Highlights
- Upstream rare earth miners like Lynas and MP Materials saw significant stock gains amid China’s export restrictions and global supply chain diversification efforts.
- Processing and magnet manufacturers experienced mixed outcomes, with stock performance heavily influenced by geopolitical tensions and pricing volatility.
- Policy support, international partnerships, and emerging recycling technologies are reshaping the rare earth market, offering potential long-term investment opportunities.
Rare earth equities have seen a rollercoaster performance in the first half of 2025, driven largely by geopolitical supply shifts and booming demand for electric vehicles (EVs) and clean energy. Early in the year, China’s curbs on rare earth exports amid a trade war with the U.S. sparked a speculative surge in rare earth prices and mining stocks. By mid-year, tentative trade truces and at least the start of new export licenses from Beijing reversed some of those gains. This report examines the year-to-date stock performance of rare earth companies across the supply chain – from upstream miners to processors, magnet manufacturers, and even recyclers – and the catalysts and fundamentals driving investor sentiment worldwide.
Upstream Miners Rally on Supply Fears
Geopolitical supply fears ignited a rally in rare earth mining stocks in early 2025. As Rare Earth Exchanges (REEx) chronicled, in April, China – which produces ~90% of the world’s rare earths – imposed strict export controls on these strategic minerals in retaliation to U.S. tariffs. This stoked fears of shortages for critical elements like neodymium and dysprosium, which are vital for EV motors, wind turbines, and defense systems. What’s driving investors to bid up the sector? How about bets that less product coming out of China leads to higher prices.
Chinese rare earth majors surged: China Northern Rare Earth Group (opens in a new tab) (Shanghai: 600111), the world’s largest light rare earth producer, saw its Shanghai-listed shares climb roughly 24% year-to-date. The company’s fundamentals also impressed – first-quarter 2025 revenue jumped 61% and net profit soared 727% year-on-year to \431 million, thanks to higher praseodymium-neodymium prices and lower input costs as cited in REEx.
This staggering profit surge underscores how supply-driven price spikes directly boosted Chinese miners’ earnings. However, it also belies a more complex picture: analysts noted that actual downstream demand remained tepid, with much of the price rally driven by inventory building and sentiment as cited by both REEx and Discovery Alert (opens in a new tab). Outside China, Western rare earth miners enjoyed even larger stock gains. Australia’s Lynas Rare Earths (ASX: LYC) – the largest producer outside China – saw its share price jump over 50% by mid-June per a Market Beat (opens in a new tab) report.
Lynas hit a two-year high of A$9.20 in early June (a 12% intraday spike (opens in a new tab)) after global automakers warned that China’s export curbs could “lead to production delays” in the auto industry. Investors viewed Lynas as a strategic hedge against Chinese supply risk.
In the U.S., MP Materials (NYSE: MP (opens in a new tab)) – owner of Mountain Pass, America’s sole rare earth mine – has been a star performer. Referred to by REEx as a national treasure trove, MP’s stock more than doubled in 2025, up over 100% year-to-date by late June as noted via Investopedia (opens in a new tab). Notably, it rocketed 52.7% higher (opens in a new tab) in June alone as the rare earth trade dispute dominated headlines. Early in June, the lack of a China-U.S. export agreement signaled MP would benefit from domestic supply needs, while later in the month analyst upgrades (e.g., Morgan Stanley’s $34 target) on hopes of a trade truce also lifted the stock.
This seemingly contradictory drivers reflect how MP has been seen as a winner in either scenario – benefiting if Chinese supply stays restricted (making its output crucial) and also if trade tensions ease (allowing MP to resume shipping concentrate to China and receive near-term revenues).
Even after a 7% pullback on news of a U.S.-China rare earth deal in late June, MP was still up over 100% in 2025.
The rally has extended to junior miners globally. Explorers like Australia’s Arafura Rare Earths (opens in a new tab) (ARU: AX) and developers in Africa, Canada, and Greenland saw renewed investor interest as governments in the U.S. and EU offered incentives for new rare earth projects. However, not all miners have thrived – for instance, shares of USA Rare Earth (a U.S. startup aiming to build a magnet supply chain) whipsawed.
But back to Arafura Rare Earth which has prolific rare earth investor Gina Rinehart (opens in a new tab) (Hancock Prospecting (opens in a new tab)) as a key holder, the firm experienced a volatile but noteworthy year in 2025. With its stock currently trading at A$0.20 as of July 4, up 8.1% on the day. Despite ongoing fluctuations typical of ASX-listed penny stocks, Arafura has remained a frequent pick in speculative investor circles, consistently featured in “stocks to watch” lists over the past six months. While year-to-date performance has been mixed, the company retains long-term appeal due to its strategic Nolans Project in Australia and growing relevance amid global rare earth supply chain diversification efforts. However, near-term momentum has been constrained by market uncertainty and financing-related headwinds.
