Rare earth elements (REEs), a group of 17 metals vital for high-performance magnets, represent a key vulnerability for Western technology. While not geologically rare, their production is concentrated in a supply chain almost entirely controlled by China, which handles over 60% of global mining and nearly 90% of the complex processing. This dominance creates a strategic liability for everything from F-35 fighter jets to EV motors and wind turbines—a liability that, for decades, was accepted as the cost of globalization. But today, geopolitical tensions have transformed this passive risk into an active economic chokepoint. Building an independent supply chain has become a national security imperative.
In this report, we highlight the top rare earth stocks positioned to capture rising green tech demand and the geopolitical push to secure new supply chains.
Why Rare Earths, Why Now?
First, demand for rare earths is structural and directly tied to the buildout of new energy and transportation infrastructure. The permanent magnets made from REEs like neodymium and dysprosium are essential for efficiency in electric vehicles (EVs) and offshore wind turbines. An EV requires roughly 1-2 kg of these magnets, and a single direct-drive wind turbine can use up to 1,000 kg. In the defense sector, REEs are also critical for precision-guided munitions, radar systems, and aerospace components.
Second, supply chains are fracturing. China has used its REE dominance as geopolitical leverage, imposing export controls on both the minerals and the processing technology. In response, Western governments are acting decisively. Initiatives like the Advanced Manufacturing Production Credit within the U.S. Inflation Reduction Act (IRA) and the EU’s Critical Raw Materials Act (CRMA) now provide subsidies, tax credits, and offtake agreements for domestic and allied production. This government backing makes new projects financially viable against state-subsidized Chinese competitors.
The Rare Earth Supply Chain
The key bottleneck in the rare earth supply chain lies not at the mine, but in the factory. China’s advantage is its mastery of midstream processing—the highly technical and environmentally sensitive work of separating individual rare earth oxides from mined ore. This is where the most value is created and where the West has the biggest deficit.
Thus, the focus of the rare earth landscape is shifting from high-risk exploration to a policy-supported industrial buildout. We can look beyond junior miners and consider the entire value chain: Mine-to-Magnet Operators, Midstream Processors, and Recycling/Circular Economy Innovators.
Mine-to-Magnet Operators
These companies aim to build an independent supply chain, from digging ore to fabricating magnets. This vertical integration offers the most control and directly challenges China’s dominance, but the path is highly capital-intensive and carries immense execution risk. Among all rare earth stocks, these integrated plays represent the highest-stakes bet on building a non-Chinese ecosystem from scratch.
MP Materials (NYSE: MP)
HQ: USA; America’s only integrated mine-to-magnet producer.
MP Materials leads America’s rare earth revival as the only integrated, at-scale producer in the Western hemisphere. The company operates the historic Mountain Pass mine in California, a world-class light rare earth deposit. After restarting the mine, MP moved downstream, commissioning separation facilities to produce refined neodymium-praseodymium (NdPr) oxide. Its final integration stage is now underway: building a permanent magnet factory in Fort Worth, Texas, to complete a domestic mine-to-magnet supply chain. This strategy directly addresses the geopolitical need for a non-Chinese source of materials for EVs, wind turbines, and defense systems.
The company’s progress is clear, with Q2 2025 revenues surging 84% year-over-year. The venture is powerfully de-risked by deep government and corporate partnerships. In a transformative deal, the U.S. Department of Defense became its largest shareholder through a $400 million equity investment, coupled with a 10-year magnet offtake agreement featuring a $110/kg NdPr price floor. Further validating its model, Apple has committed $500 million for a supply of magnets made from recycled materials, making MP a national champion for a secure and circular rare earth economy.
Lynas Rare Earths Ltd (ASX: LYC)
HQ: Australia; World’s only scaled non-Chinese rare earth producer.
Lynas Rare Earths is the world’s most significant producer of separated rare earths outside of China, the established incumbent for any Western company seeking supply chain diversity. With a decade of operational experience, Lynas runs a proven model, mining concentrate from its Mt Weld resource in Australia and performing complex separation at its materials plant in Malaysia. Critically, Lynas is the only non-Chinese company that has successfully produced separated heavy rare earths like dysprosium (Dy) and terbium (Tb) at scale—a key technical and strategic moat.
