Top Rare Earths Companies to Watch in 2024

Headlines

• Rare earth elements are crucial for modern technology and the expanding electric vehicle sector.
• Nations like the US, Canada, and Australia are increasing efforts to secure their rare earth supply chains due to China's dominance.
• Recent developments include new tariffs and regulations affecting rare earths, impacting companies worldwide.

Rare earth elements (REEs) are essential for various advanced technologies, including smartphone cameras and defense systems. Their importance extends to the electric vehicle (EV) industry, where elements like neodymium and praseodymium are critical for permanent magnet synchronous motors used in EV drive trains. Investing in metal and mining stocks that focus on REEs could be pivotal due to their crucial role in these high-demand technologies.

China currently leads in rare earth production and reserves, driving other countries, such as the US, Canada, and Australia, to enhance their mining and processing capabilities. This push is intensifying with the upcoming US tariff on Chinese rare earth magnets, set to begin in 2026. This 25 percent tariff, announced in May 2024, is designed to shield American industries and foster domestic production. It will impact sintered neodymium-iron-boron (NdFeB) magnets, which are vital for EV motors and wind turbines.

The inclusion of rare earth magnets in the US tariffs marks a significant shift in the US-China trade dynamics and aligns with broader goals to strengthen US energy and national security. Concurrently, the European Union is also taking steps to reduce its dependence on Chinese rare earths. A new law, enacted in May, aims to substantially boost domestic production of critical minerals, including rare earths, by 2030, which could impact various sectors, including automobile stocks reliant on these materials.

In response to these shifts, China’s State Council has introduced stricter regulations on its rare earth resources, effective October 1, 2024. These regulations will tighten control over mining, smelting, and trading of rare earth elements and prohibit the export of extraction and separation technology.

These global changes present significant developments for rare earth stocks, especially those operating outside China. The following are some of the leading companies in the rare earth sector, based on market capitalization and their operations on major stock exchanges as of August 6, 2024:

1. MP Materials

MP Materials stands as the largest rare earth producer outside China, focusing on high-purity neodymium and praseodymium oxides, as well as other rare earth products. The company acquired the Mountain Pass mine, the only active US-based rare earths mine, and is increasing its production capacity. MP Materials is also set to establish the first fully integrated rare earth magnet manufacturing facility in the US by late 2025.

2. Energy Fuels

Energy Fuels is a leading player in both uranium and rare earths. It operates major uranium production centers and has recently completed Phase 1 of its rare earth separation infrastructure. The company is now commercially producing separated neodymium-praseodymium and plans to expand its rare earths production. It has also acquired new sources of monazite sand and entered into a joint venture to bolster its supply chain.

3. NioCorp Developments

NioCorp Developments (NASDAQ:NB) is advancing its Elk Creek project in Nebraska, known for its high-grade niobium deposit and potential scandium production. Recent tests show promising results for producing high-purity magnetic rare earth oxides. The company is exploring integrating rare earth magnet recycling into its operations and assessing new technologies to enhance its project’s sustainability and efficiency.

These companies reflect the evolving landscape of the rare earth industry and the growing efforts to diversify and secure supply chains amidst global regulatory changes and economic pressures.