Australia based Lynas Rare Earths (opens in a new tab) (LYC.AX), ranks number one on the REEx light rare earth Projects Rankings database. Lynas Rare Earths has delivered a strong performance in 2025, gaining approximately 28.6% year-to-date and significantly outperforming the ASX 200. The stock surged in early June—up nearly 12% in one day—on heightened investor interest following China’s rare earth export restriction concerns, peaking at A$9.20 before settling into the A$8.20–8.40 range in July. While recent volatility saw a ~10% pullback from its high, Lynas remains well above its January levels, supported by robust long-term demand and geopolitical tailwinds, though analysts caution a potential near-term consolidation
After early gains, USA Rare Earth’s stock fell into negative territory for 2025 following an 11% plunge on the trade deal news (China pledging to resume exports). This divergence shows that established producers with revenue (like Lynas and MP) have outperformed more speculative names when the narrative shifted from scarcity to rapprochement.
Processing and Magnet Makers–Mixed Outcomes
China dominates the global REE processing and refining industry through a small group of powerful state-backed companies. At the core is China Rare Earth Group Co., (opens in a new tab) a government-created mega-conglomerate formed in late 2021 by merging several key state-owned enterprises (including China Minmetals (opens in a new tab) Rare Earth, Chinalco Rare Earth, and Ganzhou Rare Earth Group). This group oversees the majority of the country’s heavy rare earth separation and refining, particularly in Jiangxi Province.
The above mentioned China Northern Rare Earth Group, another major player, controls most of the rare earth mining and separation activities in Inner Mongolia and is a major light rare earth producer. These two groups, alongside Grirem Advanced Materials Co. (opens in a new tab), Zhongke Sanhuan (opens in a new tab), Yongxing Special Material (opens in a new tab)s (Shenzhen: 002756) and Rising Nonferrous Metals (opens in a new tab) (Shanghai: 600259), exert oligopolistic control over the midstream of the rare earth supply chain—from oxide refining to alloy production.
It's important for retail investors outside of China to understand that together, the companies mentioned above (many again state owned) benefit from government mandates, export quotas, and technology transferrequirements that have kept much of the value chain in China. Theirdominance is reinforced by vertically integrated operations, scale, and state support, making China virtually unrivaled in REE refining capacity and global pricing power. The performance of companies further down the supply chain – processors and magnet manufacturers – has been more mixed. Rare earth oxides and metals must be separated and refined for end use, and a handful of firms outside China are engaged in this midstream segment. Deemed a key part of the bottleneck, the “ex-China” rare earth element supply chain depends on the health and success of companies in this segment of the supply chain.
Neo Performance Materials (opens in a new tab) (TSX: NEO), a Toronto-listed firm that produces separated rare earth oxides, alloys, and magnets (with plants in Estonia and Thailand), reported strong fundamentals. Neo’s Q1 2025 adjusted EBITDA jumped 59% year-on-year (opens in a new tab) as it capitalized on higher magnet material orders and operational efficiencies. Its stock price has trended upward this year, though moderately compared to upstream miners.
Rare earth magnet manufacturers have faced a tougher environment. Permanent magnet makers were squeezed by the surge in praseodymium-neodymium costs, as many could not fully pass on those input price increases to customers. For example, China’s JL Mag Rare-Earth Co. (opens in a new tab) (HK: 6680) – a leading magnet producer – saw its Hong Kong-listed stock jump with the rare earth price rally, but it fell 3% in early July on news of potential supply normalization. Industry reports indicate that magnet orders did not spike in line with rare earth prices – downstream manufacturers remained cautious, largely buying hand-to-mouth and delaying big orders due to the price volatility per _[Discovery Alert](https://discoveryalert.com.au/news/rare-earth-price-rally-2025-manufacturer-sentiment/# (opens in a new tab)::text=Market%20analysts%20observe%20that%20while,genuine%20increases%20in%20industrial%20consumption) and several other media including REEx_ citations.
While rare earth element processing in USA remains limited, there will be more and more activity, particularly under the Trump administration (all the executive orders, memoranda etc.) and trade war tension with China. Companies such as Energy Fuels (opens in a new tab) (UUUU) are processing rare earths at their White Mesa Mill in Blanding, Utah (opens in a new tab). They recently commissioned a Phase 1 rare earth separation circuit, capable of producing 1,000 metric tons of separated neodymium-praseodymium (NdPr) per year. The company is also planning future expansions (Phases 2 and 3) to increase NdPr production to 4,000 to 6,000 metric tons per year, and to produce other separated rare earth elements like dysprosium (Dy) and terbium (Tb).
