Beware: Bogus Mining Story Making the Rounds

Written by Nick Hodge
Posted April 24, 2018 at 8:00PM

There’s a story going around about a “treasure trove” of rare earth minerals that have been discovered off the coast of Japan.

CNBC — you know, the mining experts — called it a “massive, semi-infinite trove of rare earth metals.”

Fortune magazine — those other mining experts — crowed, “Japan's Tech Future Is Looking Brighter After a Monumental Discovery in the North Pacific Mud.”

What this story fails to mention is reality — that thing that’s slipping ever-faster away from the Bizarro World now reigning (more on that another day).

Anyhow, yes, some researcher in Japan found a bunch of rare earths.

But here’s the thing… So can you.

Go outside and look at the ground. There, you found some rare earths.

They are everywhere. Like oxygen or silicon.

In fact, the rare earth cerium is the 25th-most abundant element on Earth.

What makes them rare is the ability to economically extract them from the ground. In other words, to be able to mine them.

What Japan has found cannot currently be economically mined with any methods known to man.

So, as Professor Frances Wall of Exeter University’s Camborne School of Mines explains:

“There have been literally hundreds of exploration projects [that have found rare earth metals] and they’ve not been able to go forward through production because they can’t prove they’ll make any money.

In mining, there are just two things: dirt and ore. Your back garden contains dirt, because it would cost more to extract the rare earths from it then you would make selling them on. The moment it costs less to extract those rare earths, that dirt becomes ore. But what have the Japanese have found? At the moment, it’s still dirt.”

So CNBC’s flashy banner should read "Japan Finds Massive, Semi-Infinite Trove of Dirt."

Where do I send my investment dollars?

Joking aside, the need for rare earths is very real. Like I said, they are rare because it is very rare to be able to economically mine them.

As you may know, China dominates this industry, producing some 90% of the world’s rare earths.

Global Production of Rare EarthsChina uses this as a trade weapon.

We need the rare earths for our precious smartphones, HD TVs, and electric cars.

And the last time China threatened to cut off supply, the prices of rare earths rose sharply and associated stocks went up by thousands of percent.

Quest Rare Minerals, for example, went up over 7,000%.

Quest Rare Minerals

Smart resource investors not following CNBC made gobs of money. Our resource editor, Gerardo Del Real, was one of them.

He made a lot of money for himself and those listening to him in the last rare earth run.

And he thinks it’s about to happen again.

Not only is the world’s appetite for rare earths growing quickly, but China’s method of producing them is extremely dirty. Like with cobalt, it doesn’t make much sense to make electric vehicles out of stuff that’s mined with some of the dirtiest practices on Earth.

So the industry is looking for new sources.

And Gerardo reports he’s found one that will soon be a sought-after new source.

It’s in a safe jurisdiction…

Several studies have already shown it to be an economic source of rare earth ore — not dirt.

And the company that owns it is working with top industry scientists on improved methods to extract the ore.

With or without a trade war with China, the rare earths sector is going to be fertile ground for investment.

The China card could make the difference between hundreds or thousands of percent.

What we do is identify trends ahead of the crowd and then find the best ways for you to invest in them.

So let the mainstream tout laughable headlines like “semi-infinite” finds of rare earth elements…

While you’re profiting from the real situation.

Call it like you see it,

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Nick Hodge

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Nick is the founder and president of the Outsider Club, and the investment director of the thousands-strong stock advisories, Early Advantage and Wall Street's Underground Profits. He also heads Nick’s Notebook, a private placement and alert service that has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy Investing for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world. For more on Nick, take a look at his editor's page.

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