You and I directly contribute to the prices of Rare Earth mining companies stocks, because of our dependency upon high tech products. You use products every day that require rare earth metals in their production, like cell phones, computers, DVD’s, rechargeable batteries, the catalytic converter on your car, fluorescent lights, and much more. These high tech products, and their demand have made the entire world heavily dependent on China, which produces over 90% of the low value Rare Earth Metals, and up to 99% of the high value Rare Earth Metals for world consumption.
There are published estimates on global production and consumption of rare earth metals showing that Asia alone could consume all of the world production for many of the Rare Earth Metals and Alloys as early as 2015, if there is no new production before then. As a result, the potential of China becoming the dominant player, and the United States becoming dependent upon China for Rare Earth Metals, proposes a serious strategic concern for the United States, in a similar way that our relationship with OPEC did, forty years ago.
Since there are currently no active Rare Earth Metal mines in the United States or North America, obviously the current state of affairs has become a cause for concern. There are
currently only two permitted world class Rare Earth Metal mines in the United States. Consequently, in the event that if Rare Earth Metals mining were to occur in the United States, the mined Rare Earth Metals would be sold to overseas refineries for further elemental or alloy processing. As the price of a modern Rare Earth Metals refinery is estimated at $1 billion, the willingness to enter this market has been limited and reluctant.
These circumstances will cause China’s Rare Earth mining companies stocks to skyrocket. From 1990 to 2000 China’s production of Rare Earth Metals rose by 450%. Production increased to 73,000 metric tons, and during the same period production from other countries plummeted 60%, to about 16,000 metric tons. As a result, global production increased slightly more than 150% from 1990 to 2000. Both the world’s growing demand for Rare Earth Metals and China’s burgeoning dominance in their production is clearly found during this decade.
By 2009, world production increased 45%, and Chinese production increased 77% to 129,000 metric tons. Production from other countries decreased to about 3,000 metric tons in 2009. In other words, over the span of twenty years, China has gone from being the dominant player to the only game in town. In the second half of 2010, China sharply cut exports by 72% causing a global price spike of over 500%.
These developments suggest that China’s Rare Earth Element stocks will skyrocket during the next few years. So now is the time to investigate the best Rare Earth stocks. In the second half of 2010, China sharply cut exports by 72% causing a global price spike of over 500%, that is why savvy investors are learning how to buy Rare Earth Metals.