How to Invest in Rare Earth Metals

What are the types of rare earth minerals?

There are a number of ways to categorize and better understand rare earths, which will help you know which companies to invest in based on what they’re targeting.

For example, they are often divided into “heavy” and “light” categories based on atomic weight. Heavy rare earths are generally more sought after, but light REEs are important too.

Rare earths can also be grouped together according to how they are used. Rare earth magnets include praseodymium, neodymium, samarium and dysprosium, while phosphor rare earths — those used in lighting — include europium, terbium and yttrium. Cerium, lanthanum and gadolinium are sometimes included in the phosphor category as well. For a detailed breakdown of rare earth uses, check out our guide.

One aspect that is common to all the rare earths is that price information is not readily available — like other critical metals, rare earth materials are not traded on a public exchange. That said, some research firms do make pricing details available, usually for a fee, including Strategic Metals Invest, Fastmarkets and SMM.

What factors affect supply and demand for rare earths?

As mentioned, each REE has different pricing and supply and demand dynamics.

However, there are definitely overarching supply and demand trends in the sector. Most notably, China accounts for the vast majority of the world’s supply of rare earth metals. As the world’s leading producer, the Asian nation accounted for roughly 70 percent of rare earths production in 2024, or 270,000 metric tons (MT), with the US coming in a very distant second at 45,000 MT. After the US, Myanmar is the third largest rare earths producer with total output of 31,000 MT last year. On top of that, China is also responsible for 90 percent of refined rare earths output.

The strong Chinese monopoly on rare earths production has created problems in the sector in the past. For instance, prices in the global market spiked in 2010 and 2011 when the country imposed export quotas.

The move sparked a boom in global rare earth metals exploration outside of China, but many companies that entered the space at that time fell off the radar when rare earths prices eventually sank again. Molycorp, once North America’s only producer of rare earths, is a notable example of how hard it is for companies to set up shop outside China. It filed for bankruptcy in 2015. But the story didn’t end there — MP Materials (NYSE:MP), the company that now owns Molycorp’s assets, went public in mid-2020 in a US$1.47 billion deal, and a year later was a US$6 billion company.

MP Materials is now the western hemisphere’s largest rare earths miner, putting out high-purity separated neodymium and praseodymium oxide; a heavy rare earths concentrate; and lanthanum and cerium oxides and carbonates.

Concerns about China’s dominance are ongoing as the US/China trade war continues and as supply chain stability grows in importance. The Asian nation has tightly controlled how much of its rare earths products make it into global markets through a quota system initiated in 2006.

US President Donald Trump’s high tariffs targeting Chinese goods has resulted in China enacting further rare earth export restrictions. In April 2025, the Government of China placed strict export controls on samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium — all crucial for the production of electric vehicles, smartphones, fighter jets, missiles and satellites.

Sharing a border with China, Myanmar is the source of at least 70 percent of its neighbor’s medium to heavy rare earths feedstock. With that in mind, it’s not surprising that a temporary halt in Myanmar’s production in late summer of 2023 sent rare earths prices to their highest level in 20 months, as per OilPrice.com.

Myanmar’s rare earths production experienced further disruptions in late 2024 as the Kachin Independence Army seized two towns in Kachin state, near China’s Yunnan province, that are critical suppliers of rare earth oxides to China.

Outside of China, one of the world’s leading rare earths producers is Australian company Lynas (ASX:LYC,OTC Pink:LYSCF), which sends mined material for refining and processing at its plant in Malaysia. In 2023, Japan Australia Rare Earths, a joint venture between the Japan Organization for Metals and Energy Security and Sojitz (TSE:2768), inked an agreement to invest AU$200 million in the production and supply of heavy rare earths from Lynas.

This has allowed the mining company to expand its light rare earths production and begin production of heavy rare earths. Lynas brought its large-scale downstream Kalgoorlie rare earths processing facility online in November 2024. According to its H1 2025 fiscal year results, the company’s neodymium and praseodymium (NdPr) production volume increased by 22 percent.

In the US, MP Materials is making good use of US$58.5 million awarded in April to support construction of the first fully integrated rare earth magnet manufacturing facility in the US. The funding is part of the Section 48C Advanced Energy Project tax credit granted by the Internal Revenue Service, Department of Treasury and Department of Energy.

The Fort Worth, Texas, magnet facility began producing the NdFeB magnets crucial for EVs, wind turbines and defense systems at the start of 2025. First commercial deliveries are expected by the end of the year.

Looking at demand, many analysts believe the need for rare earths is set to boom on accelerating growth from top end-use categories, including the electric vehicle market and other high-tech applications.

As an example, demand for dysprosium, a key material in steel manufacturing and the production of lasers, has grown as countries increase their steel standards. Aside from that, rare earths have long been used in televisions and rechargeable batteries, two industries that accounted for much demand before the proliferation of new technologies. Other rare earth metals can be found in wind turbines, aluminum production, catalytic converters and many high-tech products.

As can be seen, securing rare earths supply is an increasingly important issue. In addition to traditional rare earths mining, there has been growth in the rare earths recycling industry, which aims to recover REE raw materials from electronics and high-tech products in order to reuse them in new ways.

Exploring and extracting rare earth materials from deep-sea mud is one of the newest recovery methods, although deep sea mining of mud and nodules comes with significant environmental concerns. However, it is gaining traction as more mining companies look offshore for resources and US President Trump pushes for fast tracking of deep-sea mining permits.