Why should you invest in rare earth elements? Bismuth Cobalt TantalumDuring times of economic turmoil, investors typically turn to the safe haven assets of precious metals and oil, but rareearth metals provide a new opportunity.What are rare earth elements?Rare earth elements include 17 chemical elements of the periodic table not often found, thus they are referred to as‘rare’. They originate in high concentrations in the earth’s crust, but are difficult and costly to extract withconcentrations occurring in certain parts of the world.Rare Earth Elements together with industrial and technical metals such as bismuth, chromium, cobalt, gallium,hafnium, indium, molybdenum, tantalum, tellurium, tungsten and zirconium, they are one of the most importantbasic necessities for all of the world’s industries. (Silver is also used in various industries, with approximately 75% ofall silver ever mined having been consumed, compared to gold, where 95% is still inexistence).Where are they found?Many of these elements are found outside China, but most of the mines in other countries have closed down.Bringing them back to production is a costly and time consuming process. Bismuth, indium and gallium are mined predominantly in China. Cobalt and chromium are mined in Africa, Tantalum and zirconium are mined in Australia, Tellurium and molybdenum are produced in the US and South America.
Chinese dominationAs technology becomes more integrated into our daily lives, demand for these resources continues to increase. Themarket requirement for strategic elements is expected to reach 200,000 tonnes by 2014. China’s own requirementfor rare earth elements is forecast to exceed supply by 2012.Not surprisingly, these supply and demand imbalances affect prices. More than 95% of the global supply of rareearth elements is produced by China however, from the second half of 2010, export quotas were slashed.So why does China dominate strategic metal mining?The answer is mostly due to it’s lax environmental policies – mining causes pollution and environmental concerns inwestern countries make mining these resources on home ground, even if they exist, is a very costly proposition.While Japanese researchers and explorers have recently found a huge deposit of rare earth reserves in the muddyfloor of the Pacific Ocean, the technology to exploit this has not been developed. According to an article in the WallStreet Journal, an official with a Japanese rare earth metals trading house said commercialisation could take up to 20years. Substitutes are inferior or unknown.Investing in rare earth elements with London Commodity MarketsAt London Commodity Markets, our goal is to isolate and identify opportunities that provide a unique chance forinvestors to take advantage of the rare earth elements and alternative investments market.Our company ethos is one where each package is tailored to the parameters given to us by our clients. Ourrepresentatives will focus their research and advice on identifying the ideal market in which to achieveoptimum returns on the investment, given the expectations of the client. Find out what we can do for you by visiting our website http://londoncommoditymarkets.com