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Within all of the market turmoil, there appears to be a bright spot within the rare earths arena. Many of the big rare earth players have been picking up steam for a week or so, but as the rest of the market has sagged, their strength has only increased. As strange as it appears, this could be the beginning of another powerful leg up assuming the US Congress comes together to pass a debt resolution and avoid default.

As Lynas’s (OTCPK:LYSCF) path to production has run into some roadblocks, Molycorp (NYSE:MCP) has seen its shares rise as some appear to be hedging their bets. It is anyone’s guess as to how serious the radioactive issue will be for Lynas in Malaysia, but no one can argue that concerns over the issue can simply be brushed aside, especially after renewed fears over radioactive substances after Fukushima. Also helping Molycorp is the fact they announced plans regarding the construction of facilities at their Mountain Pass Mine, which the market and many skeptical followers have been waiting for. MCP shares perked up from around the $54 level last week powering higher and once again rose on their recent news release (viewable here). As we have seen in the past, when this stock takes off it can produce some amazing returns.

Rare Element Resources (NYSEMKT:REE) saw its shares move higher this week, probably due in some part to general industry movements, but some of the gains have to be attributable to short covering. As rare earth prices continue to rise, and the company moves forward with its Bear Lodge project, investors will take notice. We have looked over the transcripts of an interview our Editor did with the company’s CFO a while back (available here), and looking over the recent news releases, are quite impressed with the company’s progress.

REE has one of the lowest costs to production according to their PEA which they released last year, and better still, they have great infrastructure. The infrastructure, the roads and such, is similar to MCP's and will help the company keep capital costs down. This will not be the case for its chief competitors in the North American market, or even the other parts of the world. The company’s flagship project has a world class REE deposit and sizable gold resource to accompany that. These are two of the hottest commodities to invest in right now, and like Molycorp, REE can catch fire and power higher quickly.

Avalon (NYSEMKT:AVL) has been growing a following here in the States, however, it still plays follow the leader with the above two. AVL is a HREE play, whereas both MCP and REE are LREE plays. Canadian investors had begun to cool to this issue before its American listing due to high development costs associated with its deposit and its remoteness. The dilution has already begun, and shall continue as the company moves forward. Investors should keep in mind that there are persistent rumors of interest from Molycorp to buy AVL to fill out its need for HREEs. Although the company has shown strength recently, look for the stock to move lower as the market digests its latest offering to fund further studies on their flagship project (see news release here).

The next HREE play which America still has not caught onto is Quest Rare Minerals (NYSEMKT:QRM). QRM has one of the largest HREE deposits in the world which appears to be open-pittable, which would allow the company to get to production at about half the cost of AVL. Quest is also cashed up for the foreseeable future with a tiny 50 million share float which really allows the shares to rocket when their news is flowing and drill results are being churned out.

The company has further drill results pending, should once again increase their resource estimate, and we still believe there is a very good chance one of their other projects (in particular their JV with Search Minerals) turns up a second gem within the portfolio. That project is a kicker, as it is close enough to the flagship Strange Lake project that there is no need for a deposit to be huge, assuming it is near surface too because of the synergies they could realize. It is also possible, and this is our opinion, that the rocks would be similar and could make it that much more economical for QRM to move forward.

QRM has been pretty quiet in regards to finding clients to help with development via offtake agreements, or potential JV partners. Investors should begin to anticipate some news on this front after the resource calculations from the next batch of drill results as the sheer size and grades of the deposit will be otherworldly. With REEs beginning to perk up once again, this is a must watch.

Also keep an eye out for Tasman Metals (OTC:TASXF), a European focused REE play with a very promising project in Norra Karr, which recently was declared a strategic project by the national government in Sweden. This guarantees the company’s project will not be impeded as it progresses forward towards a development decision and the actual development should that be the decision. Tasman should be debuting on the AMEX exchange in the very near future, at which time it will be one of the few REE plays on the major exchanges for Americans to gain exposure to the industry in.

As investors come around to understanding the great news surrounding the industry, as well as the recent positive news flow, they should migrate back into these plays. With many of the actual physical REEs doubling in price recently, China’s quotas announced, and REE consumers around the world scouring projects to lock in future supply, the future really does look bright.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Rare Earths Perking Up