Investing in the Rarest Minerals On Earth
One of the most important factors in the price of anything is the abundance of its supply. We all know that when demand exceeds supply, prices go up. If you are interested in investing in minerals beyond the usual gold and silver, you may want to consider a few of these rare earth elements.
Lanthanum is used in nickel-metal hydride batteries. Almost all hybrid motor vehicles contain lanthanum. The increase in demand for hybrid vehicles may increase demand for this metal. It is also used in florescent lighting.
This ore has a low value in comparison to other rare earth elements. China produces most of this metal.
The best way to invest in this ore is by buying stock in a mining or production company. Another good choice is to invest in a battery production company such as A123. Few if any ETFs hold large positions in this metal.
Cerium is the most highly available metal of all the rare earth metals. It is very soft and light in weight. It is mildly toxic. Cerium ignites without any outside heat source at temperatures around 150 degrees Fahrenheit. Keep it away from open flames.
Annual production of this ore is around 24,000 metric tons. China is the largest producer.
It is used in catalytic converters, diesel fuel, magnets, precision optical components such as lenses and for thin surface coatings. It may be used in alloys with other metals to provide strength and to reduce sulfides and oxides.
The best way to invest in this ore is by buying stock in a producer. Molycorp and American Elements are two producers to investigate. They also have interests in a few of the other rare earth ores.
Neodymium is a soft metal. It is easily tarnished. Despite being part of the class of “rare earth” minerals, this metal is actually fairly common. It is seldom found in deposits alone. It usually occurs in areas where other ores are found.
China produces most of the world’s supply of this ore. China has set up strict export quotas that may lead to spot shortages or tight supplies. This ore is also found in Bolivia, Canada and the U.S.
One of its most common uses is to color glass. It is also used in medical lasers, including the ND:YAG laser. This laser shows great promise in cancer treatment and skin treatments.
Another use for this metal is in magnets used in audio equipment, electric motors and disk drives. Hybrid car motors use it to add power as well.
This metal suffers from some lack of price stability. Demand is stable and may increase as the demand for hybrid vehicles and other green technologies grows.
Molycorp, Great Western Minerals, Metall Rare Earth Limited and Avalon Rare Metals are a few of the companies engaged in the production of this rare earth ore. If you want to invest in this metal, one of these may be a good choice for you.
Coltan is one of the most infamous of the conflict minerals. It is used in the production of tin. Most Coltan is mined in Africa.
To import coltan to the United States, it must have a certificate naming the country and mine of its origin. The U.S. does not allow entry of coltan that comes from mines whose profits support civil wars or from mines that are known to commit human rights violations.
For more detailed information about Coltan production, see the recent newsletters on conflict minerals. If you can be certain of its mine, coltan is a great investment.
Rubies are one of the most expensive of the precious gemstones. Rubies are extremely hard. Their natural color ranges from pink to deep red. Rubies are often treated to improve their appearance. Treating reduces the value.
Burma is the largest producer of rubies. Rubies are also found in Myanmar, Kenya, Greenland, Mozambique, Sri Lanka and the U.S.
These gems are used in jewelry, medical lasers and abrasives.
Many investors prefer rubies to diamonds for investment purposes. Rubies are more rare and hold their value better than diamonds. Demand for rubies is always high, especially for good quality, natural, untreated stones.
Despite a slight recent drop, the price of rubies has risen steadily for most of the last ten years. Expectations are for the trend to continue. Ruby prices range from $600 to $10,000 and up per carat for high quality stones.
Some investors like to buy the stones themselves. This may not always be the best course. Individual buyers may pay a high price to acquire the stones.
The investment in stones is not very liquid. It may be hard to sell the stones later except through a dealer.
If you do not want to hold the physical stones, the best way to invest in rubies is through an ETF that focuses on gems.
Lithium is rather common on Earth. It is found everywhere in rocks and in oceans. However, most deposits are either very low in concentration or very poor quality. Thus most of these deposits are not viable for commercial mining. The largest commercial producers are in Chile and Argentina.
This ore is highly reactive. It corrodes easily. The metal is very soft and light in weight. You can easily cut it by hand with a knife.
Lithium is used in medicines, batteries, electronic components, coolants, aircraft lubricants, glass, ceramics and soaps. Because of the increase in the need for lithium-ion batteries, demand for lithium is expected to increase.
The best way to invest in lithium is through an ETF or by buying stock in a lithium production company. Lithium prices are expected to rise because of increasing demand.
Should You Invest in Rare Minerals?
These ores and gems are all rare. Their rarity alone makes them valuable. Many of them have uses in products where expected demand will increase. These uses include green technology, hybrid cars and medical equipment.
As the demand for these end items grows, the demand for the rare ores will grow. This increases the odds that the price will rise. You can earn an excellent return investing in rare ores and gems.
Current trading and production volumes for most items on this list are small. That means that you will need to seek out ways to invest if you are tempted to put your cash into rare earth elements.