Rare Earth Metals

Rare Earth Elements: Three Ways

to Profit from Mining Crucial Precious Metals

What do your cell phone, a Euro

banknote, superconductors, fiber-optic

communications systems and the motor

for your car's windshield wiper all have in

common? They (and thousands of other

everyday products) contain minute quantities

of some of the most obscure chemical elements

on the planet.

They're known as "rare earth metals" or

simply "rare earths."

What's the big deal about them?

Simply put, trillions of dollars of modern

devices wouldn't be possible without their

existence. These "rare earths" are critical

elements in many industrial processes and

the United States Geological Survey (USGS)

has identified 17 of them.

Let's take a quick look at "rare earths" to get

an idea of just how pervasive and critically

important they are and, of course, how to do

something that very few other investors

even consider, profit from them…

Little-Known, Rare Earths…

Critical to Everyday Life

The term "rare earths" comes from the

fact that the minerals that contain these

unusual elements were quite rare when

first found in Ytterby, Sweden.

And occupying slots 21, 39 and 57-71 in

the periodic table of the elements, here

are a few of the most commonly

used "rare earths"…

• Cerium is the most abundant
  

of the "rare earths." It's found in automobile
catalytic converters and other pollution
control equipment. And it helps to reduce
 sulfur oxide emissions. It's also added to d
iesel fuel to help it burn better.

• Neodymium is used in magnets to
  

make the magnetic field incredibly strong.
Cell phones, computers and audio
speakers wouldn't exist without neodymium
 magnets. And miniature motors wouldn't be
possible at all without it.

• Holmium has the greatest magnetic
  

strength of any element, and is used
in medical and dental lasers and nuclea
r control rods. It's also a colorant for glass.

• Dysprosium's magnetic strength
  

properties make it a useful material for
 certain lasers, fuel injectors for diesel
engines, compact discs, and other various
 data storage applications.

• Thulium is one of the rarest and most

 expensive of the "rare earth" metals. It
has unique properties that make it ideal
 for laser-based surgical tools.

• Yttrium is primarily utilized to make
  

red phosphors for use in red LED's
and superconductors.

• Europium is a key ingredient in certain

 types of lasers and is a part of the
 chemical process to screen for Down's
Syndrome.

• Erbium is a silvery white metal created
  

for use in photographic filters and as a
coloring agent in cheap sunglasses and
 jewelry. It's also a key element in optical
 amplifiers widely used in fiber-optic
 communications systems.

Rare Earth Elements and The

China Factor – Again…

While found in relatively high concentrations

in the Earth's crust, until 1948 most of the

world's "rare earth" supply came from sand

deposits in Brazil and India.

But in the 1950s, South Africa became the

primary source, with U.S. supplies ramping

up and continuing well into the late 1980's.

And while there is still some residual production

from those sources, China has stepped to the

front of the pack. Its "rare earth" metal

production dwarfs everyone else. As you can

see on the chart, the Red Dragon is responsible f

or nearly 95% of the world's "rare earth" production.

Over the past decade or so, rare metal usage has

increased dramatically, which has resulted

in a significant strain on supplies. In fact,

there's growing concern that the world

may soon face a shortage that could

rise to over 40,000 tons annually.

With China using nearly two-thirds of

what it produces, it's naturally keen to

protect its own interests. The country

is stockpiling its supplies and continuing

to reduce annual exports of "rare earths."

The real concern is that within a few years

China may decide to keep everything it

produces.

As a result of this threat from China, the

"rare earth" sector is on fire, with a worldwide

flurry of "rare earth" exploration. A mine in

California is set to reopen by 2012 and

Australia is currently developing the richest

"rare earth" deposits outside of China.

Three Mining Stocks for "Rare Earth"

Element Speculators

Unfortunately, the Chinese haven't yet

converted the state-owned Inner

Mongolia Baotou Steel Rare-Earth

Hi-Tech Company into a publicly traded

entity, so you can't buy shares. Moreover,

it's unlikely that it ever will become publicly

traded, given the strategic nature

of "rare earths" and China's dwindling reserves.

But many other "rare earth" mining stocks are

up over 100% since China announced a

change to its "rare earth" export quotas in August. Here are a few to consider…

• Lynas Corporation (OTCBB: LYSCF): The
  

company is behind the big Western Australian
 "rare earth" deposit at Mt. Weld and has seen
 its shares soar by 141% over the past six months.

• Avalon Rare Metals (OTCBB: AVARF)
  

and Rare Element Resources (OTCBB: RRLMF)
 are two other rare element miners that have
enjoyed a huge surge over the past six months.
 Their share prices are up 510% and 596%, respectively.

A note of caution, however: like most junior

gold mining stocks, all three are highly speculative.

As such, they're subject to wild price swings.

That said, "rare earths" are in short supply and that

means there will be profitable opportunities, as new

suppliers emerge and try to offset the dwindling

supply from China.

Ibañez Pérez Jesús Oswaldo 18.353.376

Electrónica del Estado Sólido

Fuente: www.investmentu.com/IUEL/2009/.../rare-earth-elements.html