They also are critical to the U.S. military, given their use in the manufacture of night vision goggles, precision-guided weapons, communications equipment and GPS equipment. China has about 37% of the world's reserves of rare earth metals, while Brazil is second at 18% and Russia is third at 15%. Meanwhile, the U.S. has only about 1%, per the same source.
Most mining investors would be familiar with the huge potential opportunities in rare earths — the group of 17 elements used in everything from smartphones to electric vehicles. But despite the broader narrative around future demand, investing in the space isn’t a simple exercise. For one thing, imbalances frequently occur as the complex global supply chain slowly takes shape.
If you’re seriously thinking about investing in rare earth stocks, this market tale is one you should keep in mind before pulling the trigger. While enticing at face value and a potential oasis for swing traders, the rare earth market is actually a very dangerous place to be for the unacquainted.
Conclusions clearly show that despite the complexity of rare earth mineral deposits and the fact that their mining operation usually includes different by-products, the evaluation of rare earth mining investments does not present much more difficulty than in the case of single element mining projects.
Forecasted prices used in these economic studies are the Achilles’ heel of nowadays rare earth mining investment analysis. Finally, although differences in demand of different rare earth elements will make really difficult to achieve “a priori” a market in balance, the five studied projects are anticipated to cover approximately the third part of the total rare earth consumption in the world.
When their dysprosium oxide production was analyzed, the resulting proportion for the most critical rare earth element based on its role in clean energy together with its biggest supply risk was almost the same, something optimistic regarding the achievement of a balanced market outside China.