This sentiment-driven disconnect means magnet makers haven’t enjoyed the same sustained stock euphoria as miners. In Japan and Europe, many magnet makers are divisions of larger companies (Hitachi Metals’ successor Proterial (opens in a new tab), Vacuumschmelze, (opens in a new tab) etc.), so their stock impact is diffuse. That said, new Western magnet ventures are underway.
For example the U.S. subsidiary of Vacuumschmelze, e-Vac Magnetics is developing a magnetics plant in SouthCarolina (opens in a new tab). MP Materials is building a U.S. magnet factory in Texas(with capacity to produce finished NdFeB magnets by end of 2025) as part of its vertical integration. REEx suggests that once operational, this magnet capability could be a game-changer for MP’s margins and for helping to break China’s near-monopoly on magnet production.
The company inked a deal with General Motors to produce magnets. The Las Vegas-based firm also inked a memorandum of understanding with Saudi Arabia’s state owned firm– Ma'aden (opens in a new tab).
Recycling and Policy Catalysts—Some New Frontiers
Amid the 2025 rare earth upswing, recycling and new processing initiatives have emerged as key strategic themes, though their impact on stock performance is only just beginning. In an effort to supplement mined supply, companies are developing technologies to recycle rare earth magnets from end-of-life electronics and motors.
One notable milestone: in the UK, a partnership led by Mkango Resources (opens in a new tab) launched Europe’s first commercial rare earth magnet recycling plant in Q1 2025. Mkango’s HyProMag facility in Birmingham (opens in a new tab) is targeting ~100 tonnes per year of NdFeB magnet output using novel hydrogen-based recycling technology.
Similar pilot plants are being commissioned in Germany (supported by EU grants) and a larger U.S. recycling hub is planned for 2025–26. While Mkango (AIM: MKA) is a small-cap and its stock has been relatively flat, these developments position it – and its partner CoTec Holdings Corp (opens in a new tab) (CoTec) – as pioneers in what could become a significant supplementary source of rare earths. Large automakers and wind turbine manufacturers are also backing recycling consortia, which could gain traction if high rare earth prices persist.
Meanwhile, policy support and international partnerships have been moving stocks. As REEx chronicles, governments worldwide are investing in rare earth supply chains to reduce dependence on China. In the U.S., the Department of Defense and Department of Energy have funded projects like Lynas’s heavy rare earth separation plant in Texas and Energy Fuels’ rare earth processing at White Mesa, Utah. Lynas in May achieved its “first separated heavy rare earths production”, producing terbium and dysprosium oxides at its Malaysian facility– an important step toward offering a full suite of magnet materials outside China.
In Saudi Arabia, MP Materials inked a joint venture with Ma’aden (Saudi’s mining company) to develop a rare earth oxide and metal supply chain, underscoring the global scramble for processing capacity. These strategic moves haven’t dramatically lifted stock prices yet, but they strengthen fundamentals and long-term growth prospects.
Although privately held, startup Phoenix Tailings (opens in a new tab)—a MIT spinoff and U.S.-based cleantech startup extracting critical metals—including rare earth elements, nickel, and iron—from mining waste (“tailings”) using a proprietary, carbon-neutral, zero-toxic-waste process.
Founded by MIT alumni, the company combines recyclable solvent‐based extraction with molten-salt electrochemical refining to retrieve metals like neodymium and dysprosium—essential for EVs, wind turbines,and electronics—without producing hazardous byproducts. Eying anIPO within a few years, the company as reported in REEx seeks to expand from 40-ton to 4,000-ton annual capacity.
Policy-driven demand is also playing a role. The EU’s Critical Raw Materials Act and the U.S. Inflation Reduction Act both incentivize sourcing rare earths from friendly jurisdictions, which indirectly benefits non-Chinese producers. Notably, European automakers sounded alarms over rare earth supply risks this year, with some reporting temporary production line stoppages due to materials running out. This has prompted talk about stockpiling and sourcing diversification, a trend that bodes well for emerging producers and recyclers in the West.
ETFs and Market Sentiment
The volatile narrative around rare earths is perhaps best captured by the fate of sector-focused ETFs. The broad-based VanEck Rare Earth/Strategic Metals ETF (REMX) (opens in a new tab) – which holds a mix of rare earth miners and other critical metal stocks – had a modest +2% return by late June per the American Association of Individual Investors (opens in a new tab). Early in 2025, REMX was dragged down by weakness in lithium and minor metals despite rare earth miners’ strength, but it rebounded alongside the rare earth rally in Q2.
