Rare Earth Stocks Breaking Into New Highs

There have been major developments occurring this week in the rare earth arena, which could hold significance for the expansion into Europe of Molycorp (MCP) and the development of a US domestic supply chain of rare earths (Market Vectors Rare Earth/Str Metals ETF (REMX).

Molycorp is fast becoming the Stella Polaris of the rare earth complex. It announced its takeover of a little-known Estonia-based producer called AS Silmet, purveyor of niobium and tantalum. The move involving acquisition of this unlisted production company is quite significant. It reveals the awareness on the part of the European community to secure rare earth finished products. Europe is embracing clean, carbon-free energy and independence from Middle Eastern oil. This requires an increase of fuel-efficient hybrid or electric vehicles. In fact Renault is planning four new electric vehicles to introduce to the market and expects demand will increase significantly by 2020.

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