Brazil's Vale, the world's largest iron ore producer, is looking to become a major producer of rare earths resources in an effort to help its home country lower its dependence on Chinese imports of the 17 elements used to make electric cars, military products and smartphones.
China controls 95% of the global rare earths export market and the country's continued quota cuts have led to soaring rare earths prices. Brazil has substantial rare earths resources and has already landed a contract to be a supplier to China's Foxconn, the manufacturer of the iPad.
Vale (VALE) would benefit from a move into the rare earths space, according to Brazil's Science and Technology Minister Aloizio Mercadante, the Financial Times reported. On Tuesday, Goldman Sachs raised its price target on Vale to $44, representing significant upside from where the shares currently trade. Goldman cited global iron ore supply issues as one reason for the increased price target.
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