Rare Earth Metals Investment - Molycorp Inc

Ever heard of rare earth metals?  For those just graduated from college with a Chemistry major you could probably recall those from the periodic table.  For people who didn't even take Chemistry class since high school probably not.  But for investors like us why bother? You ask.


Well first of all the rare earth metals are 15 lanthanides: lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, and ytterbium at the bottom of the period table plus scandium, yttrium.  If these does not sound like English to you let's look at what these metals can do.  For instance neodymium is in your computer hard drive, DVD player, A/V equipment and military gears; europium is a crucial part of LCD TV; erbium is in fiber-optic cables.  The list of rare earth metal applications goes on and on, from as big as the hybrid-car and fighter jet to as small as iPhone and computer chips.  


So now you know how important rare earth metals are the next question is: why bother?  Although the Earth's crust is full of these metals, they are so widely dispersed so only a few places have quantity large enough to make it economically feasible to extract them.  And whoever has large supply of rare earth metals definitely has the advantage like the oil OPECs and China is the one with majority control with 97% the world's rare earth metals supplies.    Therefore the recent Chinese boycott of rare earth metal export to Japan create worries among the global economy.  Yet to investors this is great investment opportunity as like the oil price bubble years ago that drove up many oil companies stock prices, imagine what this can do to the rare earth metals stocks.  


There are only a few public traded rare earth metals stocks with only one traded on NYSE - Molycorp Inc. (MCP).  The US based company owns one of the most ready-to-extract rare earth metals mines in the western hemisphere and was trying to raise money through the IPO earlier this year to re-open the rare earth metals mine that stopped operation in the 1980's.  Those who bought the stock back than at $12 per share have so far have enjoyed a 200% gain as the stock is now near $36 per share.    Despite the 200% gain the trend is still up so while the bubble of rare earth metals is still in the making maybe we could see this pass the $50 mark easily.