Rare Earth Stocks To Buy
US rare earths stocks The US is at the forefront in the race to secure stable supply of rare earths outside of China. While the nation has vast rare earths reserves and is the second largest global REE producer, the US is severely lacking in processing facilities. The US rare earths stocks looking to change that imbalance offer investors an opportunity to leverage the growth potential of this market.
rare earth stocks to buy
MP Materials is the largest producer of rare earths outside of China, with a focus on high-purity separated neodymium and praseodymium (NdPr) oxide, a heavy rare earths concentrate and lanthanum and cerium oxides and carbonates.
This includes financing the construction of Phase 1 REE separation infrastructure at the White Mesa mill, which will give Energy Fuels total rare earth oxide (TREO) capacity of 2,500 to 5,000 metric tons (MT) per year, including 500 to 1,000 MT per year of NdPr oxide or oxalate. It will also allow the company to advance the design, engineering and permitting of a planned Phase 2 crack-and-leach and REE separation facility with up to 15,000 MT of TREO capacity annually.
NioCorp Developments is developing its Nebraska-based Elk Creek project, a pure-play critical minerals project that the company claims hosts the highest-grade primary niobium deposit under development in North America; it is also capable of large-scale scandium production and is the second largest indicated-or-better rare earths resource in the US.
In May 2022, NioCorp released an updated feasibility study for Elk Creek. While the new model for mineral reserves and economics does not yet include any data on rare earths production, the report does feature a longer expected mine life, higher expected ore grades and tonnages and improved expected project economics for niobium, scandium and titanium production.
At its demonstration-scale processing plant, NioCorp is working to show that it can extract and separate REEs from ore that NioCorp expects to mine from the Elk Creek project site. The data is expected to help inform an updated Elk Creek project feasibility study that incorporates an economic analysis of separated rare earth oxide products and a simplified process flow sheet.
Mkango Resources is developing new sources of REEs, such as neodymium, praseodymium, dysprosium and terbium, for cleantech markets, including electric vehicles and wind turbines. Its main asset is the Songwe Hill rare earths project in East Africa's Malawi.
In 2021, Mkango reported that its subsidiary Mkango Polska has joined with Grupa Azoty Pulawy (WSE:ZAP) to develop a rare earths separation plant in Poland targeting 2,000 MT per year of separated NdPr oxides, as well as 50 MT per year of dysprosium and terbium oxides in a carbonate enriched with heavy rare earths.
Australia is one of the world's largest rare earths producers and hosts the fifth largest rare earths reserves. The country is home to the biggest non-Chinese rare earths supplier, which is also the largest Australian rare earths stock by market cap.
Lynas Rare Earths is the leading separated rare earths producer outside China. The company operates the Mount Weld mine and concentrator in Western Australia and sends mined material for refining and processing at its separation facility in Malaysia.
In 2021, the company received US$30.4 million in funding from the Pentagon to build a light rare earths processing facility in Texas, and earned another contract to build a heavy rare earths separation facility in the state. The project's completion will not only benefit Lynas, but also the rare earths industry in both Australia and the US. More recently, Lynas announced an investment of AU$500 million to fund its plans to boost production to 10,500 MT per year of NdPr products by 2025.
The company's Wimmera project in Victoria involves the mining and beneficiation of a fine-grained heavy mineral sands orebody in Victoria's Murray Basin for the potential long-term supply of zircon and rare earths.
Arafura Resources is another Australian rare earths company that has secured government funding to support project development. Arafura is developing its Nolans rare earths project in the Northern Territory.
The Nolans project is in the development phase with a definitive feasibility study, and contains all of the different rare earths; however, is highly enriched with neodymium and praseodymium. Arafura has secured a binding offtake agreement with Hyundai Motor (KRX:005380) and Kia (KRX:000270), in addition to a non-binding memorandum of understanding with General Electric Company's (NASDAQ:GE) GE Renewable Energy, to collaborate on the establishment of sustainable rare earths supply chains.
The best rare earth stocks are in the spotlight as the demand for strategic and rare earth metals has been on the rise. The increase comes in part on the back of rising consumer interest in green energy and electric vehicles (EVs).
For instance, the VanEck Rare Earth/Strategic Metals ETF (NYSEARCA:REMX), which provides exposure to businesses that focus on the mining, refining and manufacturing rare earth/strategic metals, has declined 12% since the beginning of 2022. By comparison, benchmark indices the S&P 500 and the Dow Jones Industrial Average are down 10.2% and 7.1%, respectively.
