Even if you’ve never heard of rare earth elements (REE), you probably use them in your daily life. Rare earth metals are essential for the development of many high-tech and industrial products.
Some of these products include personal computers, flat screen TVs, and electric vehicles.
Historically, China has been the largest producer of rare earth metals, but many other countries have started to increase production in recent years.
Investing in rare earth stocks is a great way to benefit from the recent growth of this sector. These companies mine and process these materials so they can sell them to manufacturers.
We’ve rounded up some of the top rare earth stocks on the market right now to add to your portfolio.
Best Rare Earth Stocks To Buy
MP Materials (NYSE: MP)
MP Materials is a rare earth company based in Las Vegas, Nevada.
This company is significant because they own the Mountain Pass Mine in San Bernardino County, California, which is the only operating rare earth mine in the U.S.
This stock formed out of a SPAC, which purchased the Mountain Pass Mine and related assets in 2017. MP Materials went public in early 2020.
Tensions between China and the U.S. in recent years have illustrated the importance of having a supply of rare earths resources in the States.
In 2019 and 2020, the Mountain Pass Mine produced approximately 15 percent of the world’s rare earth elements.
Financially, MP Materials is likely to do quite well this year. Analyst consensus estimates for this year indicate significant year-over-year earnings growth.
There have been some reports that the Biden administration could impose tariffs on Chinese rare earth metals in the future.
As the only rare earth mining and processing operation in the U.S., this would be hugely beneficial for MP Materials.
So far, this stock has performed quite well in 2021, although it is down slightly from its peak in March.
MP Materials has been very consistent in beating their earnings and revenue estimates. This indicates that the company is on a consistently positive trajectory.
The U.S. is going to need access to a supply of rare earths resources regardless of our relationship with China and other countries. This is why MP Materials could be a smart pick moving forward.
VanEck Vectors Rare Earth/Strategic Metals ETF (NYSE: REMX)
This investment isn’t actually a stock – it’s an exchange-traded fund that contains many of the world’s top rare earths companies.
This ETF contains rare earth companies from China as well as many other parts of the world.
It also contains companies that focus on other metals and minerals.
ETFs are usually a relatively low-risk investment in the long-term. Because they contain many different stocks, they aren’t as volatile as investing in one individual stock.
While this isn’t a rare earths pure play, it could still be a good way to put some rare earths exposure into your portfolio.
This ETF also contains other metals that are in very high demand right now, like cobalt and lithium.
There has been a lot of hype among investors about rare earths this year. This ETF has been performing quite well as a result.
After a slight dip in September, this ETF has bounced back to reach year-long highs.
Because the success of rare earths companies is so heavily affected by global politics, it’s hard to know exactly what’s going to happen.
For example, many of the world’s leading rare earths providers are in China.
American investors are often skeptical of Chinese stocks because of political tensions with the U.S. and other world powers.
However, these resources have become essentials, which bodes well for the future stability and growth of this ETF.
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Rare Earth Metals Stocks
Materion Corporation (NYSE: MTRN)
Materion Corporation is a U.S.-based company that produces advanced engineering materials.
These materials are made from rare earths products and include precious and non-precious metals, alloys, ceramics, inorganic chemicals, and more.
What makes this company exciting is the broad range of industries they supply, which include defense, semiconductor, auto, consumer electronics, energy, and more.
Although this company does not mine for rare earths themselves, they serve as an essential middle step in the production process.
Since this company has a very steady stream of business in a variety of different industries, they’re able to pivot during tricky economic times.
Materion has recently acquired a portfolio of electronic materials from a company called H.C. Starck.
This is particularly helpful right now, as Materion can sell these materials to semiconductor manufacturers.
The world is expecting a shortage of semiconductors sometime in the next few months due to high demand and supply chain issues.
As a result, the price of semiconductors is very high. Doing business with semiconductor manufacturers could be very lucrative for Materion.
Materion’s subsidiary, Brush Wellman, has consistent government contracts because of its beryllium supply.
These defense contracts are consistent and lucrative, which bodes well for this company’s financial future.
Materion’s second-quarter earnings report handily beat analysts’ expectations.
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They also carry a relatively small amount of debt, which sets them up well financially for the future.
Australian Strategic Materials Ltd. (OTC: ASMMF)
ASM is an Australian company that mines and produces rare earths as well as a number of other metals.
This company formed as the result of a demerger. They used to be part of Alkane Resources, which produces gold and a number of other metals.
They went public on their own in mid-2020 and have seen consistent share growth since then.
They own the Dubbo Project, which is a rare earths mine in Australia.
While this mine is not yet operational, Australian Strategic Minerals aims to have it in production by 2023.
They also manufacture a range of metal alloys and have been praised for their sustainability and technological innovation.
By operating in both mining and metal development, Australian Strategic Materials is setting themselves up to have two reliable streams of income in the future.
Developing rare earths outside of China can also give this company a greater range of potential international clients in the future.
Rare Earth Mining Stocks
Lynas Rare Earths Ltd. (OTC: LYSCF)
Lynas Rare Earths is one of the biggest rare earth production companies that is not based in China. They are currently based in Malaysia.
Right now, Lynas Rare Earths has a mine in Western Australia and production facilities in Malaysia.
