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A piece of bastnasite ore, which contains rare earth elements, is shown by Brock O'Kelly from Molycorp Minerals Mountain pass Mine in Mountain Pass, Califonia August 19, 2009. The open-pit mine at Mountain Pass, California, holds the world's richest proven reserve of "rare earth" metals, a family of minerals vital to producing the powerful, lightweight magnets used in the engines of Toyota Motor Corp's Prius and other hybrid vehicles as well as generators in wind turbines.


Investor interest is increasing in rare earth elements, used in everything from hybrid cars and wind turbines to missile technology, particularly with the United States introducing legislation to develop its own domestic supply. China, which produces more than 90 per cent of rare earths on the market today, is steadily reducing its exports each year to first meet its own growing needs first.

The increased demand for rare earths - which are also used in electronics, specialty glass and nuclear applications - has spurred the creation of dozens of new exploration companies hoping to cash in on the growing trend, and Canada is poised to become a major player.

That is expected to create an oversupply of certain types of the materials, known as light earth elements, which are easier to find in the Earth's crust.

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It is those producers who have a combination of light and heavy earth elements who have the potential to reap big profits in the years to come, according to Jon Hykawy, an analyst at Byron Capital Markets in Toronto.

"Most investors realize that the heavy rare earth element command the higher price because they are rarer," he said.

Mr. Hykaway has been working in capital markets as a clean technologies/alternative energy analyst for the past four years. His current area of focus is the Lithium sector, ranging from availability and production to Lithium battery technology.

He joined us for a live discussion on the rush to mine rare earth elements and Canada's role. View an archive in the box below.

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