Investing in 5,000 year old eye makeup

Cosmetics were a critical source of demand for minerals

For example, kohl is a mineral-based eyeliner used extensively by the egyptians more than 5,000 years ago.

Kohl was used to blacken the upper eyelid in the classic egyptian style:

The original recipe for kohl used a mineral known as stibnite, named for the Latin stibium, which means paint and described the painted eyes of the Egyptians.

Stibnite is the ore for the element antimony.

Antimony is a useful commodity. Today, it finds wide use in semiconductors. It is also a critical component in military gear like armor-piercing ammunition, infrared sensors, and nuclear weapons.

It made news recently because China banned exports of antimony, gallium, and germanium to the U.S.

The U.S. International Trade Commission foreshadowed this move in 2021 in a report titled: Antimony: A Critical Material You’ve Probably Never Heard Of

The report goes on to say that 79% of U.S. antimony comes from China.

And now that is a serious problem.

Thanks to the export ban, the price of antimony hit all-time highs between $39,500 and $40,000 per metric ton.

China and Russia control more than 50% of the world’s antimony production.

China controls more than 70% of antimony trioxide – the most useful form of the element. More critically, Chinese mine production declined in 2024 due to lower grade material.

According to Reuters, the price of the metal soared 250% in December 2024. Analysts expect it to stay around $40,000 per ton as non-Chinese suppliers struggle to meet demand.

This is an excellent example of how tariffs and trade wars could distort markets going forward. In this case, we are going to speculate on a tiny U.S. antimony producer to take advantage.

This month we are going to buy the only antimony producer in the U.S.: U.S. Antimony Corp. (NYSE: UAMY).

U.S. Antimony – A Mining Company You Definitely Never Heard of Until 2024

U.S. Antimony Corp (NYSE: UAMY) is a small $183 million mining company that produces antimony, precious metals and zeolite in the U.S. and Canada. Zeolite is a volcanic mineral that contains potassium and calcium.

That makes it useful in agriculture. However, its unique quality is that it acts as a molecular sieve. That makes it a popular media for water filtration and environmental remediation.

UAMY is not a massive producer. But its position as the only U.S. antimony producer is critical.

Let us begin by saying, we are not early to this stock.

As you can see from the chart below, its share price soared when China announced the export ban:

This company is everywhere in the media right now because it’s the only game in town. Every discussion of China’s ban on antimony exports adds a mention of the company. That could be an issue.

U.S. Antimony’s spectacular run adds some risk to this company.

But that’s okay. People buy popular stocks. Particularly stocks that get this much attention.

We remember another example of this back in 2010. The rare earth scare was everywhere. The story was similar: every modern electronic device needed rare earths and China owned all the mines. It created a boom in metals like rhenium, cerium, yttrium, etc.

Molycorp went public around the only rare earth mine in the U.S. They listed just as the price of rare earths exploded. Every news story about China’s control of these critical metals included a sidebar about Molycorp. Its shares hit $74 in just over a year. It was a 500%+ gain.

To be fair, U.S. Antimony shares already outperformed that. But the company is still tiny, just $183 million. During the rare earth boom, Molycorp’s market cap soared to more than $6 billion. U.S. Antimony could have a long run left.

What we like about UAMY is that they generate revenue from U.S. antimony sales:

In its latest quarterly earnings report, the company showed that its antimony sales are already $5.3 million and its total sales are at $8.1 million. That is nearly equal to the full year in 2023, with an even better quarter yet to go.

Action to Take: Buy U.S. Antimony Corporation (NYSE: UAMY) up to $1.75 per share. Do not chase shares. Use a 30% trailing stop on the position.

We can expect its 2024 report to be quite good, compared to last year. That will ease the risk of the much higher share price.

However, we are still paying a lot of money for a small antimony producer. This will be pure speculation on rising antimony prices and the popularity of a U.S. producer. 

For the Good,

The Mangrove Investor Team