Saturday , 28 May 2022

These 2 Rare-earth Metal Mining Stocks Have Recently Jumped +32.8%

This article provides identifies the companies involved in the mining of rare earth elements and the countries with the largest known reserves.

By Lorimer Wilson, Managing Editor of munKNEE.com. Please note that this complete paragraph must be included in any re-posting to avoid copyright infringement.

Rare earth elements (REEs) are not rare in the common sense of the word but, because they are almost universally by-products typically present in small proportions to what is otherwise being mined, it is very expensive to develop a REE mine and the production costs associated with its mining and processing.

There are 17 rare earth elements (REEs) and they are widely used in smartphones, flat-screen TVs, LED lights, wind turbines, electric vehicles, fighter jets, missiles, radar and lasers.

Uses and properties od rare earth elements

85% of global output of the REEs comes from China and that dominance poses a considerable economic and national security risk to the U.S., one that’s become all the more apparent in the months since trade relations between Beijing and Washington soured further. China is prepared to “weaponize” its supply of REEs just as it did in 2019 when it threatened to curb their export to the U.S. in retaliation over tariffs and, to validate these not-so-veiled threats, China’s rare earth exports to the U.S. have begun to slow, falling nearly 18% in September from the previous month.

The White House was so worried it’s U.S. Department of Energy awarded $19 million last April for 13 projects supporting production of REEs and critical minerals and, in November, the Defense Department announced contracts and agreements with several REE producers. More government money can be expected to be invested in the REE sector going forward.

The list of publicly traded companies that exclusively mine REEs outside of China is limited to MP Minerals Corp. (MP) and Lynas Rare Earths (LYSCF) and, since trade relations between Beijing and Washington began to turn sour in late September, their stock prices have jumped in price.

  •  MP Materials Corp. (MP) is UP +32.3%
    •  is the only U.S. company doing so and operates the Mountain Pass mine in California. In November 2020, the Defense Department awarded the company a $9.6M to aid in its effort to bulk up value-added processing and separation capabilities at the Mountain Pass facility.
  • Lynas Rare Earths (LYSCF): UP +36.1%
    •  is the largest REE miner and processor outside of China, extracts REEs from its high-grade mine in Australia and processes them at its facility in Malaysia.

As can be seen in the table below from Visualcapitalist.com, China tops the list for mine production and reserves of rare earth elements, while the U.S., with only 1.5 million imperial tons in reserves, is dependent on imports from China for refined rare earths at this point in time and, as such, must either tap into these reserves or further develop mines in the U.S. itself. 

Country Mine Production 2020 Reserves % of Reserves
China 140,000 tons 44,000,000 tons 38.0%
Vietnam 1,000 22,000,000 19.0%
Brazil 1,000 21,000,000 18.1%
Russia 2,700 12,000,000 10.4%
India 3,000 6,900,000 6.0%
Australia 17,000 4,100,000 3.5%
United States 38,000 1,500,000 1.3%
Greenland 1,500,000 1.3%
Tanzania 890,000 0.8%
Canada 830,000 0.7%
South Africa 790,000 0.7%
Other Countries 100 310,000 0.3%
Burma 30,000 N/A N/A
Madagascar 8,000 N/A N/A
Thailand 2,000 N/A N/A
Burundi 500 N/A N/A
World Total 243,300 115,820,000 100%

 

Related Article from the munKNEE Vault:

1. Rare Earth Metals Could Be Major Bargaining Chip in U.S.-China Trade Negotiations – Here’s Why

With the US-China trade war deteriorating it is becoming increasingly likely that China…[will] ban exports of rare earths to the USA. This would lead to a scramble by the US to source non-Chinese rare earth sources. This article highlights the supply situation and provides a link to those non-Chinese rare earth miners which are likely to benefit from increased U.S. buying and/or investment.

2. Trade Hardball: China Threatens To Cut Off Supply Of Rare Earth Elements To U.S.

China does not have the means to match the U.S. in the total number, or amount, of tariffs but China can strike back in other ways. One critical way would be to cut off its export of rare earth elements to the U.S..

Scroll to very bottom of page & add your comments on this article. We want to share what you have to say!

Editor’s Note:

Please donate what you can towards the costs involved in providing this article and those to come. Contribute by Paypal or credit card.

Thank you Dom for your recent $50 donation!

 munKNEE.com has joined eResearch.com to provide you with individual company research articles and specific stock recommendations in addition to munKNEE’s more general informative articles on the economy, the markets, and gold, silver and cannabis investing.
Check out eResearch. If you like what you see then…