Rare Earth Elements: Fund recommendations?

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  • Tue, Oct 19, 2010 - 08:28pm

    #1
    bcc87

    bcc87

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    Rare Earth Elements: Fund recommendations?

I’ve been following this industry and some individual stocks have began to explose in the Rare Earth element industry with growing concerns regarding China cutting back exports to US etc. I don’t have the time or stomach for individual stocks, but curious if anybody on site follows this industry and has any fund recommendations?

  • Tue, Oct 19, 2010 - 10:41pm

    #2
    Peak Prosperity Admin

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    Re: Rare Earth Elements: Fund recommendations?

I’m interested in the individual stocks as well if anyone has info.  This looks like a promising but risky area to invest in.  Travlin 

  • Wed, Oct 20, 2010 - 01:57am

    #3
    Peak Prosperity Admin

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    Re: Rare Earth Elements: Fund recommendations?

Here’s a REE fund.  I would tread carefully in this area though.  It’s liable to become the new corn ethanol investment area.  The retail investors will be taken to the cleaners.  Also, if you’re in the US, you won’t be able to invest directly in it. 

http://www.ree-fund.com/index.php?navanchor=2110000

Here are some approximate alternatives:

http://seekingalpha.com/article/228484-rare-earth-metal-etf-substitutes

  • Wed, Oct 20, 2010 - 03:43am

    #4
    Peak Prosperity Admin

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    Re: Rare Earth Elements: Fund recommendations?

Maybe you can find some fund related info here:

Lithium Investing News

Or maybe its just snake-oil…..Jeff

  • Wed, Oct 20, 2010 - 07:36am

    #5
    Peak Prosperity Admin

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    Re: Rare Earth Elements: Fund recommendations?

check out this company. If China is indicating that they will cut back exports of REEs, wouldn’t a company like this have upside?

http://www.marketwatch.com/story/dacha-acquires-rare-earth-operating-license-in-china-2010-10-15?reflink=MW_news_stmp

  • Wed, Oct 20, 2010 - 05:29pm

    #6
    Peak Prosperity Admin

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    Re: Rare Earth Elements: Fund recommendations?

I looked into this six months ago and found that MolyCorp was reopening the Mountain Pass Mine in California and that the Canadian Junior, Avalon Rare Metals, has discovered a huge deposit in the North West Terriories that has restricted access. It seemed to me that significant North American production was several years away. I decided that any stock was at that time too speculative and too far from being profitably for my taste when there were other opportunities. I decided that it might be worth investing in an ETF from a reliable provider if and when one was floated. That has not yet happened.

This area was reviewed a couple of weeks ago. http://www.proactiveinvestors.com/companies/news/9051/eleven-rare-earth-companies-to-watch-including-molycorp-lynas-greenland-minerals-avalon-arafura-and-more-9051.html

Lithium is the lightest metal known (atomic number 3) hence its value for mobile battery applications and while in great demand is not one of the rare earths (atomic numbers 57-71). The world’s largest known lithium reserve lies in a brine lake in Bolivia which has the lowest production cost. Most other lithium producers are from more expensive hard rock although dried lake deposits are being investigated and could produce a significant, large, low cost deposit.

  • Wed, Oct 20, 2010 - 07:41pm

    #7
    Peak Prosperity Admin

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    Re: Rare Earth Elements: Fund recommendations?

So at this point, there are no ETF funds of rare earth metals?

  • Wed, Oct 20, 2010 - 09:50pm

    #8
    Peak Prosperity Admin

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    Re: Rare Earth Elements: Fund recommendations?

The tricky part here is that the “rare earths” (REs) are not all that rare.  They happen to exist in decent quantities all over the place.  While someone could easily start a fund that promises to invest in producers of REs the real value lies elsewhere.

The real trick is getting the REs separated from each other, and then combined into their alloyed forms that have the most use (think of the difference between an unseparated RE slurry and a pure neodymium magnet ready for use in a Prius and you’ve got the idea).

The analogy here is that you’ve just discovered that corn chips are really, really essential and valued by bar patrons everywhere and therefore decide to get financially exposed to corn production.  The issue is that the corn itself represents only 3% of the input value to the final retail cost of a bag of corn chips.  The major value proposition lies elsewhere.  

The problem here is that I cannot find any way to gain pure exposure to the better parts of the RE value chain.  Still looking…any and all ideas welcome, of course.

  • Thu, Oct 21, 2010 - 06:37pm

    #9
    Peak Prosperity Admin

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    Re: Rare Earth Elements: Fund recommendations?

A stock Steven Leeb has been recommending for a year or more is Lynas Corp LTD (symbol is LYSCF). It is up 170% since I purchased it. He still feels it has plenty of room to grow.

Real World Investing issued a Buy Lynas Corp. (LYSCF, LYC.AU), an exciting speculation on rare earth elements. 
 
This small ($240 market cap) Australian mining company is in possession of one of the world’s largest deposits of rare earth elements, a group of minerals used in a wide array of both low- and high-tech applications. China dominates the market with a 90-percent share and they recently make a substantial investment in Lynas. And with good reason: Worldwide demand for these vital elements should soon outstrip supply, causing prices to soar.

Lynas’ stock is traded in Australia under the symbol LYC and here in the U.S. on the “pink sheets” under the symbol LYSCF. For more details on Lynas, head over to the Leeb’s Real World website, where we’ve just posted the latest issue.

  • Thu, Oct 21, 2010 - 11:05pm

    #10
    Peak Prosperity Admin

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    Re: Rare Earth Elements: Fund recommendations?

[quote=Waterboy]

A stock Steven Leeb has been recommending for a year or more is Lynas Corp LTD (symbol is LYSCF). It is up 170% since I purchased it. He still feels it has plenty of room to grow.

[/quote]

With all due respect, after Stephen Leeb sung the praises of Enron (just before it tanked), I lost all respect for him.

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