Rare earth element ETFs are just beginning to emerge as potential bread-winners, and the market is turning towards a rise due to strong demand and high price. That could mean major profits for both the developed companies and their ETF holders. The bubble has yet to pop, and the time to learn more about the companies, extraction process, and rare earth elements themselves is now.
Absolute Wealth has addressed the need for information and investment advice by publishing the Special Report “Rare Earth Riches: How to Cash In On China’s ‘Dirty’ Secret.” It was developed using experts in areas like foreign commodities and consumer demand, and presented as a go-to guide for learning as much as possible about rare earths.
China, who has dominated the rare earth production game for a long stretch, decided it would be smart to limit exports and assure companies within its own borders would have access to the abundance of rare earths churned out of Chinese mines. Whether or not that is the true reason, and even if China has ulterior motives, the rest of the world saw an increase in price and a drop in supply. That has caused a global race to be the next big rare earth producer, and companies from the U.S. to Brazil to Japan are hurrying to get into the mix.
That’s why investing in rare earths and the companies that are implementing production procedures to get at them are creating so much opportunity. It’s like the Oil Embargo, only this time it’s rare earths, not barrels of the crude stuff.
Unlike gold or silver, rare earth elements, or REEs, are less valuable in raw form. Gold bullion is worth a lot, but the value of rare earths is in their uses, which range from products like cell phones, satellites, and missile guidance systems. Though they aren’t exactly rare (though the name clearly implies scarcity), it’s the extraction and production process that makes them hard to come by.
Jon Hykawy is head of global research and a clean energies analyst at Byron Capital Markets, and was interviewed by the International Business Times earlier this week. His outlook on rare earths is decidedly confident.
“The industry is just beginning to develop,” said Hykawy, “whereas a lot of the financial community is looking at it as a popped bubble. That's not the case. The financial community is going to have to revisit REEs down the line, when some of the companies start to produce really meaningful cash flows from their operations.”