small extract on HREE by legendary investor James Dines - taken from a recent Dines Letter:-
The geological scarcity of heavy Rare Earth Elements-bearing rocks, and high financial barriers to entry, limit current and future competition. Due to the risk created by the overwhelming Rare Earth Elements supply monopoly of China’s state-owned enterprises, combined with their irreplaceable chemical and electrical properties, heavy Rare Earth Elements were identified in 2014 as the most at-risk raw material for the European Union by “The Ad Hoc Working Group on Defining Critical Raw Materials.”
Then, as now, there is no “plan B” to source heavy Rare Earth Elements. The market segment positioned for strongest growth is the field of high-strength, permanent magnets. Permanent magnets, produced with Rare Earths extracted from Chinese mines, are now consumed by all participants in Europe’s industrial mega-sectors.
Combining China’s current monopoly on processing Rare Earths, and its military expansionism, we wonder how long would it take for the Pentagon to fully comprehend that cruise missiles can’t be produced without Rare Earths. During a possible war with China it might be embarrassing for the Pentagon to ask it for those elements.
The full downstream supply chain already exists in Europe, so all value-added steps, which are currently carried out in China, could be undertaken in Europe.
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Yes James Dines is bullish on the future prospects of HREEs
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