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These Critical Metals One Day Will Prove Their Mettle

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Friday, 18 Jun 2010 02:35 PM Current | Bio | Archive

A new report commissioned by the German Federal Ministry of Economics and Technology has studied 41 minerals and metals put forward a relative concept of "criticality."

A raw material is labeled “critical” when the risks for supply shortage and their impacts on the economy are higher compared with most of the other raw materials.

Besides that, the report considers two types of risks.

First is the “supply risk,” taking into account the political-economic stability of the producing countries, the level of concentration of production, the potential for substitution and the recycling rate.

Secondly, there is the “environmental country risk,” assessing the risks that measures might be taken by countries with weak environmental performance in order to protect the environment and, in doing so, jeopardize the supply of raw materials to the EU.

Building on existing approaches, this report sets out an innovative and pragmatic approach to determining criticality.

The report takes into “account the substitutability between materials,” or, for example, the potential for substitution of a restricted raw material by another that doesn’t face similar restrictions.

It also deals with “primary and secondary raw materials,” the latter being considered as similar to an indigenous European resource.

Besides that, it introduces a “logical way to aggregate indicators” and makes use of widely-recognized indexes.

Investors should also note the 14 raw materials deemed as critical because of their high relative economic importance and their high relative supply risk. The "environmental country risk" metric does not change this list of critical materials.

These 14 materials are: antimony; beryllium; cobalt; fluorspar; gallium; germanium; graphite; indium; magnesium; niobium; the platinum group metals (pgms) that regroups platinum, palladium, iridium, rhodium, ruthenium and osmium); rare earths that include yttrium, scandium, lanthanum; and the so-called lanthanides (cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium and lutetium, tantalum and tungsten.

As a long term investor, I would start to look for good professional and trustworthy advice for planning investing, if I hadn’t already done so, in some of the 41 materials alongside, of course, other long term “tangible” investments.

I’m convinced that in the coming years, inflation will hit everybody, everywhere in the world.

These materials will do well not only because of coming inflation, but also because of their growing economic importance and the risks involved and related to their relative rarity.

One of the most powerful forces influencing the economic importance of raw materials in the future is technological change. In many cases, their rapid diffusion can drastically increase the demand for certain raw materials.

Based on this study, the demand from driving emerging technologies is expected to evolve very rapidly by 2030.

As an investor, you have been informed way ahead of time.

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HansParisis
A new report commissioned by the German Federal Ministry of Economics and Technology has studied 41 minerals and metals put forward a relative concept of criticality. A raw material is labeled critical when the risks for supply shortage and their impacts on the economy...
hans,parisis,metals
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2010-35-18
Friday, 18 Jun 2010 02:35 PM
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