Should You Buy Ucore Rare Metals?
Rare earth element stocks have fallen off investors’ radars in the past couple of years. Prices of both the stocks and the elements have been falling significantly after spiking in 2009-2011. But with interest at a low level I think it is time for investors to consider rare earth element mining companies again.
For investors who aren’t familiar with them, rare earth elements (aka REEs) are comprised of the 15 lanthanides (a group of elements that have similar chemical properties) as well as yttrium and scandium. While most investors haven’t heard of elements such as cerium europium or gadolinium, these are extremely important elements found in both high-tech gadgets utilized by defense contractors and clean energy producers as well as in everyday objects such as cellphones and computers.
Rare earth element stockpiles and in-ground reserves are predominantly controlled by China, and given the rising demand for these elements, the United States and other Western governments are concerned that this monopoly can jeopardize national security and economic growth.
This is especially true for a small group of the REEs called the heavy REEs. These are especially rare, and they tend to have prices that are substantially higher than their counter-parts, the light REEs. The heavy REEs consist of dysprosium, terbium, europium, neodymium, and gadolinium. Yttrium is sometimes included in this group. These elements are so rare outside of China that there are no major mines that aren’t controlled by China that produce more than trace amounts of these elements. Therefore, projects that are in the exploration or development stages that will be producing these elements are extremely important.