Rare earth companies are on fire as Washington’s trade clash with Beijing tears through global markets.
According to the Financial Times, investors are pouring billions into mining stocks after President Donald Trump moved to crush China’s control over critical minerals, which are materials used to make smartphones, EVs, and fighter jets. You know, stuff that keeps both Silicon Valley and the Pentagon awake at night.
Shares of MP Materials, USA Rare Earth, and Lynas from Australia have more than doubled this year. Trump’s White House is going all in to rebuild a domestic supply chain that has been under Beijing’s thumb for decades.
The Trump administration is cutting environmental red tape, speeding up mine permits, and launching what officials call a “mine, baby, mine” plan to fast-track projects from Nevada to Alaska.
China strikes back with tougher export rules
Beijing rolled out fresh export controls this month, forcing foreign companies to seek approval before shipping out magnets containing even trace amounts of China-sourced rare earth elements. They also slapped new restrictions on five more minerals (holmium, erbium, thulium, europium, and ytterbium) tightening their grip on the market.
That move sent Western investors scrambling. “There’s across-the-board interest from investors in these mining companies,” said Timothy Puko, director of commodities at Eurasia Group. “There aren’t many publicly traded Western companies to invest in. Very few targets and a whole lot of shooters right now,” he added.
The Trump administration responded with direct investments. Washington paid $400 million for a 15% stake in MP Materials, the biggest rare earth producer in the U.S. The company also handed CEO James Litinsky a $15 million stock award the same week.
The government has also taken a 5% stake in Lithium Americas and 10% in Trilogy Metals, two Canadian miners whose shares skyrocketed within hours of the announcements.
Officials are building a $1 billion strategic reserve of critical minerals to shield the defense and electronics industries from Chinese supply shocks. The plan includes setting a price floor for rare earth, a move aimed at keeping miners stable despite market volatility.
U.S. miners cash in as analysts warn of hype
Mining executives are racing to raise cash while the window’s open. Standard Lithium secured $130 million through a public offering last Friday. Critical Metals raised $50 million from an unnamed institutional investor to push its Tanbreez rare earth project in Greenland—its shares have tripled this year. Meanwhile, Perpetua Resources, which runs a gold and antimony project in Idaho, raised $425 million in June through public and private share sales.
But not everyone’s cheering. Gareth Hatch, founder of UK-based Strategic Materials Advisory, said smaller firms are taking advantage of the frenzy. “Various rare-earth junior-mining companies have been milking the situation with weak and meaningless announcements,” Gareth said. “While I wouldn’t call it a bubble yet, investors must do their homework.”
Guy de Selliers, executive chair of Defense Metals, warned that artificial price floors could distort the market. He said, “Abstract subsidies are dangerous. Stockpiling is the real way to build a fair price floor.”
Despite the noise, established producers like Lynas and MP Materials are seeing solid gains.David Merriman, research director at Project Blue, said their stock rallies are “fundamentally driven,” as they’ll need to fill the supply gaps left by China’s export curbs.
But he added that “every rare earth developer and their aunt has jumped on this opportunity to claim they’re getting government backing or an industry deal, pushing stocks higher in a hype storm.”
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