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The Monopoly of Rare Earths in China: An Investment Perspective

Rare earths have attracted international attention due to China's near-total monopoly on their production. While this monopoly raises concerns about supply security, it can also be seen as an investment opportunity for entrepreneurial minds seeking to diversify their portfolios.


a rare earths factory in china of the China Rare Earth group

Chinese authorities have announced through a decree the establishment of the China Rare Earth Group.

This new entity is poised to become the global leader in heavy rare earth production. It is the outcome of a merger between three major Chinese corporations (Minmetals, Chinalco, and Ganzhou Rare Earth), which will collectively hold a 65% stake in the company, along with two research and technology groups, Grinm Group and the China Iron & Steel Research Institute (each holding a 4% stake in the company).



Chinese Dominance in Rare Earths

Since the 1990s, China has emerged as the primary producer of rare earths, controlling over 80% of global production. This dominant position has provided China with substantial economic leverage, particularly in international trade negotiations. However, this dependence on a single source raises concerns regarding supply security, as any disruption in the supply chain could have significant repercussions across several critical industries.



Technology and Innovation

Investing in rare earth diversification initiatives can also be linked to technological advancements. Researchers are exploring cleaner and more environmentally friendly extraction techniques, as well as improved recycling methods to recover rare earths from end-of-life products. Investors play a crucial role by funding these innovative projects, thereby contributing to the stimulation of research and development in the field of rare earths.



Investment Opportunity: The Quest for Independence

In the face of this Chinese monopoly, an increasing number of companies and countries are actively seeking ways to secure their rare earth supplies. This creates an investment opportunity for bold entrepreneurs and investors who are willing to support initiatives aimed at developing alternative sources. Research and development projects are underway to discover new rare earth reserves outside of China and to develop more efficient recovery technologies from existing sources, such as electronic waste.



In Conclusion

While the Chinese monopoly on rare earths presents supply security challenges, it can also be viewed as an investment opportunity for entrepreneurs and investors keen on diversifying their portfolios and contributing to technological innovation. By supporting research and development initiatives focused on rare earths, investors can play a pivotal role in establishing alternative and sustainable sources of these vital minerals, while fostering a more balanced and resilient global economy.


Turn the challenge of the Chinese rare earth monopoly into an investment opportunity with ElioStrategy. Request your brochure at www.eliostrategy.com/brochure

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