Electric Transportation Could Jump-Start Rare Earth Markets

The Metals Report: You've said that the ratio of natural gas to oil prices [see price charts below] represents the largest arbitrage opportunity in history. What does that mean for the future of transportation and rare earth element (REE) consumption?

Patrick Wong: This trillion-dollar arbitrage will bring a lot of momentum into the electrification of transportation. You need REEs to make the permanent magnets that go into the electric drive motors, so they have a key role. In 10 years, we'll look back and recognize that this is the beginning of the end of a world dependent upon petrol-based transportation. Continue reading "Electric Transportation Could Jump-Start Rare Earth Markets"

The Results Are (Almost) In for Rare Earth Competitors

The Metals Report: Alex, what is your overview of the rare earth element (REE) space?

Alex Knox: The highlight is that two large deposits of light rare earth elements (LREEs) are coming into production: Molycorp Inc.'s (MCP:NYSE) Mountain Pass and Lynas Corp.'s (LYC:ASX) Mt. Weld deposit. The considerable increase in LREE production has eliminated the need for any market niche for these types of deposits, at least for the short-term.

I see a dramatic need for development of heavy rare earth element (HREE) deposits in the western world, now that China's crackdown on illegal mining has presumably cut into its production of HREEs. A number of companies have reached pre-feasibility or preliminary economic assessment (PEA), and one already has a feasibility study. Overall, I believe this space offers the most potential growth and the most potential to add new deposits.

TMR: Can investors make money in REEs? Continue reading "The Results Are (Almost) In for Rare Earth Competitors"

Chris Ecclestone: Gold Will Fall, Time to Switch to Specialty Metals?

The Metals Report: Christopher, you believe that the market will recover in 2013. Why?

Chris Ecclestone: We'll have a different type of recovery than we've had in the past, when everything was driven by the financial industry and house price inflation. The U.S. keeps driving along the edge of the cliff like Thelma and Louise, but never actually going over.

I get the feeling that there will inevitably have to be a recuperation. The ducks are in the row now for an industrial recuperation probably a construction-led one. I'm not talking about a rip-roaring recovery, but there is such a delicate balance in base metals between supply and demand that it doesn't take much recovery to vacuum up lingering stocks and tip the markets back into a deficit situation again.

TMR: The Dow Jones Industrial Average is a couple of hundred points away from its all-time high. Do you get the sense that retail investor sentiment has changed? Continue reading "Chris Ecclestone: Gold Will Fall, Time to Switch to Specialty Metals?"

Kevin Puil: $4/lb Copper Is on Its Way

The Metals Report: Kevin, base metals analysts from London to Sydney to Toronto are increasing their price outlook for copper. Do you agree with their bullish outlook for 2013?

Kevin Puil: Yes, I absolutely agree with their bullish outlook. In fact, I've been bullish on copper for quite some time. Although there have been many analysts purporting that the commodities cycle has run its course, I disagree. The fundamentals for copper remain highly favorable and I continue to see secular demand for most commodities, copper in particular. Industrialization and urbanization, especially in the BRIC (Brazil, Russia, India, China) countries, is not about to stop, and this continues to put pressure on copper miners, who struggle to keep up with demand. Supply growth has slowed due to lower grades, higher costs and political unrest. In addition, the new projects and mine expansions that were scheduled to come on-line haven't materialized, and if they do, it will not be in a timely fashion. Continue reading "Kevin Puil: $4/lb Copper Is on Its Way"