The study by Oakdene Hollins says that while demand for rare earths has “skyrocketed” in recent years with the rise of hi-tech electronics and clean technologies, markets remain potentially volatile.

It urges investors and corporations looking to enter the market for critical metals recovery to be aware of several issues which could affect demand and impact on prices such as political risk and concentration of production.

Oakdene Hollins’ director of sustainability Nick Morley said: “The debate over criticality is informative, but it does not directly amount to an investment opportunity.

“The challenge for investors is to be able to cut through the current hype surrounding many metals and to be aware of a number of specific issues to be able to make an informed investment.”

The report has identified the metals with the most potential for recovery over the next five to ten years, based on forecasted supply deficits. Rare earths such as neodymium and dysprosium, as well as tellurium, indium, gallium, platinum group, tantalum and (non-metal) graphite are forecast to have the greatest supply-demand imbalances for 2015-2020.

According to Morley, investors should ask whether these metals are highly reliant on a single application and thus vulnerable to technological change and substitution.

Maxine Perella

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