Investing In Rare Earth Elements – More information > The basics of precious metals – a comprehensive introduction to the basics > Rare earths as an investment product
A group of 17 elements are called rare earths and are therefore included in the periodic table of elements. However, this term is misleading because many of these pure substances are more common in the earth’s crust, such as gold or platinum. These raw materials are mainly used in industry and are in high demand there.
Investing In Rare Earth Elements
Rare earth metals – also known as rare earth oxides (REO) – have been known in Europe since the 18th century. It was at this time that the term “rare earths” was coined because their discoverers assumed that their occurrence was somewhat limited. In addition, they are oxidized from minerals, which is why they used the term “earth”, the older name for oxides.
Could Africa Replace China As The World’s Source Of Rare Earth Elements?
Rare earth metals are relatively soft, silver-colored metals. And like silver and other white metals, they tarnish quickly when exposed to air. They offer strong electropositivity and low conductivity, and some of these metals have special functions. For example, gadolinium sticks to magnets in a similar way to iron, and lanthanum has a higher conductivity.
Rare earths always occur together, never separately, and usually occur as groups of similar elements in combinations. For this reason, these 17 earth elements can roughly be divided into two subgroups: cerite earths (atomic numbers 58-64) and ytter earths (atomic numbers 65-71). A distinction can also be made between light and heavy rare earth metals.
On average, the light rare earth elements lanthanum (57), cerium (58), praseodymium (59), and neodymium (60) make up more than 95 percent of the rare earths. The others occur in significantly smaller proportions and the heavy rare earth metals include scandium (21), yttrium (39), promethium (61), samarium (62), europium (63), gadolinium (64), terbium (65). . ), dysprosium (66), holmium (67), erbium (68), thulium (69), ytterbium (70) and lutetium (71). With the exception of scandium and yttrium, all earth elements follow lanthanum in the periodic table of metals, which is why they are called lanthanides or lanthanoids.
Rare earths do not occur as pure metals or oxides, but must be extracted from minerals. They occur as complex materials, especially in the minerals basztnäsite, monazite and xenotime. It occurs primarily in Australia, Brazil, China, India, Madagascar, Myanmar, Russia, Thailand, the USA and Vietnam. More than half of the world’s production comes from the Bayan Obo mining area in China’s Inner Mongolia. Other mines important to the global market include Mountain Pass in California, USA and Mount Weld in Western Australia.
Why Rare Earth Metals Are A Good Buy For Investors
According to Statista*, approximately 240,000 tons of REO were mined worldwide in 2020. Of this, 140,000 tons came from China and 38,000 tons from the United States. Significant amounts were also mined from Myanmar (30,000) and Australia (17,000). This creates further dependence of European industry on China as an important trading partner.
Rare earth metals are usually processed directly in mines and qualified refineries. Because these individual metal elements are extremely similar and can often only be distinguished by their weight, the separation process is particularly complicated. The pure proportion of rare earth metals extracted from the original ore is between 30 and 60 percent, depending on the mineral classification. In addition, the processing technology must be subject to strict environmental regulations, as the rocks contain low concentrations of the radioactive element thorium (90) and other toxic substances.
Rare metal oxides are needed in many industries and are mainly used where strong permanent magnets are required. The main areas of application are wind turbines, electric vehicles and magnetic resonance tomographs. But these chemical elements are widely used in media technology products such as headphones, speakers and plasma screens, as well as notebooks, smartphones and LED daytime running lights.
Experts speculate that the future belongs to terbium, dysprosium, neodymium and so on. High-tech applications such as the 5G mobile communication standard or modern X-ray technology would no longer be possible without rare earth metals. In addition, the use of renewable energy cannot be realized without the use of high-performance raw materials. Therefore, the demand for these elements is expected to continue to increase in the coming decades.
Us Companies Move To Break China’s Dominance Of Rare Earth Industry
The four rare earths dysprosium, neodymium, praseodymium and terbium are of fundamental importance to industry and are therefore used worldwide. Due to the high global demand, these strategic metals are also important investment products, especially due to the high value density of isolated oxides. Like gold or silver, they never lose their value and can be processed into new products at any time. Cast as ingots or in powder form, these rare earth oxides are ideal for storage and can be further processed in almost any industry.
Investing in mining company shares is now commonplace. In addition, investors in the rare earth metals market can also acquire special equity funds and index certificates. Direct investment in physical oxides through metal dealers has also become an increasingly viable option. Trading companies offer containers with different denominations, for example, in sizes of one or ten kilograms. Although these are primarily sold to industry, they are also purchased by private investors.
Buying rare earths is another form of investment, and these properties can offer some advantages over buying stocks or other precious metals. Rare earth oxides are not often traded on the stock exchange, so their price depends primarily on the forces of supply and demand in the spot market.
Although rare earth metals have not yet become mainstream investment products, a new asset class may emerge, and the price trends of recent years seem to confirm this view. Unlike gold and silver, however, due to the lack of market data, there is no overview of the price of rare earth metals. Therefore, price trends can only be shown as a percentage together with approximate evaluations. The actual prices always depend on the size of the purchase and the current demand. Therefore, when selling rare earth metals, it may not be possible to find a buyer, especially when selling a large amount. Investors should take this into account when making investment decisions.
Ionic Rare Earths (ixr)
As with any high-value-density material asset, rare earths are recommended to be properly stored and insured as an investment product. In Switzerland, this can also be done outside the banking system, for example with the Swiss Gold Safe warehouse. Here, investors can set up a separate storage for their rare earth metals. This means that investors can always get back exactly the products they originally had in stock. This is particularly important in the case of rare earth metals, where owners must ensure the high quality demanded by industrial users.
In addition, Swiss Gold Safe offers bonded warehouse storage of rare earth metals. This allows investors to buy, sell and store their holdings tax-free – regardless of the holding period. Higher rare earth mineral prices and strategic support from the United States and other governments have spurred additional investment, production, and international trade, diversifying the supply of minerals essential for high-tech production.
Rare earths, such as dysprosium, lanthanum, and cerium, are 17 elements used as special components in magnets, batteries, and catalysts.
These elements, sometimes called REEs, are abundant in the Earth’s crust. According to the United States Geological Survey, in 2018 there were 3,114 known deposits in 107 different countries.
Rare Earths Market Update: H1 2022 In Review
Although the deposits are abundant, there are no minerals in which the rare earths are present in high concentrations. Unlike easily mined elements like copper and zinc, rare earth minerals are expensive and complicated to extract. The by-products can be toxic and even radioactive. This means that mines are often idle until prices rise or governments provide subsidies and justify investment in mineral extraction.
Considered the world’s rare earth oxide, sometimes referred to as REO, China is a leader in the separation, alloying and manufacturing of metals. It processes domestic minerals and imports minerals and concentrates mainly from the United States and Myanmar.
Our chart below shows a significant increase in US concentrate exports to China starting in 2017, when California’s Mountain Pass mine, the main US source, restarted and sent shipments of concentrate to China for further processing.
In the long term, the United States must build domestic REO separation, alloy and metal production capacity rather than relying on imported sources.
Five Steps For Solving The Rare Earth Metals Shortage
MP Materials, Lynas and Energy Fuels have started investments in the United States. Over the next decade, their investments will lead to more stable prices and reduced supply chain vulnerabilities.