Rare Earth Investing Guide: U.S. Stocks, ETFs, and the New Supply Chain

Part 1. Why Rare Earth Investments Matter ― Global Demand and Strategic Importance

1. What are Rare Earth Elements?

Rare Earth Elements (REEs) may sound like “rare” resources, but in fact, their abundance in the Earth’s crust is not extremely scarce. What makes them strategically important is that these elements are dispersed in small quantities, embedded within minerals, making extraction and refining highly complex and costly.

Rare earths consist of 17 elements: 15 lanthanides (from Lanthanum, La, to Lutetium, Lu), plus Scandium (Sc) and Yttrium (Y). Each element has unique magnetic, optical, and chemical properties that make them virtually irreplaceable in modern industries.

For example:

Neodymium (Nd) → high-performance magnets for EV motors and wind turbines

Dysprosium (Dy) → improves heat resistance of magnets, essential for EVs

Lanthanum (La) → camera lenses, optical devices, petroleum refining catalysts

Yttrium (Y) → superconductors, lasers, display panels

Cerium (Ce) → catalytic converters for vehicle emission reduction

In short, rare earths are embedded in our daily life and cutting-edge industries alike: smartphones, semiconductors, EVs, renewable energy, fighter jets, missile guidance, and submarine sonar systems. It’s no exaggeration to call them “the oil of the 21st century.”

---

2. Why are Rare Earths Strategically Important?

Modern society is shaped by two megatrends: electrification and digitalization.

EV and battery industries are expected to grow at an annual average of 20% through 2030, and demand for rare earth magnets will increase accordingly.

According to the International Energy Agency (IEA), wind power installations will expand more than tenfold by 2050, with each large turbine requiring hundreds of kilograms of neodymium magnets.

In defense, rare earths are indispensable. The U.S. Department of Defense reports that each F-35 fighter jet contains over 400 kg of rare earth materials. Nuclear submarines, stealth missiles, and advanced weapon systems also rely heavily on them.

Thus, across energy transition, advanced technology, and defense security, rare earths form the lifeline of industries and national security.

---

3. Supply Chain Vulnerability ― China’s Dominance

The structural problem is that supply is highly concentrated.

About 60–70% of global rare earth mining output comes from China.

In refining and separation, China controls 80–90% of global capacity.

Although the U.S. and Europe have reserves, environmental restrictions, costs, and lack of refining expertise have left them dependent on China.

China has repeatedly used rare earths as a geopolitical weapon:

In 2010, during a territorial dispute with Japan, Beijing restricted exports, shocking Japan’s electronics and auto industries.

More recently, amid U.S.-China trade tensions, China introduced export restrictions, pressuring U.S. semiconductor and defense sectors.

These cases reminded the world that rare earth supply chains are highly vulnerable to political and diplomatic risks.

---

4. Global Response ― Diversification and Self-Sufficiency

Countries are racing to reduce dependence on China.

United States: Supporting MP Materials and partnering with Lynas to build a Texas separation plant. The DoD has committed billions in subsidies and minimum-price offtake agreements to strengthen strategic independence.

European Union: Announced the Critical Raw Materials Act (2023), aiming to raise EU-based refining to 40% of consumption by 2030.

Japan: After the 2010 export ban, it diversified supply through deals with Australia, India, and Vietnam. Japanese companies invested early in Lynas to secure stable supplies.

South Korea: Companies like Hyundai and Samsung are expanding rare earth stockpiles, while KORES (Korea Resources Corporation) participates in Canadian and Vietnamese mining projects.

---

5. Rare Earths as an Investment Opportunity

Rare earths are more than a mining commodity: they are a strategic resource shaping industrial competitiveness and national security. Demand is accelerating while supply remains constrained by environmental, political, and technological hurdles. This creates persistent upward pressure on prices.

For investors, opportunities include:

Companies like MP Materials (U.S.) and Lynas (Australia) expanding non-Chinese supply chains

ETFs run by VanEck and Sprott targeting rare earths and strategic metals

Growth stories combining rare earths with lithium, nickel, and cobalt in the broader clean energy revolution

Thus, rare earth investing offers exposure to three megatrends simultaneously: energy transition, technology competition, and geopolitical risk.

---

Part 2. U.S.-Listed Rare Earth Stocks ― From Mining to Magnets

Below are key rare earth-related stocks accessible to global investors (NYSE, NASDAQ, OTC, ADR). Each company’s role across the value chain, policy catalysts, and stock dynamics are summarized.

1) MP Materials (NYSE: MP) — Mining, Refining, and Magnets

Business: Operates the Mountain Pass mine (Nevada). Expanding into refining and downstream with a magnet factory in Texas. In 2025, signed a U.S. DoD contract guaranteeing NdPr floor price of $110/kg. Also signed a $500M long-term supply agreement with Apple.

Importance: Core of U.S. self-sufficiency strategy. Government and corporate backing stabilize uncertainty. Scaling magnet output from 1,000t to 3,000t per year.

Stock: +40% pre-market jump on DoD news (July 2025). Strong news-driven volatility. Watch policy budgets and timeline for magnet sales.

2) USA Rare Earth (NASDAQ: USAR)

Business: Developing the Round Top project (Texas) and planning a magnet plant in Oklahoma. Diversified resource portfolio includes heavy rare earths and gallium.

Importance: Rare domestic project integrating mining and magnets.

Stock: Sensitive to permits and government funding. Low liquidity; best viewed as a long-term speculative idea.

