EXR Trading 2022, page-644

Hi @Stevej1979, I like ASM - rare earths as opposed to energy. Price is bottoming out at the moment (in my opinion). A theme running through my investments is supply chain risks - identification of alternate sources of critical metals where those critical metals are controlled by potentially hostile regimes who make political rather than economic decisions about supply, that's one of the reasons I like EXR. ASM aim to mine and refine rare earths in partnership with the South Koreans - the South Koreans definitely understand the importance of a diversified supply chain. I agree about jurisdictional risk being an issue with EXR, but not because I'm concerned about an invasion of Mongolia. The Chinese can't invade everyone they have issues with - that would be a lot of invasions, we've also seen the failure of their sanctions on various aspects of Australian trade with the Australian producers.

Leadership of countries like Russia and China can have bellicose foreign policy till they're blue in the face, but they'd do well to remember what Lenin said, "Every society is three meals away from chaos". Let's see how the citizens of those countries feel about the grand ambitions of their leaders to recreate the empires of old, when those political decisions start to influence the lived economic reality.

Russia is a corrupt nation, it's ranked 136 out of 180 by Transparency International (https://www.transparency.org/en/cpi/2021) and there is disproportionate wealth in the hands of the elite. An interesting piece in the AFR (https://www.copyright link/world/europe/laundered-money-could-be-putin-s-achilles-heel-20220226-p59zwo) PDF version here it's behind a paywall (Laundered money could be Putin’s achilles’ heel.pdf). This isn't a America is good, Russia is bad comparison by the way, every country has its issues and you could (and many do) say the same thing about disproportionate wealth being in the hands of the few in the US and many western countries - but - conscripted soldiers being forced to invade their neighbour (who are first cousins with close religious and ethnic ties) by a wealthy elite trying to recreate a long forgotten empire, and in doing so causing economic and financial hardship for the rest of their population might not be that clever. Ask the Tsar how similar behaviour turned out for him and his family.

What it does do from my perspective is highlight the importance of alternate supply chains. Titanium for example is critical for military applications. Which countries are number one and two in the world for titanium production? China number 1 and Russia number 2. Ukraine is number 5.

Rare earth metals in general. Number one producer is China, number 7 is Russia. Worlds second biggest producer of natural gas - Russia.

Necessity for the west to find alternate sources of supply and refinement - clear and obvious.