The company is executing its “Towards 2030” growth strategy, backed by a recent A$750 million equity raise, to expand its NdPr oxide capacity to 12,000 tonnes per annum. This plan includes a new cracking and leaching plant in Kalgoorlie, Australia, to process its own concentrate before shipment. However, the company faces uncertainty regarding its planned heavy rare earth separation facility in Texas. While this introduces execution risk, Lynas’s operational flexibility allows it to supply U.S. customers from its existing facilities. Its unparalleled track record and unique heavy REE capability make it an indispensable alternative to Chinese supply for global manufacturers.
Arafura Rare Earths Ltd (ASX: ARU)
HQ: Australia; Next Western producer, de-risked by offtakes and financing.
Arafura Rare Earths is positioned to become the next major Western producer by developing Australia’s first vertically integrated “ore-to-oxide” operation at a single site. The company’s flagship Nolans Project in the Northern Territory is a globally significant resource with a high concentration of NdPr (26% of its rare earth content) and a 38-year mine life. Co-locating all mining, concentration, and separation activities allows for a secure, transparent supply chain with strong ESG credentials. The project is construction-ready, having secured all necessary approvals.
Arafura’s path to production has been substantially de-risked by binding offtake agreements with Tier 1 customers, including Hyundai, Kia, and wind turbine giant Siemens Gamesa, who have collectively committed to purchasing over half the project’s initial NdPr output. This commercial validation is matched by powerful government backing; the Australian government has provided conditional financing letters totaling A$840 million. As a fully permitted, strategically located project with blue-chip partners and sovereign financing, Arafura is poised to become a key supplier of magnet metals for the energy transition.
Australian Strategic Materials Ltd (ASX: ASM)
HQ: Australia; Unique “mine-to-metals” strategy, capturing higher value.
Australian Strategic Materials has a differentiated “mine-to-metals” strategy, aiming to capture the highest-margin part of the supply chain by going from raw materials directly to high-purity metals and alloys. This strategy is built on two assets: the long-life Dubbo Project in New South Wales, a large resource of rare earths and critical minerals, and its operational Korean Metals Plant (KMP). In a key pivot, ASM streamlined the Dubbo Project’s development to focus on rare earth oxides, slashing initial capital expenditure by 56% to A$740 million. Meanwhile, the KMP serves as a powerful proof-of-concept, using third-party feedstock to produce critical metals today.
In a landmark achievement, ASM recently announced its maiden commercial sale of heavy rare earth metals from the KMP to Neo Performance Materials. This validates its clean metal refining technology and establishes early customer relationships and cash flow. ASM is now exploring a potential U.S. facility, backed by interest from the U.S. government. By first becoming a commercial producer of high-value metals, ASM de-risks its large-scale mining project and builds market presence while its Dubbo resource is brought methodically online.
Pensana Plc (LSE: PRE)
HQ: UK; Europe’s first independent mine-to-magnet-metal supply chain.
Pensana is developing an independent “mine-to-magnet-metal” supply chain to serve Europe’s EV and offshore wind industries. The company is executing a two-part strategy, with main construction now underway at both cornerstone projects. The first is the Longonjo mine in Angola, one of the world’s highest-grade NdPr deposits, developed with a 24% investment from Angola’s sovereign wealth fund. The second is the Saltend chemical processing hub in the UK’s Humber Freeport, set to be Europe’s first major rare earth separation facility.
This integrated model is built around a strong ESG proposition; the Saltend refinery will be powered by low-carbon energy from an adjacent offshore wind hub, enabling the production of sustainably branded magnet metals. A recent MOU with ReElement Technologies signals a proactive approach to securing diverse feedstock. By offering a non-Chinese, ethically sourced, and low-carbon supply of NdPr, Pensana is positioning itself as a vital industrial partner for the continent’s green transition, directly supporting the goals of Europe’s Critical Raw Materials Act.
Midstream Rare Earth Processors
This segment targets the key industrial chokepoint: the complex separation of mined ores into high-purity magnet inputs. These are technology companies, not miners, addressing the West’s primary capability gap. Their success hinges on securing reliable non-Chinese feedstock and proving their technology is cost-competitive at scale. These specialized rare earth stocks offer a focused bet on the know-how needed for an independent supply chain.
Neo Performance Materials Inc. (TSX: NEO)
HQ: Canada; Established processor building European magnet production capacity.
Neo Performance Materials is an established midstream industrial technology company that transforms rare earth oxides into high-purity functional materials. With a global footprint of processing facilities, Neo is a critical link in the supply chain, producing the advanced magnetic powders, alloys, and catalysts that manufacturers require. The company does not mine; it leverages decades of metallurgical expertise to source feedstock globally and serve a diversified customer base, insulating it from single-project risk. Strong demand is reflected in its Q2 2025 results, which prompted an increase in its full-year EBITDA guidance.
