Shares of U.S.-listed companies linked to the rare earths supply chain climbed Monday as investors continued to assess the impact of Chinese export restrictions on domestic producers.
Rare earths are essential minerals for many aspects of modern life, including the technology sector and the energy transition, as they are used in everything from semiconductors to fighter jets to electric vehicle engines.
Prime Minister Donald Trump and Australian Prime Minister Anthony Albanese signed an agreement Monday to invest in joint ventures to maintain a critical minerals and rare earths supply chain that is not dependent on China.
US Treasury Secretary Scott Bessent told CNBC last week in an exclusive interview that the Trump administration would set price floors for a range of industries, including rare earths, to combat market manipulation by China. Shares of rare earth and critical minerals mining companies have rebounded in recent sessions as investors consider which companies could be future targets for the government’s industrial policy.
NioCorp led the sector’s gains with an increase of nearly 20%. Energy fuels increased by around 7% while Rare Earth from the United States increased by almost 14% and Perpetual resources advanced by more than 7%. MP materials was also in the green, up more than 2%. of Canada Lithium Americas increased by almost 3%
The moves come as the Trump administration works to build its own domestic rare earth supply chain. The Defense Department reached a deal in July with MP Materials, the largest U.S. rare earths miner, that included an equity stake, a floor price and an offtake agreement.
Investors expect the administration to support more miners. William Blair launched USA Rare Earth’s coverage Monday with an outperform rating, hoping the Trump administration “may soon take a significant stake in the company.”
Michael Silver, CEO and president of rare earth distributor American Elements, told CNBC’s “Squawk Box” last week that the U.S. has enough heavy rare metals for its military applications, but that supply chain squeeze could impact electric vehicles, lasers and “a lot of commercial technologies.”
Starting and operating mines should be “treated as national priorities,” Silver said, adding that there will likely be government participation and subsidies.
Under new rules announced earlier this month, foreign companies now need Beijing’s approval to export rare earths and must explain what they will be used for.
– CNBC’s Spencer Kimball contributed to this report.
