Opportunities In Rare Earth Elements Stocks – Part 2
Excelsior Prosperity w/ Shad Marquitz (07/19/2025)
We are back with the next article covering opportunities for investing in the rare earths sector. As mentioned in [Part 1] of this series, my investing journey in the Rare Earth Elements (REEs) space began about 15 years ago, and have seen this sector run and retreat a few times, and while this move has had some legs, I’m seeing a lot of hype starting to circulate around the rare earths space again… (which is not a surprise).
👉 The goal here is in this series is to separate the real companies and opportunities in the sector from the marketing fluff and companies that are jumping on the bandwagon, but with no chance of ever seeing an economic business develop.
There are some legitimate companies in this rare earth elements space that are worth reviewing, particularly the ones involved with the downstream processing and separation of these 15 (or sometimes 17) critical metals.
🔹 There are far fewer real opportunities in the upstream mining companies (despite all their pitches and slide decks to the contrary); but there are still a few solid mineral deposits worth noting. We’ll expand on some of those down the road in this series…
In this article and over the course of this series, we’ll review some companies that have legitimate business strategies and value propositions for consideration in this sector. The first article highlighted a number of companies and concepts that are important for investors to have as a framework for investing in this arena of the resource investing universe. For those that missed that article, here it is again for quick reference.
We’re going to continue on here, building upon the points we outlined in Part 1, still focused on the downstream processors and separators of REEs.
So, let’s get into it…
Here is some more information, continuing to outline the fundamental supply/demand case for the evolving bull market in rare earth elements.
🔹 The United States currently has 25% tariffs on rare earths permanent magnets, tantalum and hafnium from China. There are two types of rare earth permanent magnets: neodymium magnets and samarium–cobalt magnets.
🔹 Key REEs: Neodymium (Nd), praseodymium (Pr), dysprosium (Dy), and terbium (Tb) are crucial for NdFeB magnets used in electric vehicle motors and wind turbines.
🔹 Conversely, China has export controls or flat out export bans on select critical and rare earth metals to the US, and a ban on the export of rare earths separation and processing technology.
🔹 In April 2025, China imposed a new round of export controls on seven rare earth elements (REEs) that are essential for modern technology ─ dysprosium, gadolinium, lutetium, samarium, scandium, terbium and yttrium.
🔹 Global rare earth element (REE) demand is projected to reach 250,000 metric tons by 2025, with strong growth driven by technology and defense sectors. Specifically, the increasing demand for permanent magnets, particularly in electric vehicles and wind power, is a major factor in this growth. By 2025, magnets are expected to account for nearly 30% of total REE consumption.
🔹 Back in 2022, the United States Geological Survey released a list of 50 mineral commodities critical to the U.S. economy and national security, after an extensive multi-agency assessment. Many of the minerals on this list are rare earth elements.
There are a plentitude of articles out there discussing the need for more North American domestic supply chains and also refining and processing of critical minerals in the US and Canada. We don’t have the time or bandwidth to get into all of those in this article, but here are a few that recently caught my eye.
How the United States Can Enhance Critical Minerals Supply
Richard Longstaff – Wall Street Journal
As the U.S. government considers how to strengthen America’s economic and national security, many industry stakeholders are calling for a more cohesive and coordinated approach to the development of critical minerals, including rare earth minerals, to accelerate results.
Of the 50 elements deemed critical to the American economy and national security by the U.S. Geological Survey, the United States is 100% dependent on foreign suppliers for 12 of them and is more than 50% reliant on non-domestic sources for another 29.
“Through an executive order, President Trump created and empowered the National Energy Dominance Council (NEDC) comprising at least 19 senior U.S. government officials to advise the White House on strengthening the U.S. energy sector, improving permitting and regulation, enhancing private sector investments, and facilitating cooperation among government agencies and industry, including for critical minerals.
The Trump administration has made critical minerals security a key component of its energy-focused strategy, evident by several recent executive orders.”
China Currently Controls Over 69% Of Global Rare Earth Production
GlobalData - January 18, 2025
https://www.mining-technology.com/analyst-comment/china-global-rare-earth-production/
Global mine production of rare earths reached an estimated 350,000t of rare earth oxide (REO) equivalent in 2023. China currently dominates global rare earth production, accounting for over 69% in that same year. This dominance extends beyond mining, with China also processing nearly 90% of the world’s rare earth elements. While China’s lower production costs and advanced refining capabilities contribute to this dominance, concerns arise from its production quotas and export restrictions.
