Image Source: Pixabay

Introduction

According to the Washington-based Center for Strategic and International Studies, China currently accounts for about 70 percent of rare earth mining operations and 90 percent of processing as a result of a sustained state-led investment push that analysts say was unencumbered by the sort of environmental and economic feasibility concerns that would affect similar projects in Western countries.

For countries to reduce their dependence on China, they will have to secure a complex set of supply chains that span mining, processing, metallization and magnet manufacturing and such a self-sufficiency push faces challenges including high capital costs, gaps in technical expertise and environmental risks. In addition, even with a “sustained policy and investment momentum,” the U.S. and its allies will likely need 10-15 years to create a supply chain with the “breadth and depth” to support growing demand, according to Adamas Intelligence.

U.S. President Donald Trump’s administration has undertaken a flurry of activity to boost access to rare earths, including stockpiling supplies, fast-tracking new mining projects in the U.S., taking stakes in two Canadian mining companies and courting governments overseas. 

1. Last month, his administration oversaw the signing of an agreement between Missouri-based US Strategic Metals and the Pakistani military’s Frontier Works Organization on the export of the South Asian country’s minerals; 
2. the previous April, Washington reached a deal with Ukraine under which Kyiv agreed to share the profits of future commodities sales;
3. and just a week ago Trump and Australian Prime Minister Anthony Albanese signed a pact to invest $8.5B in rare earth projects in Australia with the Australian and U.S. governments taking ownership stakes in the projects to guarantee the supply of the critical minerals, which include terbium, yttrium, holmium and erbium.

The Current Reality

As I wrote in an article back on October 12th, China’s stranglehold on the minerals has taken on new urgency with the announcement on October 9th that, effective November 1st,  Beijing plans to require foreign companies to:

• obtain permission to export Chinese rare earths equipment or material and
• obtain a license to export rare-earth magnets and certain semiconductor materials that contain even trace amounts of minerals sourced from China or produced using Chinese technology. 

On Friday, October 10th, Trump responded by saying “there is no way that China should be allowed to hold the world ‘captive' with its rare earths policy because of its 'monopoly' on these crucial resources and announced that:

• the U.S. would be imposing an additional 100% on Chinese imports over and above the current 40% that is already in place, effective November 1st, 
• and would also be imposing export controls on “any and all critical software.” on the same date - Rare earth metal companies soared by 10.5%, on average, on the day. 

This past Sunday, however, U.S. Treasury Secretary Scott Bessent told NBC News that Washington and Beijing were expected to reach a deal to avoid a new 100% U.S. tariff on Chinese goods, with Beijing set to defer on imposing strict rare earth export controls. Elevated stocks of rare earth metals tanked 9.6% on Monday and another 5.0% on Tuesday, as a result. 

Our Rare Earth Stocks Portfolio

On October 11th I wrote an article entitled  All About Rare Earth Metals: Production, Reserves, Stocks which:

• identified the 10 countries that mined the most rare earths in 2024,
• the top 8 countries in terms of rare earth element reserves, and 
• a list of the biggest rare earths stocks by market cap on U.S., Canadian and Australian stock exchanges.

In an article on October 12th I divided those companies into production (producers), developing mines (developers) and exploring for such mineral deposits (explorers), along with each company's focus, country of operation and market capitalization. Today's article highlights the performances of those 11 stocks so far this week, in ascending order, by type of activity, and MTD, as follows:

Producers

1. Lynas Rare Earths (LYSCF): DOWN 20.3% so far this week; DOWN 8.8% MTD 
   • Country: Australia
   • Market Capitalization: $13B
2. MP Materials (MP): DOWN 8.3% so far this week; DOWN 3.2% MTD 
   • Country: U.S.
   • Market Capitalization: $13.9B

Sub Total Average: DOWN 10.1% so far this week; DOWN 4.0% MTD

Developers

1. Arafura Rare Earths (ARAFF): DOWN 24.1% so far this week; UP 69.2% MTD
   • ​​Country: Australia
   • Market Capitalization: $794M 
2. USA Rare Earths (USAR): DOWN 14.8% so far this week; UP 16.9% MTD
   • ​​​​​​Country: U.S.
   • Market Capitalization: $2.3B
3. Ucore Rare Metals (CVE:UCU): DOWN 13.4% so far this week; UP 33.4% MTD
   • ​​​​​Country: Canada 
   • Market Capitalization: C$800M
4. Liuka Resources (ILKAF): DOWN 12.3% so far this week; UP 3.0% MTD
   • ​​​​​​​Country: Australia
   • Market Capitalization: $2.2B
5. NioCorp Development (NB): DOWN 7.6% so far this week; UP 14.2% MTD 
   • ​​​​​Country: U.S.
   • Market Capitalization: $1.1B

​​​​​​​ Sub Total Average: DOWN 21.8% so far this week; UP 4.0% MTD

Explorers

1. Mkango Resources (MKNGF): DOWN 20.0% so far this week; UP 8.1% MTD
   • ​​​​​​​​​​​​​​Countries: Poland & Malawi
   • Market Capitalization: $307M
2. Vital Metals (VTMXF): DOWN 16.0% so far this week; DOWN 8.7% MTD
   • ​​​​​​​​​​​​​​Country: Canada
   • Market Capitalization: $23M
3. Northern Minerals (NOURF): DOWN 14.3% so far this week; No Change MTD
   • ​​​​​​​​​​​​​​Country: Australia
   • Market Capitalization: $343M
4. Aclara Resources (ARAAF): UP 9.0% so far this week; UP 36.6% MTD
   • ​​​​​​​​​​​​​​Countries: Chile, Brazil & Peru
   • Market Capitalization: $794M 

​​​​​​​Sub Total Average: DOWN 9.8% so far this week; UP 25.2% MTD

Grand Total: DOWN 14.1% so far this week; DOWN 0.9% MTD​​​​​​​

Conclusion

The decline in the stock prices of the above rare earth metals companies is slowing, DOWN 9.6% on Monday and "only" DOWN 5.0% on Tuesday. Perhaps they have finally reached bottom but time will tell and I will provide a summary of their performances for the week this Friday.

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