Rare New Boon for Investors

Lynas scores Malaysia plant license is the just the latest among a host of news regarding the mining of rare earths elements. While many investors have focused on the benefits offered by investing in gold and silver in an economy that remains anything but certain, rare earths are beginning to attract attention around the world as a possible new avenue for safe haven investing.

Rare Earths Mining Background 

Although many people may not realize it, rare earths elements play a significant role in modern industry and technology. Numerous rare earths elements can be found in a host of products modern consumers use every day. Uses of rare earths elements include everything from hybrid cars to smartphones. Despite their widespread and ever increasing use, the supply of rare earths elements has remained significantly uncertain for many years.

This has largely been due to the stronghold China has held on the rare earths mining industry for decades. Until Lynas received the temporary operating license to mine rare earths elements in Malaysia, China accounted for 95% of the production of rare earths elements in the world. Lynas has estimated it will be able to reach a 22,000 metric ton production capacity by the end of 2013.

Although the demand for rare earths elements has continued to increase during the last few years due to amplified industrial use, the supply of these essential elements has remained stagnant. In fact, China even began to reduce export quotas two years ago. Following a diplomatic dispute with Japan, the export of rare earths from China to Japan was even temporarily suspended. The continued tightening of production by China instigated increased concern in the industry and eventually led to the entrance of several mining companies, including Lynas, into the rare earths processing sector.

Increased Production Offers New Investment Opportunities 

In light of increased production, a number of investors are now beginning to view the potential of rare earths as financial tools. Gold and silver have long served as a hedge against inflation and as tools for asset protection and growth. It is now widely believed that the new investment opportunities in rare metals and earths could serve investors in the same regard. The demand for rare earths is expected to continue climbing each year as much as 12%. Investors looking for a safe haven investment opportunity could well find that rare earths elements are just the investment tool they are seeking.