RARE EARTH

 

According to the New York Times, China produces 95 percent of the world’s rare earth metals and half of its exports of the metals go to Japan, using them for hi tech manufacturing industries. From Dow Jones newswire, “Resource poor Japan earlier this year voiced alarm after its Companies said that China cut off rare earths supply amid a flare-up in a territorial dispute between Asia’s two largest economies.”   These minerals are needed for everything from ipods, glass, computers, batteries, smartphones, TV’s, etc.  Australia has some rare earth mining Companies on our radar. 

A quote of a US Energy Department last year states “Left unaddressed, the reality will severely hamper the United States’ ability to transition to a clean energy economy.” These investments are not personalized and recommended for everyone, but could be a good opportunity for the right investor.

 

Galaxy – (GXY.ASX)
Current Price  $1.39

Galaxy is an Australian mining and chemical Company focusing on lithium and tantalum production.
The Company has commenced a pre feasibility study into the value adding downstream production of lithium carbonate. The Company plans to establish a 17,000 tpa lithium carbonate plant in China due to lower associated capital and operating costs, as well as being close to the strategic growing battery markets in Asia. Lithium concentrate and lithium carbonate raw materials are forecast to be in short supply and face high future demand growth due to advances in long life batteries and sophisticated electronics in hybrid and electric vehicles, mobile phones and computers.   

GXY.ASX has signed an offtake agreement with Mitsubishi for a large proportion of its battery-grade lithium carbonate, which will be used in the Japanese vehicle giant’s electric cars and industrial machines.

 

Lynas Corporation - (LYC.ASX)
Current Price  $1.60

Lynas Corporation Ltd is an ASX listed Company, with the strategy to create a reliable, integrated source of Rare Earths from mine through to market, and to become the benchmark for the security of supply and environmental standards in the global Rare Earths industry.  The foundation of this strategy is Mount Weld in Western Australia, the richest known deposit of Rare Earths in the world, and a state-of-the-art Rare Earths processing plant, the Lynas Advanced Materials Plant, currently under construction near Kuantan in Pahang, Malaysia.  

Production is scheduled for third quarter of 2011.

*Data compiled from Iress software, LYC and GXY websites.

 

*Disclosure statement available free upon request