Rare earth stocks are shares in companies that produce rare earth elements (REEs) — a group of 17 valuable metals used in essential technologies from things like x-ray imaging to smart phones.
The rare earth elements market is expected to experience about 12.3% annual growth, making it worth $9.6 billion by 2026.1 With efforts underway in the U.S. and Canada to reduce reliance on Chinese exports, investors are increasingly turning to rare earth stocks and ETFs as a way to diversify their portfolios and tap into a fast-growing sector.
Wise takeaways
- Rare earth stocks and ETFs are based on the mining companies that produce and mine rare earth elements (REEs).
- You can buy rare earth stocks and EFTs through an exchange like the New York Stock Exchange or the TSX Venture Exchange.
- There are three types of rare earth companies: primary rare earth companies, junior mining companies and diversified mining companies.
- Although China holds the largest percentage of rare earth elements, the U.S. has been ramping up mining and production efforts, with Canada trailing behind.2,3
What are rare earth stocks?
Rare earth stocks are shares of companies that mine, process or produce rare earth elements from natural mineral deposits.4 These minerals are found across the globe, making their supply and distribution closely tied to international trade and geopolitics.
As global demand for clean energy, electronics and defense tech accelerates, rare earth elements are gaining attention for their critical role in today’s world. Each element serves a different purpose, such as neodymium and dysprosium, which are used for electric vehicles and wind turbines, and gadolinium, which is used in x-ray imaging and sonar systems.
What are rare earth elements used for?
Rare earth elements can include magnetic, electrochemical and luminescent minerals that contribute to a variety of critical items we depend on every day.5
- Aircraft (dysprosium, neodymium, terbium)
- Artificial intelligence processors (lutetium)
- Batteries (yttrium)
- Data storage devices (dysprosium)
- Electric vehicles (neodymium)
- Fiber-optic networks (erbium)
- Night vision and sonar systems (terbium)
- Nuclear reactors (gadolinium)
- Wind turbines (dysprosium, neodymium)
- X-ray imaging (gadolinium)
3 rare earth stocks
Deciding which rare earth stocks to invest in depends on your long-term financial goals and investment strategy. Below are some of the most prominent mid-to-large-cap rare earth stocks, each with unique projects and growth potential.
Stock name (ticker)
Country/exchange
Market capn
Where it’s used
Category
Lynas Rare Earths (LYC)
Australia/ASX
$5.375 billion
Industrial metals and mining; Mount Weld and Kalgoorlie Projects
Mid-to-large-cap
MP Materials (MP)
United States/NYSE
$4.244 billion
Materials and magnetics; Mountain Pass Rare Earth Mine and Processing Facility
Mid-to-large-cap
Iluka Resources (ILU)
Australia/ASX
$1.616 billion
Mineral sands, rare earths, and idle segments
Mid-to-large-cap
5 rare earth ETFs
These ETFs represent some of the largest and most stable rare earth investments, providing strong market presence and diversified exposure to the sector. Below, you'll find options that cater to different investment strategies, including those with a focus on production capability, resource longevity, and more.
ETF name (ticker)
Country/exchange
Market cap
Where it’s used
Category
SPDR S&P Metals & Mining ETF (XME)
United States/NYSE
$1.56 billion net assets
Metals and mining segment of the S&P Total Market Index
Mid-to-large-cap
iShares MSCI Global Metals & Mining Producers ETF (PICK)
United States/NYSE
$1.56 billion net assets
Metals and mining segment of the S&P Total Market Index
Mid-to-large-cap, strong production capability
VanEck Rare Earth and Strategic Metals ETF (REMX)
United States/NYSE
$255.17 million net assets
Metals and mining; producing, refining, and recycling rare earth and strategic metals
Mid-to-large-cap, strong production capability
Global X Disruptive Materials ETF (DMAT)
United States/Nasdaq
$4.76 million
Companies producing metals and other raw/composite materials essential for disruptive technologies
Resource quality and longevity, strong production capability
KraneShares Electrification Metals Strategy ETF (KMET)
United States/NYSE
$2.61 million
Measures performance of metals by investing in futures contracts
Resource quality and longevity
Explanation of categories:
- Mid-to-large-cap rare earth stocks and ETFs: These are major, established companies and ETFs in the rare earth sector, providing stability and market presence.
- Rare earth stocks and ETFs known for resource quality and longevity: These companies and ETFs are known for their access to high-quality deposits and long-term production stability.
- Rare earth stocks and ETFs known for strong production capability: These companies and ETFs are capable of meeting strong demand due to their significant production capacity.
Where can I invest in rare earth stocks?
You can invest in rare earth stocks through major exchanges like the New York Stock Exchange (NYSE), Nasdaq, and OTC Markets. These platforms list both individual rare earth companies and ETFs.
How many rare earth elements are there in the world?