By technical definition, rare earth elements include 17 metallic elements, most of which come from the periodic table. They are widely used to make tech products, ranging from consumer devices to lasers and radar systems. These elements are especially crucial to the transition to a greener economy, as they are used in wind turbines and EV batteries.
Lithium is a vital component for Lithium-ion batteries used in EVs and consumer electronics. According McKinsey, the demand for lithium-ion batteries can increase at a CAGR of 30% over the next decade. Although lithium is not a rare earth metal, it gets significant attention due to its use in alternative energy technologies. A number of lithium companies are found in the REMX exchange-traded fund as well.
Our next pick is MP Materials (NYSE:MP), the largest producer of rare earth materials in the Western Hemisphere. In 2021, it supplied roughly 15% of the rare earth content consumed globally.
The rare earth miner currently ships more than 90% of its products to China for processing. However, it is upgrading two U.S. processing facilities. As a result, it should be able to provide separated rare earth oxides directly to end users and turn certain rare earth elements into alloy flakes and magnets. Wall Street will be keeping a close eye on how less reliance on China could could contribute to top line.
Under the latest White House budget request, the Defense Department would devote $341 million to partner with domestic companies to boost the defense industrial base and bring critical supply chains back to the U.S., including for rare-earth elements. In April, the U.S. Department of Energy awarded $19 million for 13 projects supporting production of rare-earth elements and critical minerals. In November, the Defense Department announced contracts and agreements with several rare-earth element producers.
Rare-earth elements are "a little bit of a light switch kind of investment," says Charles Lieberman, chief investment officer at Advisors Capital Management. "If the government wants it, it'll get turned on." With that framework in mind, here's what investors should understand about the rare-earth space:
Before delving into ways to invest in rare-earth elements, investors should remember that these metals are commodities, which means they're subject to the ups and downs in demand that economic cycles bring.
At the moment, you can't buy futures for rare-earth elements like you can with other commodities such as gold, copper, wheat or corn. So investors should seek exposure to the rare-earth industry using more conventional means.
The China Northern Rare Earth Group High-Tech Co. (ticker: 600111) mines the world's biggest rare-earth deposit, located in the Inner Mongolia region. Other publicly traded Chinese miners involved in the rare-earth industry include China Minmetals Rare Earth Co. (000831), Rising Nonferrous Metals Share Co. (600259) and Xiamen Tungsten Co. (600549).
One of the biggest of these is Malaysia-based Lynas Rare Earths (LYSCF), which extracts rare-earth elements from its high-grade mine in Australia and also processes rare-earth minerals. The Defense Department is contributing $30.4 million in matching funds for Lynas' separation facility in Hondo, Texas, where it's partnering with independent rare-earths processor Blue Line Corp.
Domestically, the only company mining and processing rare-earth elements is MP Materials Corp. (MP), which operates the Mountain Pass mine in California. From the 1960s until the mid-1980s, that mine made the U.S. the world's biggest producer of rare-earth elements.
Some rare-earth exploration companies include Rare Element Resources (REEMF), which has a mine in development in Wyoming; Texas Mineral Resources Corp. (TMRC), which is developing projects in Texas and Colorado; and Ucore Rare Metals (UURAF), which is working on a mine in Alaska. Defense Metals Corp. (DFMTF) is advancing its rare-earth element property in western Canada.
Meanwhile, NioCorp Developments (NIOBF) is advancing a Nebraska mine that will produce a rare-earth element as a byproduct. And Energy Fuels (UUUU), which currently produces uranium and vanadium, is working with Chemours Co. (CC) and Neo Performance Materials (NOPMF) on an ex-China rare-earth production and refining supply chain.
There is also the Dolefin Rare Earth Elements Fund, a Swiss mutual fund that invests in shares of rare-earth elements companies. Still, this fund also isn't a pure play, as its largest holdings include platinum group metals producers in addition to rare-earth producers.
Geomega Resources (GOMRF) says it's building the world's first sustainable rare-earths recycling facility to convert magnet production waste and end-of-life magnets into products usable by the renewable energy and electric vehicle industries. The company also owns a rare-earth deposit in eastern Canada. 041b061a72