Capitalize On the War for Strategic Resources

Written by Jason Simpkins
Posted June 7, 2019

Wars are fought over resources every day.

That includes basic necessities like food and water, wealth like gold and diamonds, luxuries like cocoa and sugar, and strategic resources like oil and metal.

It’s always been this way.

“Gavisti,” the Sanskrit word for “war,” also translates to a “desire for more cows.” The French Revolution was fought over bread. And Germany invaded Russia in WWII because it wanted access to the country’s grain belts.

The term “blood diamonds” refers to diamonds mined in a war zone to finance insurgency or cement the rule of a warlord.

The Soviet Union invaded Finland for nickel. And the United States invaded Iraq for oil.

So, pretty much, nine times out of ten, if a war is being fought, it’s over resources.

And in just the past few weeks, a new war kicked off over another of the world’s strategic resources: rare earth metals.

As we speak, America’s most important defense executives are meeting in a boardroom, discussing the price of these all-important commodities.

These metals have unique properties, including incredible heat resistance, efficient electrical conductivity, ultra-light weight, and powerful magnetism. That makes them key components in modern technology such as smartphones, laptops, wind turbines, medical devices, electric cars…

And, of course, advanced weapons systems. They’re what make “smart bombs” so “smart.” That includes the guidance system for the widely-used Tomahawk cruise missile and anything else with a laser-guidance component.

That’s why they’re such a big deal. They’re a matter of national security.

Rare earths are one of the primary reasons that Soviet Russia invaded Afghanistan in 1979. With over $1 trillion in mineral wealth, the rocky, mountainous nation is a wealth-bed of mineral riches.

But make no mistake, when it comes to rare earths, China is the ultimate, controlling 95% of production.

That’s always been problematic, but it’s a very acute concern now, in light of President Trump’s trade war.

That’s because roughly 80% of U.S. rare earths supplies come from China

But with the trade war intensifying, China has readied a plan to restrict exports of rare earths to the U.S., undermining our tech sector and military preparedness.

“With rare earths essential to every major U.S. defense platform from missile guidance control, directed energy weapons and electronic warfare, to electric drive motors, radar, sonar and optical systems, our deep dependence on Chinese-sourced rare earths poses a significant strategic risk,” a recent Senate report warned.

Another Pentagon report blared: “It is essential that a stable non-Chinese source of rare earths be established so that the U.S. rare earths supply chain is no longer solely dependent on China’s rare earths exports.”

Obviously, other countries feel the same way. From Russia, to North Korea, to Iran, and so on…

Rare earth metals are vital to next-generation war machines and the future of national security. That makes them worth fighting for today.

That much is certain.

What’s a little murkier, though, is how investors can profit.

Major Chinese holdings aren’t open for public investment. And because of the price volatility and barriers to entry (scarcity, high costs, expertise, red tape...) there are only a few companies operating in the rare earth sector.

So it’s incredibly difficult for investors to profit.

However, our in-house resource expert and editor of Junior Mining Monthly, Gerardo Del Real, recently uncovered a promising play. Turns out, there’s a small mining company that just discovered several new rare earth deposits in Sweden.

This new mining project is perfectly positioned to make a killing on the international scramble for essential minerals. And it’s an ideal supplier for major tech companies like Apple and Tesla.

You can find out about that, and more, in Gerardo’s latest report by clicking here.

It’s one of the select few, and perhaps the only viable rare earths play out there.

Fight on,

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Jason Simpkins

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Jason Simpkins is Assistant Managing Editor of the Outsider Club and Investment Director of The Wealth Warrior, a financial advisory focused on security companies and defense contractors. For more on Jason, check out his editor's page. 

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