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Rare metals provide rare opportunities for investors

Gold may be a store of value, but some rare metals will play much more important role in the technology age.

Jack Lifton
Published 5/10/2009

If gold had never existed, it would not have been missed. So far in human history, gold has had no utilitarian value, which means that its use is not critical to the construction or operation of any technology whatsoever. Critical here means that without a specific metal you cannot make the technological device desired, or if you can it will not have optimal properties.

Gold can have strategic value. That is to say that it is one of many materials that can serve the same necessary function. In the 14th century BCE, an Egyptian inventory of a nobleman’s burial treasures shows that a sky stone (meteoric iron) blade was valued at 40 times its own weight of silver! The potential for a meteoric iron standard didn’t last long after the common nature of iron ore and the mass production of iron for weapons was discovered and gold, silver and copper became -- probably in that order -- the coinage metals and remain primarily so today.

Copper first became a technology metal when its alloys bronze and brass became widely used to enable the manufacturing of reliable weapons up until the end of the 19th century. Copper attained to permanent technology metal status when its property as the most economical conductor of electricity made it into the nervous system of not only the industrial age but now of the age of technology.
Gold is a rare metal, but there are rarer ones. Gold’s remaining uses are as an arbitrary store of value -- as money -- and in the preparation of jewelry items, themselves intended to display wealth or maintain their value intrinsically.

Why invest in rare metals production? Almost all of the rare metals have evolved from minor metals to become the technology metals. The basic discoveries in the engineering, chemical and electronic properties of rare metals during and after World War II led to a search for natural resources that could be used to develop these newly discovered properties into practical, mass-produced devices, first for military use and then for daily use by everyone.

I am going to publish an organic listing the future potential of the rare and technology metals as the bases for practical mass-producible technologies. I will update the table and make changes in my recommendations as to whether or not you should buy, hold or sell investments, mainly in mining, in the production or end-use of my listed technology metals.

As a side note, this material also is being used as the basis of a talk entitled “Rare metals as rare opportunities for investors” at the Hard Assets Conference in New York on May 11.

I will do my best to explain concepts as we go along. I will begin by explaining why I have chosen the first group of “Rare Metals” in my “organic table.” They are the critical metals for twenty first century American industry chosen by the US National Academies, and their reasons for doing so are explained in great detail in the publication, “Minerals, Critical Minerals, and the U.S. Economy (2008), which is available free of charge on the Internet at http://books.nap.edu/openbook.php?record_id=12034&page=165#p200140369960165001.

I will update on end-uses of the technology metals that are being proposed for mass production, such as the lithium-ion battery powered plug-in hybrid, and how the production rate of lithium will determine whether or not this technology ever becomes widespread or practical.

I will also be recommending individual rare metal miners as good investments for the short, medium and long term. My recommendations will not be based on whether or not a drill hole has found a trace of a rare metal on the company’s property but on a metric for evaluating rare metal mining opportunities that I will introduce on May 25. These company recommendations will also be organic, and I will be monitoring them to make sure that the metrics have not changed in a negative fashion.

Jack Lifton is a featured contributor to the new Resource Investor. With 47 years experience in the OEM electronics and automotive supply industries, he is today a metals sourcing consultant for OEM heavy industry and offers due diligence analysis for institutional investors. Lifton is a prominent speaker, globally, on the market fundamentals of minor metals and their end-uses. He has traveled the world on behalf of clients including Fortune 500 and Global 1000 corporations. Reach him directly at [e-mail].

If gold had never existed, it would not have been missed. So far in human history, gold has had no utilitarian value, which means that its use is not critical to the construction or operation of any technology whatsoever. Critical here means that without a specific metal you cannot make the technological device desired, or if you can it will not have optimal properties.

Gold can have strategic value. That is to say that it is one of many materials that can serve the same necessary function. In the 14th century BCE, an Egyptian inventory of a nobleman’s burial treasures shows that a sky stone (meteoric iron) blade was valued at 40 times its own weight of silver! The potential for a meteoric iron standard didn’t last long after the common nature of iron ore and the mass production of iron for weapons was discovered and gold, silver and copper became -- probably in that order -- the coinage metals and remain primarily so today.

Copper first became a technology metal when its alloys bronze and brass became widely used to enable the manufacturing of reliable weapons up until the end of the 19th century. Copper attained to permanent technology metal status when its property as the most economical conductor of electricity made it into the nervous system of not only the industrial age but now of the age of technology.
Gold is a rare metal, but there are rarer ones. Gold’s remaining uses are as an arbitrary store of value -- as money -- and in the preparation of jewelry items, themselves intended to display wealth or maintain their value intrinsically.

Why invest in rare metals production? Almost all of the rare metals have evolved from minor metals to become the technology metals. The basic discoveries in the engineering, chemical and electronic properties of rare metals during and after World War II led to a search for natural resources that could be used to develop these newly discovered properties into practical, mass-produced devices, first for military use and then for daily use by everyone.

I am going to publish an organic listing the future potential of the rare and technology metals as the bases for practical mass-producible technologies. I will update the table and make changes in my recommendations as to whether or not you should buy, hold or sell investments, mainly in mining, in the production or end-use of my listed technology metals.

As a side note, this material also is being used as the basis of a talk entitled “Rare metals as rare opportunities for investors” at the Hard Assets Conference in New York on May 11.

I will do my best to explain concepts as we go along. I will begin by explaining why I have chosen the first group of “Rare Metals” in my “organic table.” They are the critical metals for twenty first century American industry chosen by the US National Academies, and their reasons for doing so are explained in great detail in the publication, “Minerals, Critical Minerals, and the U.S. Economy (2008), which is available free of charge on the Internet at http://books.nap.edu/openbook.php?record_id=12034&page=165#p200140369960165001.

I will update on end-uses of the technology metals that are being proposed for mass production, such as the lithium-ion battery powered plug-in hybrid, and how the production rate of lithium will determine whether or not this technology ever becomes widespread or practical.

I will also be recommending individual rare metal miners as good investments for the short, medium and long term. My recommendations will not be based on whether or not a drill hole has found a trace of a rare metal on the company’s property but on a metric for evaluating rare metal mining opportunities that I will introduce on May 25. These company recommendations will also be organic, and I will be monitoring them to make sure that the metrics have not changed in a negative fashion.

Jack Lifton is a featured contributor to the new Resource Investor. With 47 years experience in the OEM electronics and automotive supply industries, he is today a metals sourcing consultant for OEM heavy industry and offers due diligence analysis for institutional investors. Lifton is a prominent speaker, globally, on the market fundamentals of minor metals and their end-uses. He has traveled the world on behalf of clients including Fortune 500 and Global 1000 corporations. Reach him directly at [e-mail].

http://www.resourceinvestor.com/News/2009/5/Pages/Rare-metals-provide-rare-opportunities-for-investors.aspx