Highlights

• Rare earth stocks have surged dramatically: MP Materials up 422%, Energy Fuels up 300%.
• Gains are driven by China's export restrictions and U.S. tariff threats.
• Geopolitical brinkmanship is a larger factor in the surge than stable fundamentals.
• Processing capacity, rather than mining, remains the critical bottleneck.
• China controls 85% of global refining capacity.
• New Western projects face years of permitting, capital costs, and environmental complexity.
• Long-term investors should focus on firms building refining, recycling, and magnet manufacturing within the U.S.-allied bloc.
• Investment should be aimed at long-term stability, not short-term trading volatility driven by tariff rhetoric.

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TheStreet’s Rob Lenihan opens with lyrical nostalgia—Rare Earth’s 1971 hit “I Just Want to Celebrate”—to frame a modern boom in rare earth stocks. It’s a clever hook, but the piece blends valid supply-chain facts with trading euphoria and political theater. Yes, China still dominates—producing about 70% of global rare earth ore and refining over 85%. Yes, investor enthusiasm has surged—MP Materials up 422%, Energy Fuels 300%, USA Rare Earth 142%. But as veterans of this market know, those numbers can vanish as fast as they appear. Rare earth equities rise and fall not only on fundamentals, but on rhetoric, rumor, and tariffs.

What’s Rock Solid

Lenihan rightly notes (opens in a new tab) that rare earths are essential to the modern economy—EVs, wind turbines, defense radar, guidance systems—and that processing, not mining, is the choke point. China’s export restrictions, expanding since April 2025, are indeed the most consequential trade measure since its 2010 Japan spat. Washington’s response, led by President Trump’s threats of 100% tariffs, is accurately reported. TheStreet also captures the crucial fact that both nations appear to be negotiating through brinkmanship: Beijing has yet to fully implement its revised export regime, and Washington has not imposed its threatened retaliatory tariffs.

Those caveats matter. Markets move on perception, not policy. For investors, this is a high-beta geopolitical story disguised as a commodity cycle.

Where the Story Slips

The suggestion that new non-Chinese mining will deliver “stable long-term returns” oversimplifies reality. Rare earth projects take years to finance and permit; separation plants are capital-intensive and environmentally complex. Without price stabilization mechanisms or allied offtake guarantees (topics TheStreet omits but Rare Earth Exchanges (REEx) has long championed), “stability” is aspirational.

Similarly, implying that Trump’s tariff tweets “wiped out $2 trillion in market value” lacks sourcing and proportion—broad index moves have multiple drivers. The piece also treats Beijing’s export curbs as unilateral coercion while ignoring China’s equally plausible motive: securing domestic value-added manufacturing amid global chip and magnet shortages.

The Real Signal Beneath the Noise

The real story isn’t short-term trading, it’s structural alignment. Allied supply-chain integration—U.S., Canada, Australia, Japan, South Korea, EU—remains the only path to dilute China’s grip. Investors should focus less on day-to-day tariff theatrics and more on which firms in the supply chain build refining capacity inside this emerging Western bloc. The next decade’s winners will be those that master _processing, recycling, and magnet manufacturing_—not just those digging ore.

Until then, traders may keep celebrating. Just don’t lose sight of the dollar bill before it flies away.

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