3) Energy Fuels (NYSE American: UUUU)

Business: Traditionally a uranium producer. Its White Mesa mill (Utah) now includes a rare earth separation circuit with 1,000t/year NdPr Phase 1 capacity. Started pilot for heavy REE separation in 2025.

Stock: Dual exposure to uranium and rare earth cycles. Diversification benefit, but high volatility from two commodity markets.

4) Critical Metals Corp. (NASDAQ: CRML)

Business: Acquired Greenland’s giant Tanbreez deposit in 2024. In October 2025, U.S. government considered an 8% equity stake, sending the stock +75%.

Importance: Strategic Arctic asset tied to U.S. resource security.

Stock: Extremely policy-sensitive. Permitting and environmental approvals will shape the medium-term trend.

5) NioCorp Developments (NASDAQ: NB)

Business: Elk Creek project (Nebraska). Focused on niobium, scandium, titanium, with optional rare earth output.

Importance: Multi-mineral exposure relevant to EVs and lightweight alloys.

Stock: Dependent on financing and offtake deals. Long development cycle, suited for speculative positioning.

6) Lynas Rare Earths (OTC: LYSCF)

Business: Largest non-China refiner. Assets: Mt Weld (Australia), Malaysia refining, U.S. downstream expansion. DoD-backed Texas project under review in 2025 due to profitability concerns.

Stock: Strength during China supply shocks; weakness from cost overruns and project delays. Posted sharp earnings drop (A$8m).

7) Texas Mineral Resources (OTCQB: TMRC)

Business: Round Top deposit with 16 out of 17 rare earths plus lithium and gallium. Heavy rare earth potential.

Stock: Early-stage risk. Dependent on JV deals and federal support.

8) Rare Element Resources (OTCQB: REEMF)

Business: Bear Lodge project (Wyoming). In March 2025, received a $553M loan intent (LOI) from U.S. EXIM Bank. Pilot plant underway.

Stock: Driven by funding, pilot results, and permits. Typical long-cycle mining risk.

9) Neo Performance Materials (TSX: NEO / OTC: NOPMF)

Business: Commissioned Europe’s first major NdFeB magnet plant in Narva, Estonia (Sept 2025). Signed contracts with Bosch and Schaeffler. Targeting 5,000t annual capacity.

Importance: Provides Europe with a non-China magnet supply chain.

Stock: Tied to EU subsidies and green policy. Orders and plant utilization key.

---

Part 3. Rare Earth ETFs ― Diversification, Exposure, Volatility

1) VanEck Rare Earth & Strategic Metals ETF (NYSE: REMX)

Portfolio: Tracks MVIS index. Holds companies deriving ≥50% revenue from rare earths or strategic metals. Includes MP Materials, Lynas, Lithium Americas, Albemarle, Northern Rare Earth (China), Ganfeng Lithium.

Features: Mix of rare earth and battery metals. Not a “pure REE ETF” but broader strategic metals exposure.

Stock: Strong YTD gains in 2025 amid Chinese export restrictions. Moves with MP rallies. Cyclical, news-driven volatility.

2) Sprott Energy Transition Materials ETF (NYSE: SETM)

Portfolio: Rare earths + copper, lithium, nickel, cobalt, manganese. Includes Freeport-McMoRan, Glencore, Albemarle.

Features: Broader exposure reduces concentration risk.

Stock: Sensitive to both rare earth headlines and battery metals cycles. Less pure REE beta, more balanced resource bet.

3) SPDR S&P Metals & Mining ETF (NYSE: XME)

Portfolio: U.S. metals/mining companies, primarily steel, iron ore, coal, copper, aluminum.

Features: Rare earth exposure limited but benefits indirectly during commodity supercycles.

Stock: Tracks U.S. mining cycles and infrastructure spending.

4) iShares MSCI Global Metals & Mining Producers ETF (NYSE: PICK)

Portfolio: Global mining majors such as Rio Tinto, BHP, Vale, Anglo American.

Features: Stable global exposure, but rare earth allocation limited.

Stock: Correlated with iron ore, copper, coal. Rare earths only partial.

5) Invesco DB Base Metals Fund (NYSE: DBB)

Portfolio: Futures-based exposure to copper, zinc, aluminum.

Features: No direct rare earth exposure. Used for hedging or trading base metals.

---

Conclusion ― Rare Earths: Land of Opportunity or Pitfall of Risks?

Rare earths tie directly into energy transition, advanced technology, and defense security. Long-term demand is structurally strong. But dependence on China and extreme policy/geopolitical sensitivity mean high volatility.

For investors:

Individual stocks (e.g., MP) provide huge upside but frequent ±10–40% swings.

ETFs (REMX, SETM, XME, PICK, DBB) offer diversification, though exposure purity varies.

Successful investing requires balancing both, tracking policy developments, and setting firm stop-loss and rebalancing rules.

---

⚠️ Investment Disclaimer

This article is for informational purposes only and does not constitute a recommendation to buy or sell any securities. All investment decisions are the sole responsibility of the investor.

---

📚 References

Reuters, “MP Materials partners with US Department of Defense to boost rare earth magnet supply” (July 2025)

Apple Newsroom, “Apple expands US supply chain with $500M commitment to MP Materials” (July 2025)

VanEck, “Rare Earth & Strategic Metals ETF (REMX) Fact Sheet”

Sprott Asset Management, “Energy Transition Materials ETF (SETM) Overview”

EU Commission, “Critical Raw Materials Act” (2023)

Lynas Corp. Half-Year Financial Report (2025)

Energy Fuels Inc., White Mesa Project update

U.S. Export-Import Bank, Rare Element Resources LOI (March 2025)