Investing in Rare Earth Metals

Rare Earth Metals are a family of 15 soft metals in the Lanthanoid series, as well as close cousins Scandium and Yttrium.

They are primarily used in technology applications.  They are the ‘special sauce’ used in tablets and mobile phones, computer hard drives, electric and hybrid vehicles, and flat-screen monitors and televisions.

They are also extensively used in the Defence sector in laser, radar, sonar and guidance systems.

Although by weight they don’t make up a significant part of each component, without them the component simply wouldn’t work. For example, the amount of rare-earths used in magnets for computer spindles is tiny by volume.  But without them the spindle would not spin and the computer would not work.

How rare are rare earth metals?

To correct the assumption, rare earth metals aren’t actually all that ‘rare’ – in fact they are quite widely distributed around the earth’s crust.  They are ‘rare’ in the odd etymological sense in that they are ‘hidden’ – namely they hide behind other metal and mineral deposits, so geologists have to play hide-and-seek when looking for them as they could well be concealed by a big chunk of iron or tungsten.  What makes them rare in the other sense of the word is that the metals, although numerous (Cerium for example is more abundant than Copper) they don’t show up very often in commercially exploitable quantities.

To date the most commercially-exploitable reserves of rare-earth minerals are found in China, and as they are so critical for the technology the West is increasingly relying upon them. The strategic importance of rare-earths has over the last decade sparked an exploration frenzy to find new non-China sources of rare-earths in parts of the world where China doesn’t have influence.