Recognizing the risks associated with over-reliance on China, countries are diversifying their supply chains. The US, the second largest and accounted for 12.3% of global production in 2023, is leading this effort, with the reopening of the Mountain Pass mine being a significant step.
Exclusive: China quietly issues 2025 rare earth quotas, sources say
Reuters - July 18, 2025
“China has quietly issued its first 2025 rare earth mining and smelting quotas without the typical public statement, sources with knowledge of the matter said this week, another sign of Beijing tightening its control over the crucial sector.”
“The quotas are closely monitored as a barometer for the global supply of rare earths, a group of 17 elements used in electric vehicles, wind turbines, robots and missiles. The government issued the first set of quotas for the year only last month, without the usual public statement, said the sources, with one of them saying the companies were told not to share the numbers for security reasons. The sources did not give the quota volumes.”
“China is increasingly sensitive about rare earths and its control over the supply, which it has been willing to assert amid its trade discussions with the U.S. and European Union.”
“Beijing added several of the elements and related magnets to its export restriction list in retaliation for U.S. tariff hikes, cutting off supply and forcing some automakers outside China to partially shutter production.”
It is pretty obvious that we need North American sources of the refined, separated, and processed rare earth elements, but that doesn’t necessarily mean that ore needs to be sourced domestically.
As we discussed in [Part 1], Energy Fuels Inc. (NYSE American: UUUU) (TSX: EFR), is one of the few North American producers of rare earths; currently producing a NdPr oxide at their White Mesa Mill in Utah. However, Energy Fuels is advancing world-scale rare earth, titanium & zirconium mining projects in Madagascar, Australia & Brazil. So the advantage of downstream processing companies is that they can source the REEs from many places and then process and separate them locally.
Since the prior article Energy Fuels has also announced to the market that it is now officially producing Heavy Rare Earth Elements (HREEs).
Energy Fuels Now Producing Heavy Rare Earth Element Oxides
- July 17, 2025
“Energy Fuels Inc. (NYSE American: UUUU) (TSX: EFR) , a leading U.S. producer of uranium, rare earth elements ("REEs"), and other critical minerals, is pleased to provide an update on its heavy rare earth element ("HREE") oxide production, which is the only heavy rare earth oxide production occurring from mined ores at a commercial facility in the United States at this time.”
“Energy Fuels is now in the process of producing Dysprosium ("Dy") oxide, at a minimum purity of 99.5% and potentially exceeding 99.9% purity, at pilot scale at its White Mesa Mill in Utah. Energy Fuels expects to complete production of its first kilogram ("kg") of Dy oxide within the next 30 days. The Company expects to continue producing Dy oxide on a pilot scale until the end of September 2025, at which time it expects to have produced approximately 15 kg of Dy., generating enough residuals to feed its Terbium ("Tb") circuit starting the beginning of October 2025. The Company expects to have produced one kg of Tb on a pilot scale by the end of November 2025. If progress continues as planned, the Company expects to be able to start producing Samarium ("Sm") oxide on a pilot scale at the Mill in January of 2026.”
The most visible US mining and production company in the rare earths space is MP Materials Corp. (NYSE: MP).
Here is how they describe their business value proposition:
“MP Materials is America’s only fully integrated rare earth producer with capabilities spanning the entire supply chain—from mining and processing to advanced metallization and magnet manufacturing. We extract and refine materials from one of the world’s richest rare earth deposits in California and manufacture the world’s strongest and most efficient permanent magnets.”
Big news broke just in the last 2 weeks in the rare earths sector when the US government, via the Department of Defense, got involved with MP Materials as their largest shareholder, provided them a loan, and agreed to an offtake agreement for their NdPr production. This news was followed by a big investment from Apple with the goal to produce recycled rare earth magnets.
So MP Materials got a double-whammy of good news thus far in July (and thus got on a bunch of generalist investors radar screens as a result…) which is good news for the commodities sector overall, as more people wakeup to the importance of raw materials and the supply chain bottlenecks.
