Rare Earth Metals: Stocks and ETFs to Watch

When you invest in commodities and the companies that produce them, one of the things you’re doing is gaining exposure to the materials that our economy is built with.

Nowhere is this more true than with rare earth elements.

They’re not as visible as the steel used to build bridges, the gasoline used to power cars or the copper used to make pipes in houses, but they’re still everywhere.

Neodymium is found in the magnets that make your smartphone vibrate. Yttrium, europium and terbium are used to make the colors in your smartphone screen. Rare earths including samarium, praseodymium, dysprosium and terbium are used in missile guidance systems and fighter jets.

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The 17 rare earth elements aren’t really rare. They’re scattered throughout the earth’s crust. But deposits that are large and dense enough to mine economically are few and far between, and separating them from other elements can also be tricky.

Like with many commodities, China dominates the rare earth market, holding 90% of the globe’s processing capacity and making up 70% of mined production. One reason is that mining and processing these elements can harm the environment. So countries like the U.S. ceded that market to the Asian nation because of its lower environmental standards. Cheaper labor is another reason, as are government subsidies and the location of reserves. Globalization formed the backdrop, allowing countries to outsource their rare earth needs.

Rare earths have become a hot topic in the commodities world amid trade tensions between the U.S. and China, an increasing interest in natural resource security after Russia’s invasion of Ukraine, and the push around the world to build more green energy systems to help reduce greenhouse gas emissions.

This backdrop has increased the pressure on Washington to secure sources outside of China, whether that’s through building up parts of the rare earth supply chain in the U.S., or by securing partnerships with companies in friendly jurisdictions.

“There is a clear interest for many countries to develop sources outside of China,” says Darwei Kung, portfolio manager for commodities at DWS Asset Management. “Given the geopolitical tension and visibility, we expect countries outside of China to provide subsidies to maintain the mining ventures as ongoing concerns for some time to come.”

Earlier this year, the U.S. and Ukraine also signed a deal for reconstruction that included access to Ukraine’s deposits of rare earth elements.

Here are some rare earth metals-related stocks and ETFs to keep an eye on now:

— MP Materials Corp. (ticker: MP)

— Energy Fuels Inc. (UUUU)

— Lynas Rare Earths (OTC: LYSDY)

— Other ex-China rare earth companies

— VanEck Rare Earth and Strategic Metals ETF (REMX)

— Sprott Critical Materials ETF (SETM)

Rare Earth Stocks to Watch

MP Materials Corp. (MP)

In July, a U.S. mining company called MP Materials announced what it called a “transformational” deal with the U.S. Department of Defense to bulk up its ex-China supply chain for rare earth magnets.

The tech industry is following suit. The same month, MP Materials and Apple Inc. (AAPL) announced a $500 million deal where the mining company will supply the tech giant with magnets produced in Texas using recycled rare earth feedstock processed at a site in California.

MP Materials’ stock shot up after the announcements and remains elevated, so investors may want to use caution and wait for pullbacks before heavily investing in the company.

Energy Fuels Inc. (UUUU)

Another U.S.-based company investors can consider is Energy Fuels, a uranium producer that is also involved in rare earth production. In mid-August, the company said it successfully completed production of its first kilogram of dysprosium oxide at pilot scale at a facility in Utah from monazite mined in Florida and Georgia. Monazite is one of the rare-earth-bearing minerals that is mined before rare earths are separated and further refined. The company said multiple magnet and equipment manufacturers have expressed strong interest in obtaining samples for their own validation processes.

“Energy Fuels’ high-purity Dy oxide production is a major leap toward securing a U.S. supply of ‘heavy’ rare earth oxides for a variety of commercial and defense uses,” Energy Fuels CEO Mark Chalmers said in prepared remarks accompanying the announcement.

Rare earth elements are divided into “light” or “heavy” classifications generally based on their atomic weight. Heavy rare earth elements can fetch higher prices.

Last year, Energy Fuels commissioned a commercial-scale rare earth oxide production circuit at its Utah facility to produce neodymium-praseodymium oxide used in magnets for electric vehicles, robots, drones, wind energy and defense technologies.

Lynas Rare Earths (OTC: LYSDY)

Lynas Rare Earths is another ex-China rare earths player. In 2024, the company announced a 92% increase in mineral resources and a 63% increase in reserves at its Mt. Weld mine in Australia, with a significant increase in contained heavy rare earth mineralization.

Other Ex-China Rare Earth Companies

Other notable rare earth companies outside of China include Iluka Resources Ltd. (OTC: ILKAF), Arafura Rare Earths Ltd. (OTC: ARAFF), Mkango Resources Ltd. (OTC: MKNGF), Ucore Rare Metals Inc. (OTC: UURAF) and NioCorp Developments Ltd. (NB).

But mining is a difficult business. For one, it depends heavily on prices for the mined commodities, which are set globally and largely outside of miners’ control. Then, there are company-specific risks, including securing permits, mines not panning out as planned, accidents, weather affecting the output of specific mines, and management missteps, which can include ill-timed or overpriced acquisitions.

Rare Earth ETFs to Consider

To help hedge those risks, investors can turn to the exchange-traded fund market. ETFs, as they are known, are investment vehicles that trade on an exchange under a ticker symbol just like a stock but contain holdings in many different companies.

These funds offer diversification that spreads out the company-specific risk. That diversification comes with a potential performance penalty. Because the funds have exposure to so many different companies, they’re unlikely to perform as well as a single company that experiences some kind of catalyst for its shares, such as MP Materials with the Defense Department and Apple announcements.

VanEck Rare Earth and Strategic Metals ETF (REMX)

For rare earths, investors can consider the VanEck Rare Earth and Strategic Metals ETF. The fund has $687 million in assets under management, has been around since 2010 and is up about 50% year to date. That’s due in part to the surge in shares of MP Materials, which at more than 10% of net assets is the fund’s largest holding. REMX has an expense ratio of 0.58%, or $58 per year for every $10,000 invested.

Its No. 2 holding is China Northern Rare Earth Group High-Tech Co. Ltd. (600111.SS). The company is the biggest rare earth mining company in the world, making it an important consideration for rare earth investors. The miner is listed on the Shanghai Stock Exchange, but there aren’t American depositary receipts for it, making REMX an easy option for U.S. investors to get exposure to this rare earths juggernaut.

Sprott Critical Materials ETF (SETM)

The Sprott Critical Materials ETF is another fund investors can consider for a one-stop shop of rare earth investments. With an inception date of 2023, the fund is newer than the VanEck offering. Its top two holdings are MP Materials and Lynas Rare Earths. The fund has an expense ratio of 0.65% and is up about 40% year to date.

Both of these funds also contain companies that are primarily involved in producing other key commodities, such as lithium, that aren’t considered rare earth elements. So there are other market considerations investors should take note of.

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Rare Earth Metals: Stocks and ETFs to Watch originally appeared on usnews.com

Update 08/25/25: This story was previously published at an earlier date and has been updated with new information.