on an admittedly complex issue. Bloomberg's recent article by Sonja Elmquist, "Rare Earths Fall as Toyota Uses Alternatives," is characteristically misleading.

jeb handwerger

First of all, this reporter fails to differentiate between the light and the heavy rare earths. They are lumped together in a misleading compote. Truth be told, if you open the hood of a Toyota car or truck, about 50 points use dysprosium as a prominent role and it would be next to impossible to economically and effectively replace the size and weight of the car itself. In an age where fuel efficiency—and thus automotive body weight—is of vital consideration, substitution for heavy rare earths is close to impossible, and would likely result in an automobile more like a 1970 Buick, a car that was popular when gas was $0.50 a gallon and chrome was as thick as rush-hour traffic.

jeb handwerger

 

A bulky, heavy vehicle such as this would fare very poorly in today's efficiency-conscious auto market. Light rare earth elements are commodity driven, and heavy rare earths are largely unique and thus inimitable. The automobile manufacturers depend on heavy rare earths, and the cost of replacement is prohibitive. However, the Japanese must maintain a straight face in this global poker game and fake that they don't need any of the rare earths.

But Japan's latest bluff is just one round in a tournament that has been unfolding for decades. China recognized the emerging importance of the rare earth sector as early as the 1980s, aware even then that need for rare earths would grow along with devices that would change the face of modern industry. Decades ago, both Steve Jobs and the Chinese were able to foresee taking the computers from a large room and miniaturizing them for everyday utilization within the palm of the hand. These smart devices envisioned by the early pioneers such as Jobs would only have existed in the fertile brains of a handful of scientists in the absence of rare earths, which made compact technology and its mass production possible. What once were huge, block-long computers in the hands of a few corporations are now carried in the pockets and purses of the average individual.

Even today, the role played by rare earths in these iPhones and iPads is only beginning to be understood. Sophisticated readers of my newsletter are well aware of the myriad uses of rare earths, without which new concepts from solar panels to wind turbines to portable nuclear reactors to hybrid autos could not have come into being.

Considering the vast and continuing influence these resources exercise on modern life the world over, investors should take a recent Wall Street Journal headline, "Rare Earth High Fliers Find Lower Orbit: Now Prices are Under Pressure," with a grain of dysprosium. A daily headline cannot begin to encapsulate the complexity of the rare earth universe.

The real issue at hand in REE-dependent industries is supply shortages. While alternatives cannot be found for all uses, it is necessary for companies to evaluate their needs and the resulting costs. Because not all rare earths are created equal, it is now necessary to consider the idiosyncratic qualities these different metals carry, and what purpose each serves. Both heavy and light rare earth elements have specific uses, and companies' ability to find alternatives must be determined on a case-by-case basis.

It is difficult to not get caught up with the daily fluctuations of the marketplace. But we must continue to explore the development of rare earths and resist being seduced by alarming media buzz that tends to confuse, misdirect and obfuscate. As investors, we are looking for geometric profits in reward for our patience. Quibblers and naysayers hungry for their 15 minutes of fame will nitpick details in the daily newspapers that next week will be used to wrap fish. To them, we say good luck, but you are missing one of the most exciting sector developments of our time.

For those convinced of the revolutionary power rare earth elements offer, there are many opportunities on the horizon for this sector in flux, some of which do end up making mainstream news. A few days ago, Ucore Rare Metals Inc. (UCU:TSX.V; UURAF:OTCQX) impressed the rare earth sector with a highly favorable metallurgical report. Indeed, the company was informed by Hazen Labs that it could separate 85%–90% of the rare earths from the ore. Immediately, other players in the sector issued competitive announcements. However, Ucore maintains sole possession of the most advanced heavy rare earth deposit on United States land. They have already identified an NI 43-101 resource on American territory and not left it to vague hyperbole. Ucore is rapidly advancing with its Preliminary Economic Assessment. Recently, Ucore was mentioned on CNBC as being an attractive takeover candidate for Molycorp Minerals (MCP:NYSE), Lynas Corp. (LYC:ASX) or Great Western Minerals Group Ltd. (GWG:TSX.V; GWMGF:OTCQX). Ucore was also featured in a Businessweek feature article by Daniel Grushkin entitled, "Alaska's Billion Dollar Mine." Little Ucore is at long last hitting mainstream media. We have been singing this particular song for a long time.

Meanwhile, it remains to be seen whether sector giant Molycorp can specify the quality and quantity of the actual heavy rare earths they are going to produce. Molycorp or Lynas might be well advised to acquire a heavy rare earth asset at these low valuation levels in order to present a complete catalogue of rare earths to the investment world. We will all have to watch the headlines to find out.

Gold Stock Trades Editor Jeb Handwerger is a highly sought-after stock analyst who is syndicated internationally and known throughout the financial industry for his accurate and timely analysis of the equities markets—particularly the precious metals sector.

Want to read more exclusive Critical Metals Report articles like this? Sign up for our free e-newsletter, and you'll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators and learn more about critical metals companies, visit our Critical Metals Report page.

DISCLOSURE:
1) The following companies mentioned in the interview are sponsors of The Critical Metals Report: Ucore Rare Metals Inc.
2) Jeb Handwerger: I personally and/or my family own shares of the following companies mentioned in this interview: Ucore Rare Metals Inc.

Streetwise - The Gold Report is Copyright © 2011 by Streetwise Reports LLC. All rights are reserved. Streetwise Reports LLC hereby grants an unrestricted license to use or disseminate this copyrighted material (i) only in whole (and always including this disclaimer), but (ii) never in part.

The Gold Report does not render general or specific investment advice and does not endorse or recommend the business, products, services or securities of any industry or company mentioned in this report.

From time to time, Streetwise Reports LLC and its  directors, officers, employees or members of their families, as well as persons interviewed for articles on the site, may have a long or short position in securities mentioned and may make purchases and/or sales of those securities in the open market or otherwise.

Streetwise Reports LLC does not guarantee the accuracy or thoroughness of the information reported.

Streetwise Reports LLC receives a fee from companies that are listed on the home page in the In This Issue section. Their sponsor pages may be considered advertising for the purposes of 18 U.S.C. 1734.

Participating companies provide the logos used in The Gold Report. These logos are trademarks and are the property of the individual companies.

101 Second St., Suite 110
Petaluma, CA 94952

Tel.: (707) 981-8999
Fax: (707) 981-8998
Email: jluther@streetwisereports.com


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules