Rare earths gain amid U.S. effort to beat China’s dominance
Shares of U.S.-listed companies involved in the rare earth supply chain rose on Monday as investors continued to weigh the impact of China’s export restrictions on domestic producers.
Rare earths are minerals essential to many aspects of modern life, particularly the technology sector and energy conversion, as they are used in everything from semiconductors to fighter jets and electric vehicle engines.
Prime Minister Donald Trump and Australian Prime Minister Anthony Albanese signed an agreement on Monday to invest in joint ventures to keep a critical mineral and rare earth supply chain afloat that is not dependent on China.
The Trump administration will set price floors for a number of sectors, including rare earths, to combat China’s market manipulation, U.S. Treasury Secretary Scott Bessent said in an exclusive interview with CNBC last week. Shares of rare earth and critical mineral miners have surged over the past few sessions as investors consider which firms could be future targets for the government’s industrial policy.
NioCorp It led the sector’s gains with an increase of nearly 20%. Energy Fuels increased by approximately 7% USA Rare Earth rallied about 14% and Perpetua Resources It progressed over 7 percent. Multi-Purpose Materials It was also in the green and rose more than 2%. Canada’s Lithium America up almost 3%
These moves come as the Trump administration seeks to establish its own domestic rare earth supply chain. The Department of Defense struck a deal with MP Materials, the largest U.S. rare earth miner, in July that included a stock, floor price and purchase agreement.
Investors expect management to support additional miners. William Blair kicked off his USA Rare Earth coverage on Monday on a brighter note, on the expectation that the Trump administration “may soon take a material stake in the company.”
Michael Silver, CEO and president of rare earth distributor American Elements, told CNBC’s “Squawk Box” last week that the U.S. has enough heavy rare earths for military applications, but the squeeze on the supply chain could impact electric vehicles, lasers and “quite a lot of commercial technology.”
Getting the mines operational should be “treated as a national priority,” Silver said, adding that there would likely be government involvement and subsidies.
Under new rules announced earlier this month, foreign companies now need Beijing’s approval to export rare metals and must disclose what they will be used for.
— CNBC’s Spencer Kimball contributed to this report.
