As discussed ad nauseum on this site, China controls 35% of the world's know rare earth element deposits and 97% of current production. They have restricted exports in the face of rising demand. The rest of the planet decided to indulge in excessive, credit-fueled blind consumption for three decades while never asking where the parts used in these convenient products come from?
Now, as we have predicted, China's intentions are becoming clear. Even the mainstream press is reporting what we have been labeled conspiracy theorists for saying.
The Reuters article above makes some statements regarding the future of rare earth deposits outside of China being no longer economic. Insinuations that this movement to produce good inside China solves the free world's supply problems should be disregarded immediately.
We have discussed the essential components of modern military equipment that require rare earth elements. Could you imagine placing a large order of smart bombs with a Chinese manufacturer in order to use them in a war with China?
The price of rare earth elements themselves have soared far higher than the stock of the companies attempting to mine them. Over the next few months as the world continues to wake up to this reality the right stocks in this sector should drastically outperform the overall market.