The practical uses of rare earth elements and their growing need make them a great area for investment. REEs enable an assortment of technologies ranging from lightbulbs, to computers and tablet devices, cellular mobiles, electric cars, and even military devices such as precision guided weapons.
In addition to the accelerated demand of these technologies, the concern involving crude oil and the theory behind Peak Oil further pushes the interest in rare earth metals.
Peak Oil theory is the notion that the rate in production of petroleum will rapidly decrease, after reaching the point for the maximum rate of international extraction of easily accessible sources. The expected result of Peak Oil is the rise in gas prices, which is something already come to fruition.
The International Energy Agency (IEA) evaluated 800 major oil fields worldwide, inclusive of about 75 percent of global reserves. The findings stated that the majority of the larger fields have already reached their climax, while the remaining fields have experienced a decline in production rates of about 6.7 percent a year. This could result in efforts to ration oil, equalling more control for major producing, and exporting, countries.
The IEA estimates that the global "peak” in production will be met in approximately ten years, as opposed to the original estimate of twenty years. Considering the global economy is one heavily dependent on oil, this trend reported by IEA illustrates the need to discover a different source.
While all this seems quite daunting, the trend towards green energy technologies provides some relief.
The issues concerning oil, and the turn towards green energy technologies have put rare earth elements in high demand, making them opportune for investment.
REEs are comprised of fifteen to seventeen chemical elements, the majority making up the lanthanide category of elements. Among other technologies, rare earths significantly contribute to advancements regarding green energy.
For instance, the motor and generator of a hybrid car require the rare earth elements:
Furthermore, a hybrid's catalytic converter uses the elements:
These are just a few of the many purposes rare earths fulfill in hybrid automobiles.
Presently, China dominates around 95 percent of the world's supply of REEs, while also behaving as a considerable net-importer. As China crawls up the global hierarchy in green technology advancements, the country proposes to end all rare earth exports within the near future to preserve the resources for domestic use.
With this news, other countries and mining companies outside of China have discovered deposits rich in REE concentrations. For example, Canada, the United States, and Australia, along with REE mining companies like Quest Uranium Corp., Molycorp Inc., and Lynas Corp., have all demonstrated notable competence in producing sufficient supplies of rare earth metals in the long-term.
The movement towards green energy technologies, and the evidence of the Peak Oil theory further supports the amounting demand of rare earth metals. Moreover, emerging deposits outside of China promise great success for mining companies also outside of China. All these factors culminate to assign rare earth elements as an investment sector to monitor.