REE recycling short term value and investments

[multipolargrifter]

What do you guys think the role of REE recycling will be? Given that it will take awhile for extraction and processing for domestic projects to give yield and the export bans from china, do you think that the value of companies involved in REE recycling will rise significantly in these interim years? Are any of you guys thinking of this as part of your investment portfolio? Also, if this is appropriate to ask, what REE related stocks are you personally most confident/invested in?

 

[John]

I am yet to do a deep dive, but I have always been turned off my recyling projects because:
- It is highly labor intensive (ie breaking open the phones, motors etc.) - So this adds to the cost.
- Often the magnets have lots of contaminations....so more processing....adds to cost
- Its just really difficult to do at scale.

I think there are much better investments in the RE sector.

I will do a deep dive into my personal investments in the sector. But my largest two positions are with Arafura (ASX:ARU) and MP Materials (NYSE: MP). I think both of these have more upside for a lot less risk than many other RE sector companies. (Just an opinion...not advice).

The team here are working on some cool things that will help people understand the RE sector and provide useful insights. I'm hoping to release something in a week or two. We are just fine tuning it now. Stay tuned to REEx!!!!

 

[multipolargrifter]

I am yet to do a deep dive, but I have always been turned off my recyling projects because:
- It is highly labor intensive (ie breaking open the phones, motors etc.) - So this adds to the cost.
- Often the magnets have lots of contaminations....so more processing....adds to cost
- Its just really difficult to do at scale.

I think there are much better investments in the RE sector.

I will do a deep dive into my personal investments in the sector. But my largest two positions are with Arafura (ASX:ARU) and MP Materials (NYSE: MP). I think both of these have more upside for a lot less risk than many other RE sector companies. (Just an opinion...not advice).

The team here are working on some cool things that will help people understand the RE sector and provide useful insights. I'm hoping to release something in a week or two. We are just fine tuning it now. Stay tuned to REEx!!!!

Thank you for the genuine insight! I would love to hear your guys' view on these things; I am fixated on USA Rare Earth as well MP. I would definitely be investing in Australian REE companies if I could, but I am just on Robinhood. I will keep my eye out for your investment post.

I am hoping USA Rare Earth drops back down to 8 dollars a share or so, then I think I will be buying in. The problem with MP is I don't know a good price to buy in at. Do you think that with trade war escalations that we might not see the prices of these stock dip back down to previous levels? How much growth in these companies do you think you would expect in optimal government funding conditions?

Part of me also in unsure if trump will bend the knee (in the short term0 and reach a mutual trade agreement with that would put a halt to the REE investment hype. It seems ludicrous that the US would put it off much longer, but such large industrial development plans for REE also seems like a longterm investment that I personally have never seen from the US.

 

[John]

Hi @multipolargrifter

It the short term, anything can happen to these stocks. But in the long term it comes back to fundamentals. Profit. So looking at who has the lowest cost to produce and making a judgement call on where NdPr prices will head is key.

I think the investment in RE Sector outside of China will continue regardless if Trump does a deal with China. No country wants to be totally dependant on one country again. For anything...including Rare Earths. But again, at what scale will the west diversify?

No one knows the answer....but it is going to be amazing to watch unfold over the next few years.

 

[Fundamental]

Of course recycling will contribute, but it will never become the mainstream while there are process losses with each cycle. Also most large RE uses (PM wind turbines) did not become mainstream until 2018, so with a lifespan of 15-20 years should not become available for reprocessing in any meaningful volumes until the mid 2030's. As John says there is a lot of physical work involved in stripping the mechanicals.