Donald Trump, China, tariffs, ending the war in Ukraine, Greenland and Russia. 2025 is the year of headlines.
Yet they all have one COMMON theme embedded in all of them…
Rare Earths.
We’ve covered this topic for years at our paid investment advisory, Diggers & Drillers.
In fact, the first stock we tipped was a rare earth play, back in 2022.
We assumed trade wars would flare up and put rare earth stocks under the spotlight.
As it turns out, markets don’t reward you for being too early. That recommendation turned out to be a flop!
So, we shifted to more immediate opportunities, and I’m glad we did.
Yet, everything we detailed three years ago is NOW playing out precisely as we outlined in our first-ever report at Diggers & Drillers.
So, is the opportunity now?
No doubt, you’ve heard a lot of noise from governments trumpeting the need to secure rare earth supply chains.
But what about those who actually use this commodity?
In other words, manufacturers?
Until now, those working at the coal face have been silent on the rare earth conundrum, perhaps fearing that it might impact their stocks’ outlook.
Which is why this development caught my attention last week…
It’s been revealed that a global group of auto executives wrote a joint private letter to the White House last month explaining their predicament if supply chains for rare earths were suddenly closed.
General Motors, Toyota, Volkswagen, and Hyundai were some of the manufacturing titans who feared access to rare earth magnets was in grave danger.
Presumably, this is because of Trump’s tariff war and China’s ability to respond by cutting the entire rare earth supply chain.
This is what the executives said in a later statement to the media:
“Without reliable access to these elements and magnets, automotive suppliers will be unable to produce critical automotive components, including automatic transmissions, throttle bodies, alternators, various motors, sensors, seat belts, speakers, lights, motors, power steering, and cameras.”
And this:
“In severe cases, this could include the need for reduced production volumes or even a shutdown of vehicle assembly lines”
Company executives rarely speculate that their multi-billion corporations could face an imminent ‘shutdown.’
All because of the loss of some raw materials in the rare earth package of elements.
Perhaps Henry Ford, the original titan of car manufacturing, was onto something here…
Ford was obsessed with securing the raw ingredients to make his T-Model Fords.
Going as far as buying up rubber plantations in Brazil to build tyres for those vehicles. And skirt the monopoly held by the British Empire in the global rubber trade.
That’s why phrases like supply fragmentation and trade wars keep these prominent manufacturing CEOs up at night.
Think about it…
Thousands of parts made with raw materials scattered across dozens of countries.
De-globalisation is the terrifying nightmare come true for the world’s largest manufacturers.
That means safeguarding supply chains is no longer a matter of maintaining profits or avoiding production delays; this is a race for survival for household names like Toyota or Mitsubishi.
As an investor looking at resource stocks, it’s essential to recognise that supply chain security will come at a price for these manufacturers.
Think direct deals with miners who can offer supply chain certainty.
That’s precisely what our latest recommendation is doing… But at the right price, of course!
In its latest quarterly report, the company divulged that it charged its customers (manufacturers) a premium WELL ABOVE Chinese quoted prices for its raw material.
So, yes, supply chain security is already demanding a premium; this is REAL.
And that’s delivering fatter margins for certain Aussie miners.
This is the time to add these ‘strategic miners’ to your portfolio.
You can find the name of our latest recommendation here.
Until next time.
Regards,
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James Cooper,
Editor, Mining: Phase One and Diggers and Drillers
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