When you think about investing in rare earth elements, it may be difficult to comprehend the available types of investment opportunities. Rare earth elements are used in some of the most popular devices we all have, including smartphones, computers, DVDs, and other electronics. With the demand for these products and devices increasing worldwide, many investors look toward rare earth elements as solid portfolio investments. However, the problem is investing in physical rare earth elements isn’t possible. Here are some of the ways you can pursue investment opportunities in them.
Investment Opportunities With Rare Earth Mining Companies
In most cases, an investor is limited to the exploration and mining companies that focus on rare earth elements. It’s important to understand that most of these companies are based in China, which is the largest producing country of rare earth elements. While many of the companies are publicly traded, you can find some companies that offer investment opportunities, like:
- Hastings Technology Metals
- Alkane Resources
- Northern Minerals
- Greenland Minerals and Energy
- Midland Exploration
- Avalon Advanced Materials
- Leading Edge Materials
Several other companies deal specifically with rare earth elements, but these are some of the biggest players worldwide.
Where Do Rare Earth Elements Come From?
As previously mentioned, China is the leader in producing rare earth elements, with the United States being a distant second. To put the difference in perspective, the United States produced 26,000 metric tons of rare earth elements in 2019, while China produced 132,000. Such a dominant player can cause problems worldwide, particularly when the prices spike or when China places export restrictions on its rare earth elements. In this regard, supply and demand will always be a concern and can impact the viability of the investment opportunities presented.
Are Alternative Investment Options Available?
Investing directly in exploration and mining companies is by far the best option when it comes to rare earth elements. Some ETFs offer minimal exposure to these elements, but in many cases, it’s not enough to even consider it from a diversification perspective. However, even minimal exposure through ETFs can help you monitor the industry and better understand whether investing directly in exploration and mining companies is a good portfolio investment for you. Another interesting recent development to monitor is the recycling industry as it relates to rare earth elements. Companies are recovering raw materials from recycled electronic products and using the rare earth elements in various ways.
At Stock Investing Info, one of our goals is to help investors increase their financial knowledge to make informed decisions on the investment opportunities they have in front of them. Rare earth elements will be very important and have a high demand for the foreseeable future. However, with such limited investment options, rare earth elements aren’t suitable for every investor. We would be happy to discuss different options with you, so contact us at any time to speak with a professional.