The Minister of Resources for the Australian government has identified a list of essential minerals crucial for modern technologies, economies, and national security. This list includes well-known commodities like cobalt, lithium, graphite, manganese, and nickel, as well as a group of seventeen elements known as “rare earths.”
While rare earths are not actually rare in the earth’s crust, they do present challenges in terms of mining and extraction. These elements are vital for high-tech consumer and industrial devices, as well as applications in the defense industry. Among the seventeen elements, neodymium, praseodymium, dysprosium, and terbium are considered the most critical and are commonly used in the production of electric vehicles, wind turbines, and other clean energy technologies.
In the Australian market, Lynas Rare Earths (ASX: LYC) stands out as the largest rare earth miner outside of China, providing 20% of the world’s supply. The company operates mines in Western Australia and processing facilities in Australia and Malaysia. Lynas is also expanding its operations in the United States with a new processing facility in Texas under contract with the US Department of Defense.
On the other hand, Iluka Resources (ASX: ILU) has experienced a volatile stock performance but has recently attracted attention from global investment firm Goldman Sachs, which identified the company as undervalued and placed it on its Conviction Buy List.
Arafura Rare Earths (ASX: ARU) is another Australian company focusing on rare earth exploration and development. Despite minimal revenue and losses, the company’s flagship Nolans Project has the potential to supply a significant portion of the world’s rare earth magnet elements.
Overall, rare earth stocks are gaining traction as investments due to the increasing demand for these minerals in various industries. The Australian market offers opportunities for investors to explore promising projects in the rare earth sector.
