Rare earth metals investments often deter investors due to their complexity, but through rare earth stocks and exchange-traded funds (ETFs), investors can still seize opportunities in this sector. Rare earths comprise 17 elements (15 lanthanides plus scandium and yttrium), each with distinct applications, supply-demand dynamics, and price trends, creating a unique market environment.
Rare earths are generally divided by atomic weight into light rare earths and heavy rare earths. The latter are in higher demand due to their scarcity, yet light rare earths remain indispensable. Based on usage, rare earth magnets (such as praseodymium, neodymium, samarium, and dysprosium) and fluorescent rare earths (such as europium, terbium, and yttrium) are the two core categories. Since rare earths are not traded publicly, pricing information must be obtained through specialized agencies (e.g., Strategic Metals Invest, Fastmarkets).
China has long dominated the rare earth supply chain, accounting for 70% of global production (270,000 tonnes) in 2024, with refined capacity reaching as high as 90%. The United States (45,000 tonnes) and Myanmar (31,000 tonnes) rank second and third, respectively. China controls the global market through export quota systems; for example, the 2010 production limits triggered a spike in prices, prompting an overseas exploration boom, though most companies exited following subsequent price declines. A notable case is North American rare earth giant Molycorp, which went bankrupt in 2015 and was later acquired by MP Materials, eventually reentering the market in 2020.
Geopolitical tensions exacerbate supply risks. During the US-China trade war, China imposed export controls on key rare earth elements such as samarium and gadolinium by 2025, directly impacting industries including electric vehicles and military manufacturing. Myanmar, a major source of China’s medium and heavy rare earths (exceeding 70% share), saw production halts in 2023, and unrest in Kachin State in 2024 further drove up prices.
To reduce reliance on China, overseas firms are accelerating their investments. Australian rare earth producer Lynas, for instance, established a plant in Malaysia and received a joint venture investment of AUD 200 million from a Japanese partner in 2023 to expand heavy rare earth capacity. In 2024, Lynas launched the Kalgoorlie processing plant, boosting neodymium-praseodymium production by 22%. Meanwhile, US-based MP Materials secured government funding of USD 58.5 million and began producing neodymium-iron-boron magnets in Texas in early 2025, supplying sectors such as electric vehicles, wind power, and defense.
On the demand side, the surge in electric vehicles, wind energy, and high-tech products has dramatically increased the need for rare earths. The demand for elements like dysprosium (used in steel and laser manufacturing) is rising with industrial upgrading, while recycling technologies and deep-sea mining emerge as new directions, although the latter face environmental controversies.
For rare earth stocks, here are some notable listings across U.S. exchanges (NYSE, NASDAQ, and OTC), Canadian exchanges (TSX, TSXV), and the Australian Securities Exchange (ASX) as of April 22, 2025, with market capitalizations over $500 million:
For companies with market capitalizations ranging from $5 million to $500 million:
ETFs offer a diversified risk profile:
In summary, the rare earth market presents both opportunities and challenges amid technological advances and geopolitical factors. Investors must closely follow supply-demand shifts and policy changes, using diversified strategies to capture industry growth benefits.
