With the recent technological boom in the fields of electrical automotive and mobile devices, the demand for specific materials have skyrocketed. One of them is cerium, which is classified as a rare earth element. But, what are rare earth elements (REE), and what should you know about them before you start to invest in it?
Here in Malaysia, the topic of Lynas and its refining facility in Malaysia has been contentious issue over the past decade. Most of it stem from the radioactive nature of the waste that is produced during the process of refinement. Despite the controversy, the company has recently announced that it has achieved record production and second consecutive profit in 2019. Sounds intriguing to your investor soul? Let’s first understand what is there to know about REEs and should you be investing in it?
What are Rare Earth Elements (REE)?
There are 17 elements in the periodic table that are recognized as REEs. These can usually found in abundance in our Earth’s crust, but the way they are dispersed among other ores makes it economically non-viable to extracting them, most of the time. There are only a handful of sites discovered to be viable, with China holding the lion’s share. Generating nearly 80% of all REEs mined globally and owning more than 90% of the $4 billion global market, China is very much aware of its position as the market leader [1,2]. As far as 30 year back, the country even started to ban foreigners from mining its REE resources, stating strategic reasons. Australia and the US is a far second and third, but new mining sites are about to shake things up.