There are a lot of misconceptions about owning strategic metals. In this video, I share the most important things you need to know in order to make an informed decision about investing in them.
(full video script included below)
This is an introduction that highlights what prospective investors would not be aware of and absolutely 100% need to know about owning Strategic Metals. I will highlight the pivotal and essential facts that relate to safety and security, thus leading to an investment play with no surprises along the way. It is slightly longer than our usual updates however I am 100% certain it will be of value to prospective investors. I will then conclude with current data on supply and demand and the outlook for the future.
I will begin with the 4 most important safety aspects of the purchase. This is our warranty statement if you will. Our guarantees to you the investor.
The first characteristic appears to be counterintuitive, even a contradiction in that the investment play, the opportunity for you the investor to purchase and own Strategic Metals is not the most important part of our business. So bear with me here for a minute, the investment side only represents about 20% of what we do. Our primary business activities are as an industry supplier, 80% of our activities are supplying Strategic Metals to clients in more than 70 countries, as you can probably see the investment side could not work for you or us if we were not a bona fide industry supplier. The only end buyer for Strategic Metals are industry buyers, this provides your exit. We provide the exit. For example, right now our inventory in the vault in Frankfurt sits at more than 200 metric tons of Strategic Metals. Only 20% of those metals are owned by investors. That ratio is very important as it allows us to guarantee our investors/clients quick and easy liquidation of their metals upon request. If 80% of our activities were not as an industry supplier we could not offer this opportunity to investors.
The 2nd item in our warranty statement is we guarantee you the investor is buying industrial grade high value assets, still in original packaging from the producer which is very important for the end buyer in terms of chain of custody. And of course, purity levels, analysis reports, and case numbers. Only an authentic industry supplier can pledge this…
Next is storage conditions, our storage vault is industry standard, and some of our raw materials are oxides which are the powdered form of Rare Earth Elements like Neodymium for example. For oxides to maintain their purity levels over extended periods the storage conditions need to be of professional standard, this also relates again to the chain of custody and exempts the metals from having to be retested for purity before sale to the end buyer. If the oxides are stored and maintained properly they can be stored almost indefinitely.
The 4th and final feature is the all-important exit strategy. As we know the only end buyer for Strategic Metals are corporations and countries. We sell directly to buyers in over 70 different countries. Strategic Metals are now crucial to all nations’ economic prosperity and also increasingly important to a nation’s security capabilities. One F35 fighter jet has more than ¾ of a ton of rare earths. The US Army plans to have an all-electric non-tactical fleet by 2035 and an all-electric tactical fleet by 2050. Sorry, getting back to our final item we guarantee the liquidation of your metals, usually in 3 to 4 working days, at the current market price of course. Strategic metals are extremely liquid and can be converted to cash in less than a week and again only because we are a bona fide industry supplier with direct and daily access to buyers worldwide. So, on the one hand, owning Strategic Metals does not provide passive income as profits are realized upon liquidation however unlike say real estate as an example. Strategic Metals can be liquidated very quickly. I would also add owning Strategic Metals provides geographic diversification. If all my assets are in one country and one currency then I don’t have full diversification, at least concerning modern portfolio theory.
Now to performance, Strategic Metals have outperformed Precious Metals, FTSE and the S&P consistently for the past 5 years. Gold has increased approximately 54% in the past 5 years, roughly 10% a year. Way better performance from Strategic Metals, in the same 5 year period from 2017 to 2021 Terbium increased 354%, Neodymium 337%, Praseodymium 295%, Gallium 240%, Dysprosium 220% and on and on, these performance numbers I am quoting are from Bloomberg by the way
So what does the future look like, the prices of Strategic Metals are driven purely by supply and demand, they are not correlated to the stock market and demand is increasing across all industries and supply simply cannot keep up? As we say here even the dogs on the street know that the demand for the key elements needed in all modern technology will continue to increase, also demand for the raw materials critical to electric cars is skyrocketing, likewise, solar power and wind power and that’s before we even discuss aviation, military applications, medical devices, other future technologies in the pipeline. I don’t think anyone could argue that demand is not increasing…
Now to supply, China is the dominant market leader in Rare Earths and has been for some time. The reason China has a near-monopoly in Rare Earths is that a generation ago they decided they would, in 1980, for example, the US produced 60% of the world’s Rare Earths, by 2010 China produced essentially 100% of the world’s rare earths. The demand for the raw materials for consumer goods has already made China the centre of the earth and that’s before we consider the momentous demand now taking place for raw materials needed for electric cars, solar and wind power. I recently read an article written by Jack Lifton from InvestorIntel, Jack is considered the foremost authority in Rare Earths in North America and Jack states that if nothing changes then by 2030 we in the west will be dependent for our economic strength on what the Chinese will let us have and crucially China will set the prices.
Now, with that in mind, it makes perfect sense to own these raw materials that are in such demand where supply is limited and subject to disruption. In addition to that, you are storing your assets in Germany one of the world’s largest and most stable trading economies and you are in partnership with a recognised industry supplier with access to buyers in more than 70 countries worldwide.
If you would like to add Strategic Metals to your portfolio or just want to investigate further then please go to our website Strategic Metals Invest or contact us, I am Louis O Connor, it is my pleasure to be with you today.