Highlights
- China's rare earth market dominance extends far beyond mining, controlling over 90% of separation, refining, and magnet manufacturing through strategic state intervention.
- Rare earth investing requires understanding complex geopolitical risks, infrastructure challenges, and systemic market instability beyond simple commodity trading.
- Retail investors must track midstream refining capacity, government policy shifts, and supply chain dynamics rather than relying on surface-level stock recommendations.
Rare Earth Exchanges (REEx), the leading investor intelligence platform for the rare earth element (REE) market, welcomes broader financial media coverage of critical mineral investing. But the February 2025 U.S. News & World Report (opens in a new tab) article titled "Rare Earth Stocks: How to Invest in Rare Earth Elements" by Matt Whittaker, while informative in tone, misses the mark on two fronts: the true nature of China’s dominance and the strategic and geopolitical complexity facing Western REE investors.
Retail investors deserve more than periodic-table nostalgia and stock ticker summaries—they need a rigorous understanding of how China's state-directed industrial policy shapes pricing, supply risk, and the fragility of Western rare earth ambitions.
China’s Control Goes Far Beyond Mining
The U.S. News article acknowledges China’s dominance but primarily frames it in terms of supply risks in mining and refining. In reality, the Chinese Communist Party (CCP), via state-owned and state-supported enterprises, controls not just upstream mining (~60% of global rare earth ore output in 2024), but over 90% of midstream separation and refining and the vast majority of downstream magnet manufacturing, especially neodymium-iron-boron (NdFeB) permanent magnets used in electric vehicles, wind turbines, defense systems, and industrial robotics.
This is not a normal market—it’s a strategically engineered chokehold. Chinese pricing power is weaponized through supply gluts, export restrictions, and opaque subsidies that regularly undercut Western producers. This isn’t speculation—it’s been happening for two decades, with the 2010 Japan rare earth embargo serving as just one example.
Yet U.S. News does not mention the Chinese state’s coordinated role in protecting its monopoly, nor does it warn investors of the deliberate destruction of foreign competitors through predatory pricing cycles. The framing around MP Materials (NYSE: MP) and Lynas Rare Earths (OTC: LYSDY) is overly optimistic unless their vertically integrated ambitions are fully backed by consistent state support—something only beginning to happen in the U.S., Australia, and Canada.
Investing Isn’t Just About Ore—It’s About Infrastructure and Alliances
U.S. News offers a concise list of junior and mid-tier companies for investors, many of which are still pre-revenue or in the exploration stage. Yet it fails to warn investors about the infrastructure and permitting bottlenecks that plague REE development in North America and Europe.
For example:
- MP Materials still sends partially processed concentrate to China for final separation—undermining claims of true supply chain independence. Although the company, during the trade war, announced it would cease this activity.
- Lynas’ U.S. refining plant in Texas, funded by the U.S. Department of Defense, is years away from being operational—and faces domestic political and environmental scrutiny.
- Companies like Energy Fuels (NYSE American: UUUU) and Ucore (OTC: UURAF) are promising but face years of development and technology validation before they can contribute meaningful commercial volumes.
None of this is disclosed in the article’s investment advice section. The retail investor is left assuming that owning a few REE stocks is a way to ride the “AI and EV” wave. In truth, rare earth investing is not just about demand signals—it is about navigating an intentionally fragmented, capital-intensive, geopolitically fraught landscape.
On Risk: Too Shallow
U.S. News briefly notes that rare earth mining is risky, capital-intensive, and volatile—but it underplays the systemic risk created by China's retaliatory power. Beijing’s April 2025 export restrictions on terbium and other HREEs demonstrate its willingness to flex that power when threatened. These actions are not just commercial—they are geopolitical acts of coercion. Retail investors should understand that a tweet from the Chinese Ministry of Commerce can reshape entire pricing structures and reorder global supply contracts overnight.
That is not “volatility”—that is strategic instability.
Misaligned with the Market Reality
The article recommends allocating up to 1% of a portfolio to REEs within a broader commodities strategy. That’s reasonable—but it treats rare earths as just another commodity class, akin to copper or silver. This overlooks their strategic and industrial policy status in every major economy, including the United States, China, and the European Union. These elements don’t just track supply-demand curves; executive orders, defense priorities, and export controls govern them.
Final Verdict--A Start, But Retail Investors Deserve More
Rare earth elements are not a passing trend—they are the material bedrock of 21st-century power projection, from quantum computing and hypersonics to battery storage and AI. Yet U.S. News & World Report reduces the market to a handful of stock tips and platitudes about “clean energy.”
REEx urges retail investors to go deeper:
- Track midstream refining capacity, not just exploration.
- Monitor shifts in government policy and news related to export controls.
- Understand that China’s dominance is systemic, not incidental, pay attention to pricing and other moves.
- Invest in supply chains, not just drill results.
This is not just a market—it’s a battlefield of industrial strategy and geopolitical resilience. Pay attention to the Rare Earth Exchanges Forum (opens in a new tab) as well as the Project Ranking tools. Currently, the rankings for NdPr rare earth (light) mines. REEx will offer other rankings, including heavy rare earth element mines, midstream processing companies, as well as downstream manufacturers, recycling technologies, and ventures.
About Rare Earth Exchanges
Rare Earth Exchanges (REEx) delivers investor-focused news, analysis, and data on global rare earth markets, technologies, and geopolitical supply chain risks. REEx is developing a suite of tools to help the retail investor navigate rare earth element and critical mineral supply chains, upstream, midstream, and downstream. Based in the United States, REEx serves retail and institutional investors, industry professionals, and policy leaders shaping the future of critical minerals. See discussions on various topics at the REEx Forum (opens in a new tab).
Lynas the largest producer outside of China will be opening a processing plant in Texas later this year or early next. Also, MP Materials has a mine and is retrofitting its processing plant for start-up. President Trump made REE’s national security issue during his first administration and awarded taxpayer funds to Lynas and MP Materials to start producing and processing in America. You can buy stock in both of these companies.