MP Materials Announces Transformational Public-Private Partnership with the Department of Defense to Accelerate U.S. Rare Earth Magnet Independence - July 10, 2025
“MP Materials Corp. today announced it has entered into a transformational public-private partnership with the United States Department of Defense (“DoD”) to dramatically accelerate the build-out of an end-to-end U.S. rare earth magnet supply chain and reduce foreign dependency.”
“With a multibillion-dollar package of investments and long-term commitments from DoD, MP Materials will construct the Company’s second domestic magnet manufacturing facility at a soon-to-be-chosen location to serve both defense and commercial customers. Once the new facility is completed, expected to begin commissioning in 2028, MP Materials’ total U.S. rare earth magnet manufacturing capacity will reach an estimated 10,000 metric tons.”
“The Company also expects to add additional heavy rare earth separation capabilities at its Mountain Pass, California, facility, solidifying its status as a national strategic asset where high-purity rare earth materials are extracted, separated and refined all in one location.”
DoD has entered into a 10-year agreement establishing a price floor commitment of $110 per kilogram for MP Materials’ NdPr products stockpiled or sold, reducing vulnerability to non-market forces and ensuring stable and predictable cash flow with shared upside.
For a period of 10 years following the construction of the 10X Facility, DoD has agreed to ensure that 100% of the magnets produced at the 10X Facility will be purchased by defense and commercial customers with shared upside.
The Company has obtained a commitment letter from JPMorgan Chase Funding Inc. and Goldman Sachs Bank USA to provide $1.0 billion of financing for the costs of constructing and developing the 10X Facility, subject to customary terms and conditions set forth therein. In addition, within 30 days, the Company expects to receive the proceeds of a $150 million loan from DoD in connection with its plan to expand its heavy rare earth separation capabilities at Mountain Pass.
As part of the agreement, DoD agreed to purchase $400 million of a newly-created series of the Company’s preferred stock convertible into shares of the Company’s common stock, and a warrant permitting DoD to purchase additional shares of the Company’s common stock.
As a result of the strategic investment, DoD is positioned to become the Company’s largest shareholder. On an as-converted and as-exercised basis, the convertible preferred stock and the warrant represent, in the aggregate, 15% of the Company’s issued and outstanding shares of common stock as of July 9, 2025, without giving effect to the issuance of such shares.
MP Materials and Apple Announce $500 Million Partnership to Produce Recycled Rare Earth Magnets in the United States
- July 15, 2025
“MP Materials (NYSE: MP) today announced a definitive, long-term agreement to supply Apple with rare earth magnets manufactured in the United States from 100 percent recycled materials.”
“Under the agreement, MP Materials will supply Apple with magnets produced at its Fort Worth, Texas, facility—known as Independence—using recycled rare earth feedstock processed at MP’s Mountain Pass site in California. The feedstock will be sourced from post-industrial and end-of-life magnets, marking a major milestone in both companies’ long-standing efforts to create sustainable, domestic supply chains.”
This news from MP Materials rippled through the resource investing community, and sent their stock price soaring higher in mid-July.
(MP) is up 346% from its recent May low of $18.64 up to its July peak at $64.51.
(MP) is up ~6.5X in just the last year off its August 2024 low of $10.02.
We see a clear pricing pattern of higher lows and higher highs = bullish.
(MP) is well above its 50-day Exponential Moving average (currently at 34.80), which has it in a bullish posture.
The stock is overbought with an RSI reading of 85.55, but rightly so with all those positive news announcements. This kind of momentum can keep a stock in overbought territory longer than investors may expect, but it is still worth noting.
There are some upside gaps higher on the daily chart from $31-$43 and then from $51-$53 that may needed to get filled on future corrective back-tests in pricing. Personally, I’m considering adding a position in (MP) if one or both of those levels of support get tested. Sometimes breakaway gaps in strong bullish momentum don’t get filled.
It should be noted though that while the recent action from MP Materials has been an absolute standout, it wasn’t alone in garnering new investor capital inflows. Most of the quality REE stocks have seen their share prices essentially double so far in 2025, and they are all above key moving averages in bullish postures (except Leading Edge Materials, but they have projects exposed to other commodities as well).
Have a look at the 9 REE stocks below on this candle-glance chart.
The first 4 companies are REE producers and processors at present
The second 4 companies are other potential near term producers and down-stream processors
The third 4 companies have delineated advanced REE deposits.
