BusinessJul 17, 2026
The Rare Earth Trade Is Back in Focus As Global Investment Ramps Up
Mineral Security
Rhea Lobo
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Rare earths are a group of 17 metals that power nearly everything from fighter jets and missiles to electric vehicles and smartphones. China controls an estimated 85% of global processing capacity and has increasingly used that dominance as geopolitical leverage.
Beijing expanded rare earth export controls in October last year, then agreed to delay full implementation by a year.
The International Energy Agency warns that if those controls take full effect, roughly $6.5T of downstream industrial production outside China faces supply disruption. The US and Europe would absorb nearly half that economic hit.
China also announced parallel controls on graphite, the key material inside EV batteries. Full graphite controls could put another $300B of production at risk. China produces more than 90% of the world's processed graphite.
The IEA notes that public financing commitments for new critical mineral projects more than quadrupled between 2023 and 2025, reaching $65B globally. New refining projects in the US and Malaysia have already pulled China's rare earth market share down to 85% from 90% in 2023.
Washington's response has been aggressive and expensive. The US allocated roughly $46B for critical raw material projects over the five years to February 2026. That is about eight times what the EU allocated over the same period.
The US has negotiated preferential mineral access in the Democratic Republic of Congo and Ukraine. Its Export-Import Bank offers financing for critical-material projects where foreign suppliers sell directly into the US market.
Countries by share of global rare earth reserves (2026)
Brazil-based rare earth miner Serra Verde Group secured a $565M US government financing package and entered a 15-year deal to sell its magnetic rare earths to a special-purpose vehicle partly capitalized by the US government. USA Rare Earth is now acquiring Serra Verde outright.
"While we're talking, the next value chain is bought by the Americans."
Bernd Schäfer, EIT RawMaterials
For investors, the clearest publicly traded expression of this theme is MP Materials. The company owns Mountain Pass in California, the only rare earth mine and processing site of scale in North America, and operates a downstream facility in Fort Worth called Independence.
MP cut off rare earth concentrate sales to Chinese customers in July 2025 and now focuses on higher-value separated products like neodymium-praseodymium oxide and metal. In the first quarter of 2026, Materials segment revenues reached $72.2M.
The Pentagon has agreed to purchase magnets from MP's planned 10X facility in Northlake, Texas, and guaranteed a minimum EBITDA level for that plant.
The setup is not clean. MP has reported operating losses for 11 consecutive quarters as it transitions to higher-value products. Cost of sales climbed 52% in the first quarter of 2026. Start-up costs surged 503% as magnet production ramped.
Shares have fallen roughly 19% over the past three months yet all 19 analysts covering the stock rate it a Buy.
Two smaller names have also drawn analyst attention. Rare Earths Americas recently completed an IPO focused on heavier rare earth elements, with projects in Georgia and Brazil. All three analysts covering the stock rate it a Buy with a $25 price target. USA Rare Earth has nine analysts covering the stock, all rating shares a Buy.
On the startup side, the Pentagon recently invested $25M into ReElement Technologies, a rare earths processing startup planning a commercial facility in Marion, Indiana. The funds will go toward equipment that recycles magnets and produces rare earths, germanium, and gallium. The policy tailwinds are accelerating, but execution will determine the winners.
