Korab Resources has discovered rare earths among its phosphate deposit in the Rum Jungle area of the Northern Territory. Its amazing how much rare earths you can find when you are looking for them. Actually rare earths are not really rare at all....though some of them are rarer than others. Its a suite of some 26 elements if memory serves me. There is of course a rare earths boom on at the moment...but I give its longevity little hope. The fundamentals are positive in the short term, but by 2015, it will be extinguished. The problem is that you can't really have a boom until consumers are actually consuming. Companies don't want to invest so much in a recession, and they are not prone to invest in new materials unless there is able supply. The market is however good for a supply shock...but not for a decade I'd say.
The other problem is that its hard to get excited about a boom if you don't know about it. This is the problem with platinum and palladium. Would anyone buy a metal they don't know. This is why gold makes more sense. Are you going to go off and research 26 different metals in order to get exposure to 1 or 2 companies... Not yet I'd say. I think this boom will fizzle out soon...and the focus will come back to gold and silver. Maybe it will be a correction in the market...maybe it will be the fact that the processing infrastructure to recover rare earths is rather expensive. Mind you, these tribulations will not stop people making money in the short term. The other problem is the long development lead time. I remember investing in the Lynas Corp rare earths story 10 years ago now.
So I see people have bid up Korab without much information at all. Good luck with that.
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