They’ve also started a project that will build a processing facility in Western Australia near their mine.
Lynas produces a variety of rare earth minerals, most notably neodymium, which is used in magnets.
By operating outside of China, Lynas has opened themselves up to potential deals with the U.S. and other countries.
In fact, Lynas will be partnering with an American processor called Blue Line Corp to build a separation facility in Texas.
This project is funded by the Department of Defense and should provide a strong income stream for the company.
Lynas Rare Earths stock has been performing very well this year.
While the stock has been somewhat volatile, shareholders have still seen returns of over 165 percent since last fall.
If Lynas Rare Earths continues to make lucrative deals with the United States, it is possible that this trend will continue.
Texas Mineral Resources Corp. (OTC: TMRC)
Right now, the Mountain Pass Mine in California is the only rare earths project in the U.S., but Texas Mineral Resources Corp. is working to change that.
They are working with another organization called USA Rare Earth to develop a rare earths project in Texas.
They hope to have the Round Tops project fully operational in the first half of this decade. This would give the US a huge new source of rare earths and minimize reliance on other countries for these essential materials.
Right now this stock is somewhat speculative, as it will be several years before the mine is fully operational.
Shares have risen sharply during October, increasing by over 40 percent in just one week.
However, there doesn’t appear to be any specific news driving this growth. It wouldn’t be a surprise to see more volatility with this stock while the Round Tops project is still in the early development phase.
However, it’s hard to understate the need for more rare earth production in the U.S., which is what makes this company an exciting investment opportunity.
Rare Earth Minerals Stocks
Neo Performance Materials (OTC: NOPMF)
Neo Performance Materials is a global rare earths company based in Toronto, Canada.
They have a rare earths processing facility in Estonia as well as manufacturing facilities in countries around the world.
Neo Performance Materials has a huge portfolio of innovative products and technology.
They are particularly well known for their magnets and magnetic powders, but they also make a wide range of rare metal and chemical products.
Because they have such a wide range of products, they have exposure to a huge variety of industries.
Neo’s most recent earnings report was a very strong one. As COVID-19 restrictions came to an end, they were able to increase their production output.
Their revenue was up by over 44 percent year over year, and they were able to maintain a significant cash reserve of over $55 million.
Neo’s stock has performed very well this year, as their products are in very high demand.
Many of their customers are auto manufacturers, who are starting to ramp up production again after struggling with COVID-19 restrictions for well over a year.
Rare Earth Penny Stocks
China Rare Earth Holdings Ltd. (OTC: CREQF)
China has been the global center of rare earth processing for many years. While the country has limited the amount of rare earth exports recently, there are many rare earth companies still operating there.
China Rare Earth Holdings is a holding company based in Hong Kong.
They have many subsidiaries that produce and manufacture rare earth elements as well as refractory products.
During the Trump administration, tensions between China and the U.S. had negative effects on stocks like China Rare Earth Holdings.
However, the Biden administration has indicated a willingness to work with China to get access to more essential rare earth exports, albeit with the potential for added tariffs.
Since this stock is currently trading for less than $1 per share, investors should be cautious with it.
Stocks with prices this low are often subject to greater volatility due to low trade volumes.
Some Chinese electric vehicle companies have also lowered their production output in recent months. Since these EV manufacturers purchase directly from suppliers like China Rare Earth Holdings, this could have a negative effect in the short term for this company.
However, if you’re willing to take a risk with rare earth metals, this Chinese penny stock could be an option for you.
The reality is that the rest of the world will still be relying on China’s rare earth production for years to come.
Arafura Resources Limited (OTC: ARAFF)
Arafura Resources is a mineral exploration company based in Perth, Australia.
This is one of the few mineral exploration companies focusing entirely on rare earths right now.
As long as we continue to need personal electronics and other forms of technology that require rare earths, we’re going to need to consistently look for more deposits and develop them. This is why mineral exploration companies are so important.
Arafura Resources currently runs the Nolans Rare Earth Project, which will produce rare earths as well as uranium once it is fully developed.
This is another stock that is currently trading for well under $1, so investors will need to be mindful of potential volatility.
However, this stock also has the potential to break out when their flagship project becomes fully operational.
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Should You Buy Rare Earth Stocks?
Rare earth stocks are a great option for investors right now. Global demand for these materials has increased significantly over the last few years.
In particular, the electric car industry is really taking off as consumers are looking for eco-friendly transportation options.
Since electric cars require rare earth elements for production, these rare earths companies are going to benefit heavily from the increased demand for these cars.
Rare earth elements are also used in a variety of other essential items, ranging from personal electronics to defense systems.
This gives rare earth companies a wide variety of potential buyers in different industries.
Having multiple revenue streams can somewhat insulate these companies from the ups and downs of the market, making them a better long-term investment.
Demand for rare earth metals isn’t going away anytime soon, which is why now is an excellent time to invest in the rare earth companies that are developing them.
Rare Earth Stocks: Final Thoughts
If you want to invest in the growing electric vehicle industry, but aren’t quite ready to buy into risky startup manufacturers, buying rare earths stocks could be a good option instead.
Rare earth materials are part of so many essential products right now. Production is also increasing as COVID-19 restrictions let up around the world.
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