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RARE EARTHS


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Given that the US store at least a years supply of their rare earth needs for military purposes, yes one could say the pentagon is not too concerned. However of greater import, behind the scenes China has revealed its colors to the world and it looks ugly. Indeed, a mere taste of what they would do when various governments won't cooperate with their views on how things should be done.

 

Rare earths are not that rare(mindful that China has about 30% of present known global resources), more to the point is the western world bailed out of this obscenely grubby industry years ago, leaving the door wide open for China to tackle the supply chain, which at huge environmental cost has now made them dominant. A temporary state of affairs, nothing more, because it was they who set the alarm bells off in Tokyo and Washington, and ransom is not a healthy way to promote this sort of dominance

 

On our own local front, Lynas expect to have a trial plant up and running within a few years, "trial" being the operative word, yet the resource behind this initiative is substantial. To be certain China own 25% of the company(in theory adding political strength to their REE position) however it doesn't take the brain power of a Rhodes scholar to find this resource will now be regarded as strategic to Australia's interests, if not the rest of the western world.

 

Sure REE is topical right now, but within a few years won't be

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Jime Dines has been following these for over a year in his newsletter - he was also in early on uranium beofre its rise (and fall). Interesting trading opps but valuations seem high looking at balance sheets. Personally I feel its all part of an emerging markets led scramble for guaranteed supply of commodities. Will settle down at some point...
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With regard to REE's, This article puts it all in a different less xenophobic light with regard to China's motives. Japan could have the ulterior sinister motive and that aligns with The Pentagon not being too worried by China's actions

 

Note: Interesting that Arafura said they didn't want contracts into the future as they might hold them to a less than optimal price. Methinks that's just spin. Contracts into the future as LYC have ATM give it a good footing and countable $$$$ for when production gets underway. so less speculation ATM.

 

http://www.atimes.com/atimes/China/LJ29Ad03.html

 

Cheers!

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The difficulty with the article is that it could have been written by the ministry of propaganda. Perhaps start on page 1(in the link below), then re-read the page 2 link

 

http://www.atimes.com/atimes/China/LJ29Ad02.html

 

 

I mean, the assertion below says a lot

 

""" China's father of rare earth science, Xu Guangxian, alleges that Japanese industry has already stockpiled sufficient rare earth inventories to tide them over for the next 20 years. """

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Hi Watchmaker, You may well be right. However,if you read the next article posted by abner, it sounds like it's been writtten by some apologist for the oil industry, "relative abundance of oil" My point is that there's just going to be misinformation flowing into the forseeable future as everyman and his dog puts his spin on all this. When politics rears it's ugly head they all come out of the woodwork. Hence volatility until some overall picture emerges of the actual situation i.e. contracts
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I'm not sure which abner post you are referring to, but anything that suggests there is a "relative abundance of oil" demands proofs.

 

Rather, the evidence is loud and clear that we have been on the downside of oil for about five years now. Notably, while global financial calamity is still the buzzword among the so called experts, the price of oil has held up very well.

 

In fact, I tend to think if the financial health of the global community makes a marked change for the better the first round of evidence will appear in the price of a barrel of oil. That is, because of a rising demand barometer we will all suffer from higher prices, which of course flies in the face of an abundance of the resource.

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