Monday, March 14, 2011

Rare Earth Elements

At the risk of boring our readers we will again provide an update on the conditions driving the market for Rare Earth Elements and the companies that mine them.

Another week, another price increase.  The news in the industry is that price quotes are good for only one hour.

The chart below is provided by a major mining company and shows current market pricing as it relates to their specific mix of elements.

Rare Earth OxideDistribution200720082009Q3 2010
 Q4 2010
Lanthanum Oxide25.50%3.448.714.8823.6752.4998.00
Cerium Oxide46.74%3.044.563.8823.0552.6297.00
Neodymium Oxide18.50%30.2431.9019.1255.8181.38172.00
Praseodymium Oxide5.32%29.0529.4818.0354.3778.62157.00
Samarium Oxide2.27%3.605.203.4014.4036.5892.00
Dysprosium Oxide0.124%89.10118.49115.67281.54287.85522.00
Europium Oxide0.443%323.90481.92492.92585.31611.54830.00
Terbium Oxide0.068%590.40720.77361.67593.38620.38 820.00
Av.  Composition11.5914.8710.3216.0262.18118.71

As you can see the price per/kg has risen another 5.75% since our last update two weeks ago.  More detailed pricing is available at and you should determine which elements make up the mix at your company's mine and track their prices.

What is the most interesting fact on this price sheet?  The mix of elements mined by this company has almost doubled in price since the end of 2010.  Many of our Rare Earth mining picks have been in a consolidation and have not accurately reflected the price movements of their underlying asset.

With all of the talk about alternative energy in the wake of the Japanese disaster we can only imagine what the reaction will be when the news media realizes that we can not build windmill turbines and other critical components without Rare Earth Elements.  The fact remains that today China controls 97% of the world's mined supply and plans to continue restricting exports.

Again, there are over 200 companies that "claim" to be in this business.  We feel that we have picked the best for ourselves and our partners.  Only time will tell but certainly their is pressure building as the divergence between the stocks and the underlying elements continues to grow.

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