In contrast, a niche Optica Rare Earths & Critical Materials ETF (CRIT) (opens in a new tab) did notsurvive long enough to see the rally – it was liquidated in March 2025 due to low assets. The closure of CRIT, just as rare earth stocks were about to surge, highlights how out-of-favor the sector was before geopolitical catalysts hit. It serves as a reminder that sentiment can shift rapidly: by June, rare earths were back in the limelight, with higher trading volumes and renewed retail and institutional interest.
Investor enthusiasm, however, remains tempered by recognition of the sector’s intrinsic volatility, dominant Chinese position and lack of industrial policy to mitigate profound and myriad risk to investors.
Rare earth prices themselves have been highly unstable – praseodymium-neodymium oxide jumped to around \445,000/tonne in mid-2025 (reflecting a big increase from late 2024 levels) driven by panic buying and strategic stockpiling. Yet analysts note that many price quotes rose more than actual transaction volumes, signaling a sentiment-driven spike that could retrace if end-user demand doesn’t keep up suggests Discovery Alert (opens in a new tab) in Australia.
By July, some magnet alloy prices started to level off, and rare earth equities likewise gave back a portion of gains. The fade in late June – when China and the U.S. struck a framework to end their trade war, with China agreeing to review rare earth export applications – demonstrated how sensitive these stocks are to policy news. But REEx reminds all, the tension has not gone away and the supposed rare earth deal as part of USA and China discussions represents more an agreement to keep working on a more formal trade structure.
Shares ofChinese producers and MP Materials both dipped on the deal announcement, though MP remained dramatically up year-to-date.
Conclusion
As of mid-2025, rare earth stocks have delivered strong returns overall, albeit with high volatility and divergent winners and losers. Upstream miners like Lynas and MP Materials rode the wave of supply scares to multi-year highs, outperforming broader markets on the back of strategic importance and, in China’s case, windfall profits. Midstream processors and magnet makers saw more nuanced impacts – improved earnings in some cases, margin squeezes in others – reflecting the complexity of the rare earth value chain. Newcomers in recycling and Western processing are laying the groundwork for a more diversified supply ecosystem, which investors are watching closely as a longer-term catalyst.
Looking ahead, investors should expect continued headline-driven swings. Any further easing or tightening of China’s export policies will likely move prices and equities in this sector overnight. REEx continues to focus on evidence of various national policies indicating more comprehensive investment and execution of ex-China advancement across the rare earth element supply chain—upstream, midstream and downstream as well as in the disruptive segments such as recycling or even non-rare earth magnets.
Conversely, sustained EV and renewable energy growth provides a supportive demand backdrop, which could firm up fundamentals (e.g., higher volumes and revenues) over time rather than just speculative pricing. REEx notes with the passage and signing of the Big Beautiful Bill (BBB) on the one hand are tax breaks and incentives and capital for REE projects, on the other hand are broad and deep cuts to the green energy revolution (including EVs). This is one reason why Elon Musk has turned anti BBB activist.
Yet despite recent pullbacks, market sentiment remains broadly bullish that rare earths are entering a structural upcycle: the world’s electrification and defense needs are growing, and Western governments along with places like India (the world’s most populated nation and fourth biggest economy) are committed to securing supply chains. The key for investors is to balance this long-term thesis with the short-term reality of volatility. High stock valuations built purely on scarcity premiums could correct if supply bottlenecks ease or if substitution technologies (like motor designs using less or no rare earths) advance. Therefore, tracking company fundamentals – production volumes, contracts (e.g., MP’s magnet sales deals, Lynas’s new supply agreements), and profitability – is crucial alongside geopolitical news.
Absolutely key to this (acknowledging our bias of course) are the REEx Project database comparisons including upstream (light and heavy rare earth element mining interests), midstream and downstream as well as disruptive technology and methods including recycling companies.
In summary, rare earth stocks in 2025 have been on a wild ride, but the sector’s strategic importance is clearer than ever. From China’s policy maneuvers to recycling breakthroughs, the developments of this year have underscored both the opportunities and the risks in this niche market. For investors with an appetite forvolatility and a focus on the clean-tech future, rare earth equitiesoffer a chance to gain exposure to the “vitamins”of modern technology – just be prepared for sudden twists and turns on the way. In the USA with BBB the evolution of green energy may slow, however, with resurgence of fossil fuels.
Diversification (including via ETFs) and a close eye on policy changes—not to mention a systems view of the entire supply chain–remain prudent as this critical materials saga continues to unfold.
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