Neo’s growth is focused on moving further downstream. It is currently constructing Europe’s first commercial permanent magnet factory in Estonia to directly supply the continent’s automotive and renewable energy sectors. In parallel, it is piloting its own heavy rare earth separation line and has secured a key feedstock partnership with ASM. Neo is a direct play on the “friend-shoring” of the most technically complex part of the value chain, monetizing its processing know-how to become a go-to partner for Western industries seeking a secure magnet supply.
Ucore Rare Metals Inc. (TSXV: UCU)
HQ: Canada; Commercializing a disruptive, efficient rare earth separation technology.
Ucore Rare Metals is a midstream processor commercializing a new separation technology for the North American market. Its value is centered on its proprietary RapidSX™ technology, a solvent extraction platform that promises higher efficiency and a smaller environmental footprint than conventional methods. Ucore’s flagship project is its Strategic Metals Complex (SMC), a commercial-scale separation plant being developed in Louisiana. The credibility of its technology has been powerfully validated by an $18.4 million contract from the U.S. Department of Defense to support the SMC’s development and produce a domestic supply of light and heavy REEs.
To solve the crucial feedstock challenge, Ucore recently signed a non-binding offtake Letter of Intent with Critical Metals Corp for heavy rare earth carbonate from its project in Greenland, securing a potential long-term, non-Chinese raw material source. While the company holds the Bokan-Dotson Ridge deposit in Alaska as a strategic asset, its immediate focus is on deploying its technology. By proving RapidSX™ at commercial scale with DoD backing, Ucore could supply a faster, cheaper, and cleaner separation process for the entire Western supply chain.
Rare Earth Recycling & Urban Mining
This emerging segment focuses on “urban mining,” recovering magnet materials from discarded electronics and EV motors. This approach has a strong ESG advantage, bypassing the environmental and geopolitical risks of new extraction. The primary hurdle, beyond technology, is scaling collection logistics to secure a consistent, high-volume feedstock. These rare earth stocks represent a bet on a sustainable, secondary supply to supplement mining.
Mkango Resources Ltd. (TSXV: MKA; LSE: MKA)
HQ: Canada; Dual strategy: near-term recycling, long-term mining asset.
Mkango Resources pursues a hybrid strategy: generating near-term value from a high-tech recycling business while developing a large-scale primary resource. The company’s immediate commercial focus is its subsidiary, HyProMag, and its patented Hydrogen Processing of Magnet Scrap (HPMS) technology. HPMS provides an efficient method for “urban mining”—extracting and recycling rare earth alloys from end-of-life permanent magnets. This circular economy model is gaining significant traction in the U.S., where a Letter of Interest from the U.S. EXIM Bank for up to $92 million is helping to fund a “hub-and-spoke” network of recycling facilities centered in Texas.
In parallel, Mkango is advancing its conventional mining assets, including the world-class Songwe Hill rare earths project in Malawi and the Pulawy separation project in Poland. In a strategic move, these mining assets are being spun out via a planned business combination to list on Nasdaq. Mkango therefore offers two distinct opportunities: a near-term, capital-light, and ESG-friendly play on recycling through HyProMag, and a longer-term, large-scale resource play with Songwe Hill.
ReElement Technologies via American Resources Corp. (NASDAQ: AREC)
HQ: USA; Disruptive, cleaner, and lower-cost separation technology.
ReElement Technologies, a subsidiary being spun out from American Resources, is a technology company focused on the critical midstream bottleneck of refining and separation. Its core asset is a proprietary chromatographic separation technology that sets it apart from competitors. Unlike conventional solvent extraction, which uses harsh acids and generates significant waste, ReElement’s process is environmentally benign, using a closed-loop system with lower energy consumption. Its key competitive advantage is feedstock flexibility; the technology efficiently processes inputs from primary ores to recycled magnet scrap, separating both light and heavy REEs.
This modular, multi-mineral process has attracted significant government and commercial interest. In September 2025, ReElement secured a $2 million award from the U.S. Department of Defense to advance its domestic refining capabilities, followed by a $20 million equipment leasing facility to accelerate its production ramp-up. By offering a cheaper, cleaner, and more adaptable alternative to the Chinese-dominated standard, ReElement aims to become an enabling technology for a secure and diversified Western critical minerals supply chain.