Jeb Handwerger: 'US And EU Are Desperately Seeking Heavy Rare Earths'

Despite market malaise, the outlook for rare earth element demand is growing more and more compelling. China still controls a majority of the supply, but has been cautioning the world that even its reserves can't last forever. North America desperately needs to establish its own sources, but which juniors will be able to fill that need? Jeb Handwerger, editor and publisher of Gold Stock Trades, predicts which companies may win the race to production in this exclusive interview with The Critical Metals Report.
 
The Critical Metals Report: Jeb, you successfully forecasted the mining mini-boom from 2009 to early 2011. Now we find ourselves in a protracted down period in the junior mining space, which is even affecting the seniors and producing companies. What market forces are at work here?
 
Jeb Handwerger: There was a lot of speculative interest in rare earth elements (REEs) in 2011. The REE story was just hitting the mainstream. Then we got hit with the nuclear disaster at Fukushima, the expiration of QE2 in spring 2011, the Euro problems and fear of global contagion of the debt crisis.
 
REE prices have started to come down and now REE equity valuations have reached rock bottom. This has been accelerated by the overall macroeconomic downturn. Investors are panicking and trying to preserve capital by searching for safe havens. They've exited the resource sector and turned to cash and treasuries. There are record-low yields. Investors are buying treasuries for negative returns. The dollar is extremely overbought and the rally into the dollar is beginning to resemble a herd-like move which may hurt many investors. Despite all the macroeconomic doom and gloom, the fundamentals in the critical heavy rare earths forecasts a supply shortfall in the short term.
 
TCMR: China restricted its exports of REEs, which caused the share prices of North American-listed equities to increase in 2010 and 2011. How are China's policies affecting REE markets today?
 
JH: The U.S. Geological Survey (USGS) came out with an estimate of global rare earth oxide (REO) reserves in 2011. It had China around 55 million tons (Mt), about 48.3% of global reserves. China came out with a Jeb Handwerger is a stock analyst who is syndicated internationally and known throughout the financial industry for his accurate and timely analysis of the equities markets—particularly the precious metals sector.
 
DISCLOSURE:

1) Sally Lowder of The Critical Metals Report conducted this interview. She personally and/or her family own shares of the following companies mentioned in this interview: None.

2) The following companies mentioned in the interview are sponsors of The Critical Metals Report: Tasman Metals Ltd., Quantum Rare Earth Developments Corp., Quest Rare Minerals Ltd., Ucore Rare Metals Inc. and Matamec Explorations Inc. Streetwise Reports does not accept stock in exchange for services. Interviews are edited for clarity.

Get The News You Want

Read market moving news with a personalized feed of stocks you care about.

Get The App

3) Jeb Handwerger: I personally and/or my family own shares of the following companies mentioned in this interview: Avalon Rare Metals Inc., Quantum Rare Earths Ltd., Quest Rare Minerals Ltd., Pele Mountain, Tasman Metals Ltd. and Ucore I personally and/or my family am paid by the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview.

Written By: The Gold Report