Rare Earth Minerals (LSE: REM) has had an amazing 2014, rising by more than 140% year to date.
However, the company’s not done yet and Rare Earth could rise further. So, here are three reasons why you should consider buying Rare Earth today.
1. Rising demand for lithium
Rare Earth’s main commodity is lithium, an essential mineral for today’s world. According to the company’s own forecasts, the demand for lithium ion batteries for use within electric vehicles will more than quadruple by 2020. The demand for ‘smart-grids’ to improve global electricity use will also drive the demand for lithium ion batteries.
All in all, global demand for lithium is expected to double for 2021 and continue on growing indefinitely. As the world becomes increasingly interconnected, especially with the rise of the internet of things, demand for batteries will surge. This is something Rare Earth is set to benefit from, as the company has built its portfolio of assets specifically to focus on lithium production.
2. Greenland
One of Rare Earth’s leading prospects is the company’s Greenland exploration licenses. It was recently found that these licenses contained previously unidentified gold and silver deposits, along with rare earth elements.
The company has great plans for the Greenland prospects, as they are located near two of the world’s largest rare earth mineral deposits. As a result, it’s likely that the company could be on the verge of uncovering a huge resource within the previously underexplored location. A larger than expected deposit could enable Rare Earth to develop an exciting, home grown rare earth metals production facility.
3. Asset diversification
Outside of Greenland, Rare Earth’s has several other projects underdevelopment, and this is yet another one of the company’s attractive qualities. You see, rather than staking its fortunes on one license, Rare Earth has acquired interests in lithium projects around the world, to maximize exposure and reduce risks.
For example, as well as the company’s Greenland prospects, Rare Earth has interests in projects located within Mexico and Australia. Rare Earth does not owns these projects, the company holds a share in the company operating the license. This ownership structure once again reduces the risk to Rare Earth.
Far to go
Even though Rare Earth has many attractive qualities, the company is still in its early stages of development. As a result, there are plenty of things that could go wrong. On the other hand, the company’s shares could become ten-baggers over the long term. I would strongly suggest that you do your own research before making any trading decision.
