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Investing in Rare Earth Metals

The Saudi Arabia of the Arctic Holds the Key to these "Dragon Metals"

By
Wednesday, November 4th, 2009

Editor's Note: Rare Earth Metals (REEs) are nothing short of crucial to the way we live. In fact without them, some of our most important modern technologies could never exist: rechargeable batteries, electric motors, photo optics, and solar cells, just to name a few.

They are so pivotal to modern circuitry that industry insiders came up with a nickname for REEs: 'technology metals.' And on January 1st, Denmark will relinquish its sovereign hold over Greenland's mineral rights, making Greenland's $273 billion rare earth resources private property. To learn about the single company in control of all of it, read the following new report.

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Today, the heads of Toyota, Honda, and the Pentagon all share a common interest.

It's a small chunk of land, about one-third the size of Rhode Island, located in a part of the world most people know nothing about.

But they're not the only ones watching. Venture capitalists, hedge fund managers, and resource companies from all over the globe are also watching and waiting. . . ready to pour billions into Greenland once they get the green light.

Why?

This coming January, when the Kingdom of Denmark relinquishes sovereign control over Greenland's natural resources, the world's biggest deposit of Rare Earth Metals (or REEs), will fall into private hands. . . for the first time ever.

20091104_Rareearthoxides.jpg

This single site boasts deposits valued at an estimated $1.3 trillion. . . and yet, REEs are worth more than just money.

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Which is why the world's leading manufacturers of hybrid cars, wind turbines, batteries, and yes — even the guidance systems to our most sophisticated air and ground defense missiles systems, are watching the events in Greenland unfold with baited breath.

The elements that fall into the category of Rare Earths include:

  • Lanthanum - essential in the production of electric car batteries;
  • Terbium - without this element, high-strength magnets would not exist;
  • Erbium - makes possible a wide range of light-weight, high-strength metal alloys;
  • Thulium - makes high-frequency lasers a reality.

And once Greenland takes control of its mineral wealth, this land — totaling barely 500 square miles — is projected to supply 25% of the world's entire REE market. . . for half a century.

To companies like Toyota and Honda, that have virtually staked their futures on the rapidly expanding hybrid/plug-in car market, and to our own defense industry, which cannot perform even the simplest task without highly-involved electronic assistance, this news could not have come at a better time.

Because for the last decade and a half, our greatest and most populous modern rival has been hard at work to corner the market on these vital elements.

And on April 17 of this year, with the signing of a single contract, the Chinese reached a record 96.7% global market share.

China's "Dragon Metals"

That's why we've dubbed these commodities "Dragon Metals," because China literally owns that market.

This is the kind of monopoly that has caused emergency Congressional meetings in the past. . .

Meetings that have ended in government-mandated intervention.

But there is nothing Congress can do to stop the Chinese government from closing its global stranglehold on materials without which the modern world cannot function.

It's part of a plan that Deng Xioping claimed almost two decades ago would: "Do for China what oil did for Saudi Arabia."

Evidently, the People's Republic is wasting no time in putting this advantage to strategic use.

Plans to limit exports and systematically inflate prices have already trickled down from the party leaders, and progressive decline in production has been standard operating procedure for the past several years.

According to Wired Magazine, "China's Ministry of Industry is weighing a total ban on exports of terbium, dysprosium, yttrium, thulium, and lutetium — and may restrict foreign sales of other rare earth metals."

This news is a potential death knell for hybrid manufacturers that have forecast 500% growth in the next 6 years alone. . . alongside a wide spectrum of other cleantech companies whose products depend on magnets, motors, and batteries to create and store energy.

Not to mention a political and economic nightmare for our Department of Defense. . .

However, as Greenland prepares to open its resources to the open market, this Chinese monopoly has finally met a foe it cannot easily topple.

Come January, a single company will control this massive deposit, turning it into the world's second biggest single producer of REEs.

With a stock price just under 60 cents today, this company has already gained close to 30% since the start of September. . .

But the big spike is still just around the corner, with a vast majority of the gains still in the future.

In the next few weeks, we'll be publishing specific approaches to squeezing the most mileage out of this historic stock, as well as more information on an approaching commodities boom that may be the biggest we've seen in decades.

Profitably yours,

Brian

P.S. Rare Earth Metals and other commodities vital to the developing electric car and battery markets and Uncle Sam's own defense industry should be on every investor's radar. And as current energy prices continue to rise, we find ourselves in the early stages of the greatest commodities bull market in history. . .

Wealth Daily's Ian Cooper has closed 93 winning trades with his resource and energy stock picks this year alone! Since November 2007, readers of his Pure Asset Trader service have enjoyed gains of 3,124%. You won't want to miss out on these kinds of profits. Click here to read more.


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