Rare earth.
Washington sets the price.

Rare earth stocks have a strange problem. They go down when the world gets safer. In late September, Xi visited Trump in Washington and the two sides extended their trade truce to January 10, and the rare earth names had spent the whole month sliding on hopes of exactly that.

The reason is that their value comes from China's grip. Rare earths aren't actually rare. What's rare is the ability to mine them, separate 17 nearly identical elements, turn the right ones into metal, and press that metal into magnets. Four of them matter most (neodymium, praseodymium, dysprosium, and terbium), because they make the strongest permanent magnets there are. Every EV motor, wind turbine, fighter jet, humanoid robot, and data-center hard drive runs on them.

China does most of the mining, nearly all of the refining, and most of the magnet-making, and it has used that leverage. It put export licenses on seven rare earths in 2025, and outside China, the scarcest ones now trade at several times the Chinese price.

Washington's response was to step into the business itself. The Pentagon is MP Materials' largest shareholder and guaranteed it $110 a kilogram for its main product, NdPr oxide, for ten years. This year it backed the first Western floor prices for dysprosium and terbium, too. Government money now props up nearly every serious Western project, through equity stakes, loans, price floors, and promises to buy the output.

So the 2027 question for rare earth stocks is how much of each company's price a government has guaranteed. The list is sorted by that protection:

• Contracted: producers selling at government floor prices. The downside is covered.
• Integrated: companies already turning rare earths into metal and magnets, mostly without a floor.
• Developers: funded projects with construction underway. No floor and no revenue yet.
• Private: the magnet makers Washington is bankrolling.

These three sell at prices a government has promised to support. If China floods the market, they still get paid.

MP Materials NYSE: MP

MP Materials is the template every other Western deal copies. It owns Mountain Pass in California, the only commercial rare earth mine in the US, and sold 1,006 tonnes of NdPr in Q2, up 127%. The 2025 Pentagon deal made the government its largest shareholder, set a $110 floor for ten years, committed to buy every magnet from a Texas plant due in 2028, and gave the government 30% of any upside above the floor once that plant is at full capacity.

MP expects its first commercial magnets to ship to GM by year-end, and Apple has a $500 million recycled-magnet deal starting in 2027. MP is no longer a bet on the rare earth price. It's a bet on a contract.

Lynas Rare Earths ASX: LYC

Lynas has been doing this the longest. Its Mt Weld mine in Western Australia has fed a separation plant in Malaysia since 2012, and in 2025 it became the first company outside China to commercially separate dysprosium and terbium. Japan's state-backed buyers take a large share of its output through 2038 at a $110 floor.

On October 1 it agreed to buy Meteoric Resources for about A$968 million in shares, adding a Brazilian clay deposit with both light and heavy rare earths. Lynas has the operating record nobody else has, and it's now using it to buy the next source of heavy rare earths.

USA Rare Earth NASDAQ: USAR

USA Rare Earth closed its purchase of Brazil's Serra Verde on September 3. It's the only mine outside Asia producing all four magnet rare earths at commercial scale. A government-backed vehicle of up to $1.55 billion buys the output at floor prices: $110 a kilogram for NdPr, $2,050 for terbium and, by Serra Verde's figures, $575 for dysprosium, all rising 2% a year.

It also runs a magnet line in Oklahoma, broke ground in September on a $1.2 billion magnet plant in South Carolina, and got a new CEO on October 1. The stock is more than half off its peak. The floors protect the mine. They don't protect shareholders from the share count, which grew with the deal.

These companies already turn rare earths into metal or magnets, the step where China's grip is tightest. Most of them don't have a government floor.

Energy Fuels NYSE American: UUUU

Energy Fuels runs America's only conventional uranium mill, in Utah, and turned it into a rare earth refinery that has produced dysprosium and terbium oxide at pilot scale. In August it closed the purchase of Australian Strategic Materials, which brings a Korean metals plant and an ASX listing. In June it got a conditional $725 million loan commitment from the Pentagon's investment office.

The big piece is VAC, a German magnet maker with a plant in South Carolina, which it's buying for $1.9 billion with a close targeted for early 2027. When that closes, Energy Fuels goes from ore to finished magnet under one roof.

Neo Performance Materials TSX: NEO

Neo already does what most of this list is promising to do. It separates rare earths and makes sintered magnets in Estonia, where its first automotive program passed qualification and went into commercial production in September. Bosch has reserved capacity, and Neo makes money doing it. It hasn't gotten the Pentagon backing that lifted the US names, which is why it trades at a fraction of their valuations. If Europe writes its own floor-price deals, Neo is first in line.

Funded projects with shovels in the ground and no revenue yet. None has a government price floor, so each of these rare earth stocks is a bet that the ex-China premium holds until the project starts producing.

Iluka Resources ASX: ILU

Iluka is building Eneabba, Australia's first refinery designed from day one to separate both light and heavy rare earths, with an A$1.65 billion government loan behind it. It's about 60% built and set to commission in 2027. In June it signed its first binding take-or-pay contract with an automaker: 1,200 tonnes over four years from 2028, worth at least US$155 million. The feedstock is already sitting in a stockpile from decades of mineral sands mining.

Arafura Rare Earths ASX: ARU

Arafura is due to start construction on its Nolans project in the Northern Territory this quarter, aiming for about 4,440 tonnes of NdPr a year, roughly 4% of world supply. What makes it different is pricing: its two most recent offtake agreements are priced off a seaborne index instead of China's domestic price. If a separate Western price takes hold, Arafura is already selling into it.

Aclara Resources TSX: ARA

If you think the real squeeze is in heavy rare earths, Aclara is the purest way to bet on it. Its Carina project in Brazil is ionic clay, the same kind of deposit China's own heavy rare earths come from, and it targets 156 tonnes of dysprosium and 27 tonnes of terbium a year. A separation plant in Louisiana got its state air permit in September and targets start-up in 2028. Lynas just agreed to pay almost a billion Australian dollars for a similar Brazilian clay deposit, which gives Aclara a price tag to point to.

The magnet end of the chain is where Washington writes its biggest checks, mostly to private companies.

Vulcan Elements

Vulcan makes sintered magnets in North Carolina and landed a $1.4 billion financing package in 2025, including $620 million of Pentagon loans and $50 million of Commerce Department equity, to build a 10,000-tonne-a-year US magnet plant. In September the Army picked it to supply magnets for its SkyFoundry drone program, its tenth Department of War contract. When that plant runs, it's the benchmark every other Western magnet maker gets measured against.

Noveon Magnetics

Noveon is already shipping. Its Texas plant makes sintered magnets from recycled ones, and it raised a $215 million Series C in January. Pentagon rules already bar magnets made in China, and from 2027 they bar any Chinese link in the chain, from mine to magnet. Recycled magnets milled and sintered in the US are exempt, which is exactly what Noveon makes.

Western rare earths are turning into a regulated utility.

Take the MP deal. The government sets a minimum price, owns a stake, buys the output and takes a share of the upside. Serra Verde has the same structure, with floors on every magnet metal. That's how regulated utilities work: a guaranteed return in exchange for giving up the windfall.

That changes what rare earth stocks are. For twenty years, they were a trading vehicle. They doubled when China threatened something and halved when it didn't. A producer with a ten-year floor and a government partner doesn't need a crisis anymore, and it doesn't get the full payoff from one either.

So in 2027, split the list in two. The contracted producers are slow, steady and capped, and should be valued that way. The real swings are in the companies outside the government's umbrella, and those are exactly the ones China can still bankrupt with a cheap year.