{Click on the image above to enlarge it}
Now it is time to dive into the featured company for this article, which is full disclosure is a portfolio position (and so I’m biased in that sense):
Neo Performance Materials Inc. (TSX: NEO) (OTCQX: NOPMF).
Here is how the company describes its valuation proposition in their own words:
“Neo manufactures the building blocks of many modern technologies that enhance efficiency and sustainability. Neo's advanced industrial materials – magnetic powders, rare earth magnets, magnetic assemblies, specialty chemicals, metals, and alloys – are critical to the performance of many everyday products and emerging technologies. Neo's products fast-forward technologies for the net-zero transition.”
“The business of Neo is organized along three segments: Magnequench, Chemicals & Oxides and Rare Metals.”
“Neo is headquartered in Toronto, Ontario, Canada; with corporate offices in Greenwood Village, Colorado, United States; Singapore; and Beijing, China. Neo has a global platform that includes manufacturing facilities located in China, Germany, Canada, Estonia, Thailand and the United Kingdom, as well as a dedicated research and development center in Singapore.”
Let’s have a look at the technical picture on the daily chart for Neo Performance Materials (TSX: NEO):
The share price of (NEO.TO) has almost doubled off its May 2025 low of $8.93 up to its recent July 2025 peak of $16.95.
This stock is up over 3X off its March 2024 low of $5.18. That is quite a move in the stock in just a little over a year.
(NEO.TO) closed on Friday at $16.54, which is well above its 50-day EMA (currently at $13.01), keeping the stock in a bullish posture.
Neo Performance Materials is overbought with the current RSI reading at 79.13. Similar to the chart of MP Materials, this kind of momentum can keep a stock in overbought territory longer than investors may expect, but it is still worth noting.
My thesis is that pullbacks down to backtest the 50-day EMA will be good areas for accumulation. {That is not investment advice, and I’m not an investment advisor. I’m merely sharing my own personal investing thesis here for entertainment purposes}.
🔹 What really stands out with regards to the position that Neo Performance Materials holds in the REE sector is that it is the only domestically-based North American company that is:
actively producing both rare earths magnetic powders and rare earth magnets
engaged in mid-stream rare earths separation & production of mixed oxides
recycling rare earths
producing other strategic metals like niobium and tantalum, which are not rare earth elements but often associated with them due to their unique properties
Those capital infusions into MP Materials by the Department of Defense are for the eventual production of rare earth magnets at their 10X facility, that isn’t slated to be built and into production of magnets until 2028 at the earliest. The company is slated to start producing some magnets at their existing plants later this year, but this is a new business division for them to deliver on.
The investment into MP Materials by Apple is for the construction of a magnet recycling center at Mountain Pass, that has not yet been built, and first magnet shipments are not expected to begin until 2027, and then ramp up from there.
Neo Performance Materials is producing REE magnets, REE magnetic powders, and REE oxides now, as well as recycling REEs at present.
The company is already one of the most vertically integrated REE companies on the market, with many steps in the mid-stream separation and down-stream processing across many plants operating in multiple countries and jurisdictions.
This gives Neo Performance Materials a multi-year head start over MP Materials, or any other competitor, to keep establishing business partnerships and offtake agreements.
The operations team at NEO.TO also has the experience under their belts to continue to execute on this business strategy, whereas other companies still need to prove they can do this commercially. The company has been producing magnets and processing rare earth elements for over 30 years, both inside China and now outside. This will give the company an edge in the marketplace.
In addition to supplying the permanent magnet growth in the US, Neo Performance Materials has also made inroads into the European markets.
Its new factory being built this year is set to be the first commercial-scale magnet facility in the EU.
I was out of pocket this last week on vacation with my family, but over at the KE Report, Cory Fleck interviewed our friend and colleague, Matt Geiger, of MJG Capital. In this interview, he did touch on the rare earths sector, the big news out of MP Materials. Matt does point out that it was curious to see the US government pin their future on just one company that thus far doesn’t have magnet production experience, and with a deposit lacking in the required heavy rare earth elements. Additionally, earlier in the discussion, he also shared why his fund is positioned in Neo Performance Materials for exposure to the REE space.
{This hotlink should take you right to that part of the discussion on the news from MP Materials at the (37:23 mins) mark}
Well, that wraps us up for this next article on opportunities in the rare earths sector.
Thanks for reading and may you have prosperity in your trading and in life!
Shad