Far East Capital Newsletter
Rare earths will continue to feature
20 Dec 2020

In This Issue

Rare earths will continue to feature

A year ago we released a comparative analysis table of rare earth companies, motivated by the belief that this sector was going to more prominent in 2020. Well, along with gold, the rare earths sector has had a very good year. There are many more companies that have picked up projects and some of the share prices have performed spectacularly. Lynas Corporation has been a good performer at the institutional level while Pensana has outperformed at the speculative end, notwithstanding that its project in Angola.

It is an interesting sector and will continue to be so for an indefinite period of time. Very few of the hopeful companies will get to become producers, but that shouldn’t stop traders from taking advantage of the thematics. Knowing which companies will be the best performers on stock market terms is a bit of a guessing game but the winners will likely have the best promotional machines winding up the punters. Companies with projects in the USA will be of more interest, especially to US investors, due to the strategic nature of rare earth oxides.

Picking the best performers in the real world i.e. those companies that go on to develop a profitable mine is going to be challenging. Precious few companies will make the grade, but if all you want to do is make money out of shares, don’t worry too much about operations that will take many years to develop.

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