There are 17 rare earth elements.6
- Cerium
- Dysprosium
- Erbium
- Europium
- Gadolinium
- Holmium
- Lanthanum
- Lutetium
- Neodymium
- Praseodymium
- Promethium
- Samarium
- Scandium
- Terbium
- Thulium
- Ytterbium
- Yttrium
What about gold and silver?
Although these are mined elements, gold and silver are not rare earth elements. Instead, they are precious metals. To invest in gold or silver, you can still buy precious metals stocks and ETFs. However, unlike rare earth elements, you can also purchase precious metals like gold or silver in physical form via coins or bars.
Pros and cons of investing in rare earth stocks
There are both advantages and drawbacks to investing in rare Earth stocks.
- Constant demand. Rare earth elements are an integral part of daily life.
- Stability. These elements have less price volatility than other commodities.
- Versatility. REEs can be used for a variety of needs and products.
- Diversification. Investors can diversify their holdings between traditional stocks and alternative investments.
- Resource-intensive. Mining requires the excavation of large areas of land for often minimal deposits.
- Limited inventory. The highest amount of REEs are in China, not the U.S.
- Reliance on China. Many domestic materials are still sent to China for processing.
- Environmental concerns. Excavating rare earth elements causes a high level of pollution and waste that can harm the environment.
How to invest in rare earth stocks?
Once you determine which rare earth stocks to invest in, you need to choose a trading platform, create an account and make your investment.
- Choose a brokerage. Review the best brokerages for the right products and lowest fees for your trade.
- Open an account. Go online or download the broker’s app to create an account.
- Fund your account. Add your payment information to fund your account with the amount of your choice.
- Place your trade. Follow the steps to place your trade for the rare earth stock or ETF of your choice.
Types of rare earth companies
Rare earth companies are typically divided into three categories based on their stage of development and business focus. This classification helps investors understand how each company contributes to the supply chain — whether they are actively producing rare earths, still in the exploration phase, or involved in a broader range of mining activities beyond rare earth elements.
- Primary rare earth companies focus directly on mining and processing rare earths.
- Junior mining companies are smaller, early-stage firms that focus on exploration and development.
- Diversified mining companies produce a range of minerals, with rare earths making up only part of their portfolio.
1. Primary rare earth companies
Primary rare earth companies are those that directly participate in the mining or refining of rare earth elements. There are just 15 to 25 available globally, with these companies serving as popular investment options.
- MP Materials (NYSE: MP) – U.S. MP Materials Corp produces the most rare earth materials in the Western Hemisphere as the owner of the only rare earth mining site, the Mountain Pass Rare Earth Mine and Processing Facility.
- Lynas Rare Earths (ASX: LYC) – Australia. Formerly known as Lynas Corporation Limited, Lynas Rare Earths Limited is a publicly-listed company that mines and produces rare earth materials like lanthanum, neodymium, and gadolinium in Australia and Malaysia.
- Iluka Resources (ASX: ILU) – Australia. Formerly known as Westralian Sands Limited, Iluka Resources Limited mines and processes mineral sands like zircon, monazite and ilmenite in Australia, Asia, Europe and the Americas.
- China Northern Rare Earth Group (SSE: 600111) – China. Formerly known as Inner Mongolia Baotou Steel Rare-Earth (Group) Hi-Tech Co., Ltd., China Northern Rare Earth (Group) High-Tech Co., Ltd handles the product and sale of rare earth metals, rare earth salts and rare earth oxides in Asia, Europe and the Americas.
2. Junior mining companies
Junior mining companies are smaller companies that focus more on exploration than the actual mining or production of rare earth elements. With more than 50 options globally, these companies are often speculative, offering potential upside with viable deposits or secure funding.
- Vital Metals (ASX: VML) – Australia. Vital Metals Limited is a mineral exploration and development company with full interest in the Nechalacho Rare Earths project in Yellowknife, Northwest Territories.
- Rare Element Resources (OTCQB: REEMF) – U.S. Rare Element Resources Ltd. explores mineral properties in the U.S. and Canada with 100% interest in the Bear Lodge property,
- Arafura Rare Earths (ASX: ARU) – Australia. Previously known as Arafura Resources Limited, Arafura Rare Earths Limited explores and develops rare mineral properties like neodymium-praseodymium in Australia.
3. Diversified mining companies
Some rare earth companies take a diversified approach with multiple services and products beyond just rare earth elements. For this reason, they are not generally included in pure rare earth stock and ETF lists.
FAQs
Lena Borrelli
Freelance Contributor
Lena Muhtadi Borrelli brings over 20 years of experience in the finance industry. She began her career at Morgan Stanley before transitioning over to media. As a finance writer, she has served as an authority for several respected outlets, including Forbes, TIME, Newsweek, Bankrate, Investopedia, Insurance.com, and InvestorPlace. No matter what she is writing, Lena has a unique ability to simplify complex topics, making finance more approachable and relatable to the average reader. When she is not writing or scanning the news for the latest headlines, she is happiest spending time in the Florida sunshine with her husband and two pups.
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