The Trump administration invested taxpayer money into an Australian scandium mine. Scandium sits between calcium and titanium on the periodic table. Retail traders cannot locate any of those three elements on a periodic table. They cannot locate Australia on a map either.
The Department of Defense calls this a strategic move to counter China's dominance in critical minerals. Critical minerals are minerals the military needs to build weapons systems that will sit in warehouses until they become obsolete. The weapons get replaced by newer weapons systems that require different critical minerals. The cycle continues until the sun explodes.
Scandium strengthens aluminum alloys. It makes aircraft lighter and fuel cells more efficient. The global scandium market is worth approximately $140 million per year. For context, Americans spend more than that on pumpkin spice lattes in October alone. The Pentagon looked at those numbers and thought yeah, this is where we plant our flag against China.
Australian rare earth miners do not mine rare earth. They mine scandium. Scandium is not a rare earth element. It is a transition metal. The company stock surged anyway because investors read "rare earth" and "Department of Defense" in the same headline and experienced a Pavlovian response that bypassed their prefrontal cortex entirely.
Chart analysts are now drawing lines on a stock chart for a company that extracts an element most of them cannot define. They are identifying support levels and resistance levels and cup-and-handle formations. The handles are attached to nothing. The cups are empty. The mine does not exist yet.
Some guy in New Jersey just bought call options on a hole in the ground in Australia because the military wants shinier airplanes.
Photo by Stephen Mabbs on Unsplash
Leave a Comment