Short Term Trade – Cochin Minerals & Rutile
Nearly all industries go through cyclical pattern of under and over investment. In the past ten years rare mineral mining companies scrounged through their existence, barely able to make ends meet. That changed in 2011 where under investment lagged many years behind required demand. Consequence was explosion in price of rare earth minerals such as rutile.
India ranks amongst top four countries including Australia, South Africa, United States for rare earth minerals. Investor are sitting at the edge of their seats to figure if this is a lasting trend.
What I do make out it – both miners, processors and ultimate producers are a very consolidated group. Less than 50 global players in each segment. In India only Indian Rare Earth ltd (http://www.irel.gov.in/) is engaged in mining. Less than five players including Cochin Minerals and Rutile are involved in processing. Ultimate users like Ceramics, Paint, Ink are also a small group like DuPont.
Biggest processing company in world is ILUKA from Australia with 30% market share. Number two player is Cristil Global.
Draw your conclusions from the following links, if you go through all links you would not need anyone’s help, so fish it out brothers:
TTP enjoyed a monopoly in the market until the KMML was set up in 1985. http://www.flonnet.com/fl2212/stories/20050617002603700.htm
Disclosure: Invested yesterday and today for trading with expectations of some sustenance into next few quarters knowing that Mining cannot start next month or the month after to cover demand.