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Jim Rogers: China and Rare Earth Materials

January 06, 2011
“The future of rare earth is great. What is happening is the prices are going through the roof because the Chinese do control the supply, but it is pure simple capitalistic economics now”

China has a virtual monopoly on rate earth materials such as Calcite, Barite and Dolomite,Yttrium, Cerium and Lanthanum (additives in diesel fuel), Europium (needed in CFLs) and Neodymium (magnets in wind turbines and electric vehicles). Various reports indicate China currently exports 97% of these rare Earth minerals. Recently, China announced it will be cutting back exports and thus causing the prices for these are commodities to shoot to the roof. In return, companies such as Molycorp (MCP) immediately started to re-open old mines to take advantage of the demand and high prices.

On this matter, Jim Rogers had the following to say on rare Earth materials during his recent interview with ET Now.

"Well, China does produce 97% of rare earth. Uranium is not a rare earth, but they do produce a lot of uranium as well. The future of rare earth is great. What is happening is the prices are going through the roof because the Chinese do control the supply, but it is pure simple capitalistic economics now. A lot of other people are opening mines because they can make a lot of money and governments are behind the companies opening new mines. So it’s all going to bring a new supply and eventually the price of rare earth will come down again. But in the mean time until the new mines can come on stream, somebody is going to make a lot of money"

About the author:

Alex Garcia
Alejandro Garcia, B.S. Business Admin-Option in Finance, is a private value investor who uses his blog as a means to write about his experience with Joel Greenblatt's Magic Formula

Visit Alex Garcia's Website


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