Commodity Stocks: Rare-Earth Miner Receives First Supply Contract!
By Ann Sosnowski
In the beginning of May, rare-earth prices increased 12%, a jump from $9.43 per kilogram to $10.58 per kilogram.
Much of this was due to an increasing supply glut of rare-earth oxides, or REOs, on the market.
First of all, rare-earth production has stopped in the Baotou region of China due to the government’s insistence to curb contamination in the water supply that flows to the Yellow River. Baotou is the origin of most of the rare earths for the separation plants in China. This government interference could take 20,000 tons of rare earths off the market on an annual basis.
Furthermore, in the area of Sichuan, the local government has been trying to restructure rare-earth operations into four groups. That restructuring has been halted and could affect the flow of 25,000 tons of rare earth per annum.
This fares extremely well for our little Australian rare-earth miner who’s set to take over China’s monopoly on rare-earth production!
Commodity Stocks: First Supply Contract Worth $90 Million!
On the heels of rising rare-earth prices, this little micro-cap Australian miner has just announced that it signed its first rare-earth supply contract. The value of the contract is more than $90 million!
The contract is also for a whopping five years, and institutes the new concept of a safe and transparent global rare-earth supply chain, a longtime hope of this Australian company.
This contract will allow the company access to (at minimum) 10,500 tons of this Australian micro-cap’s rare-earth supply, about one-third of its annual volume, and about 15% of the mine’s expected value.
This is just the first supply contract awarded by the rare-earth miner. Many more letters of intent (or LOIs) are expected to turn into full-fledged rare-earth contracts.
My micro-cap Australian rare-earth miner has jumped back up above 90 cents per share on the news. For a chance at gains of 1,000% over the long-term on this company, the time to get in is now.
Ann Sosnowski
Senior Analyst
Diligent Investor MicroCap Hot Sheet
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