Cerium, dysprosium, lanthanum, terbium and yttrium are metals most of us have never heard of.
But if you are keen to diversify your portfolio, maybe you should get better acquainted with these and the other ‘rare earth’ metals, crucial to the technologies of the modern world.
Donald Trump is seeking to acquire Greenland – that ‘big piece of ice’ – for ‘world protection’. But this Arctic island’s other key allure is the substantial untapped reserves of rare earth metals beneath its coastlines.
This global market is worth about $19billion, but it is predicted to reach $36.7billion by 2034 because these elements are used in electric vehicles, laser-guided missiles, microchips, smartphones, wind turbines and much else.
China has the largest rare earth reserves, and it also accounts for 92 per cent of the refining of these metals which has enabled it to weaponise supply.
As a consequence, President Trump is being forced to look elsewhere. Climate change is melting some of Greenland’s ice, which ought to make it easier to extract these rare earth metals from the igneous rocks below.
Digging deep: This global market is worth about $19billion, but it is predicted to reach $36.7billion by 2034
The prospect of such discoveries should be good news for the Aim-listed Alba Resources, owner of the Clogau gold mine in Wales, but also the holder of a stake in the Motzfeldt rare earths project in the south of Greenland.
Already shares in the US group Critical Metals have leapt by 62 per cent this month, spurred by excitement over its joint venture with a Saudi Arabian partner to mine ‘heavy’ rare earths from its Tanbreez project in Greenland. The main customer would be the US defence industry.
Also soaring – up 111 per cent since the start of the year – is the Australian miner Energy Transition Minerals, even though it is in a legal tussle with Greenland’s government over its Kvanefjeld rare earths operation.
Energy Transition Minerals managing director Daniel Mamadou underlined the importance of Greenland’s reserves.
He said: ‘Supply chains for rare earths are now not just priced based on cost, but more importantly on security of supply.’
Such is excitement that shares in Brunswick Exploration, the only company prospecting for lithium in Greenland, has leapt 75 per cent. Lithium is required for electric vehicle batteries and the data centres that are powering the artificial intelligence (AI) revolution.
Also moving upwards is the Canadian group Amaroq, which has discovered rare earth deposits on the island.
Whatever the outcome of Trump’s quest to control Greenland, the spotlight has been turned on the potential value of the island’s rare earth and other metal riches. It has also further enhanced the status of gold and silver in an era of mounting global uncertainty. If you explore these areas for the security they can provide – and for a great adventure – here’s what you need to know.
Rare earths
Greenland’s government is pro-business and not opposed to mining, meaning the lack of extraction to date is due to the considerable difficulty and huge expense of processing rare earths.
But the vital importance of these metals – such as cerium (pictured) – suggests it could be worth betting on a change to this stance.
Most private investors prefer to back the exchange-traded funds (ETFs) that invest in rare earth mining companies. These should be looking for promising opportunities in Greenland as soon as they arise.
The largest funds are VanEck Strategic Metals and WisdomTree Energy Transition Metals & Rare Earths Miners. There’s also iShares Essential Metals Producers, Aberdeen Future Raw Materials and Global X Disruptive Materials.
Get acquainted: Cerium, dysprosium, lanthanum, terbium and yttrium are metals most of us have never heard of
Gold and silver
This week gold rose to $4,988 in response to the alarm sparked by the US President’s pursuit of Greenland.
The price is 76 per cent above its level of a year ago. Institutions are stockpiling gold because they regard the metal as a safer haven than the dollar. But they are also spooked by the size of US government borrowings and the overall level of indebtedness around the world.
Keith Watson and Robert Crayfourd of fund manager CQS said: ‘Central banks are taking the view that it’s not clear where the borrowing stops and how nations get themselves out of this.’
Amid this mounting economic and geopolitical apprehension, Watson and Crayfourd contend that ‘gold could be the biggest winner, given the shortage of supply’.
The metal could reach $5,000 by the end of the year, according to US bank JP Morgan. By Christmas 2027, the price could be $5,400.
Silver has also put on a glittering show, advancing by 147 per cent over the past six months to hit the $100 mark. Experts believe it could top $150 this year.
Like gold, silver is regarded as a shelter in this challenging period. But as Watson and Crayfourd explain, its industrial usage makes up 50 per cent of demand: ‘You need silver for microchips, solar panels and electric vehicles.’
The CQS trusts – Golden Prospect and Natural Resources Growth & Income – focus on the smaller gold and silver mining companies whose share prices have lagged behind those of the precious metals.
This would provide exposure to this part of the market if you already have money in a gold fund such as iShares Physical Gold (where I am an investor) or in funds including Jupiter Gold & Silver that back gold and silver mining companies such as FTSE 100 member Fresnillo and the Canadian-listed First Majestic.
Over the past 12 months, Fresnillo shares have jumped by 514 per cent, while First Majestic is 323 per cent higher.
This underlines the desire of investors worldwide for a slice of the action in metals of every kind, from silver to dysprosium – a fragment of which is to be found in your smartphone.
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