What are rare earth elements and why are they important?

Rare earth elements are a group of 17 metallic elements that, despite their name, are relatively abundant in the Earth's crust. What makes them "rare" is finding them in concentrations high enough for economical extraction. They're crucial because of their unique magnetic, luminescent, and electrical properties that make them essential for many modern technologies. These elements are used in everything from smartphone screens and computer hard drives to electric vehicle motors and military guidance systems. Currently, China dominates the global supply chain, which is why the U.S. government is investing heavily to develop domestic sources.

What does the Department of Defense investment in MP Materials mean?

The $400 million investment from the Department of Defense into MP Materials represents a significant strategic shift in U.S. policy. It signals that rare earth elements and other critical minerals are now considered vital for national security, not just economic interests. This funding helps MP Materials expand its mining operations and develop processing capabilities, reducing America's dependence on foreign suppliers. For investors, this government backing reduces risk and indicates long-term support for the entire sector, potentially creating a favorable environment for other U.S.-based critical minerals companies.

How do critical minerals relate to electric vehicles and renewable energy?

Critical minerals like rare earths, lithium, and cobalt are essential building blocks for the clean energy transition. Electric vehicles require powerful permanent magnets (made with rare earths) for their motors, and lithium-ion batteries for energy storage. Similarly, wind turbines use rare earth magnets to generate electricity efficiently. As countries worldwide push for greener transportation and energy production, demand for these minerals is expected to skyrocket. The International Energy Agency estimates that a typical electric car requires six times more minerals than a conventional car, and an onshore wind plant requires nine times more minerals than a gas-fired plant.

What is "onshoring" and why is it happening with critical minerals?

Onshoring refers to the process of bringing manufacturing or resource production back to domestic soil rather than relying on imports. With critical minerals, the U.S. is pursuing onshoring because of growing concerns about supply chain security and geopolitical risks. Currently, China processes approximately 85% of the world's rare earths and dominates production of many other critical minerals. This concentration creates vulnerability for industries ranging from defense to consumer electronics. The pandemic highlighted these vulnerabilities when global supply chains were disrupted, accelerating government and private sector efforts to develop domestic sources and processing capabilities for these essential materials.

12 handpicked stocks

American Rare Earth Revival

This carefully curated group of stocks focuses on companies positioned to benefit from the U.S. government's push to secure domestic supply chains for rare earths and critical minerals. These resources are essential for defense systems, electric vehicles, and advanced technologies.

Han Tan | Market Analyst

Published on July 11

Top Picks from This Group

Here are a few of the assets in this group. Create an account to unlock the full list.

MP Materials Corp.

Current price

$70.96

As the direct recipient of the $400 million DoD investment, the company is at the epicenter of the push to create a domestic rare earth supply chain.

Energy Fuels Inc/Canada

UUUU

Current price

$16.82

This company is leveraging its White Mesa Mill to process and separate rare earth elements, making it a key player in the domestic critical minerals e...

This company is leveraging its White Mesa Mill to process and separate rare earth elements, making it a key player in the domestic critical minerals ecosystem.

Lithium Americas Corp.

LAC

Current price

$6.86

As the developer of the Thacker Pass project in Nevada, it represents a significant future source of domestic lithium, another critical mineral for na...

As the developer of the Thacker Pass project in Nevada, it represents a significant future source of domestic lithium, another critical mineral for national security and EV batteries.

RAMACO RESOURCES INC

METC

Current price

$35.05

5E ADVANCED MATERIALS INC

FEAM

Current price

$4.26

Sizzle Acquisition Corp

CRML

Current price

$8.10

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12 Month Growth Potential

Use the growth calculator to see how much investing in these assets could return over one year, based on aggregated analyst sentiment provided by Refinitive Ltd.

If you invested across these assets:

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In 12 months it might be worth:

$1,000.00

+141.80%

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About This Group of Stocks

Our Expert Thinking

The U.S. Department of Defense has invested $400 million in MP Materials to revitalize America's rare earth supply chain. This strategic government backing creates a powerful tailwind for companies involved in mining, processing, and recycling critical minerals needed for defense, EVs, and technology.

What You Need to Know

This theme represents a long-term opportunity focused on geopolitical trends and industrial independence. The government's commitment to onshoring vital supply chains helps de-risk domestic projects in the rare earths sector, creating a more secure environment for growth.

Why These Stocks

We've selected companies across the entire critical minerals ecosystem. This includes the direct recipient of federal funding, alongside miners, processors, and manufacturers of rare earths, lithium, uranium, and other strategic materials vital to American security and technological advancement.

Group Performance Snapshot

141.8%

Average 12 Month Profit

On average, analysts expect assets in this group to grow 141.8% over the next year.

11 of 12

Stocks Rated Buy by Analysts

11 of 12 assets in this group are rated Buy by professional analysts.

0.9%

Group Growth

This group averaged a 0.9% return last month.

Source: Analyst sentiment is provided by Refinitiv Ltd, a global leader in financial market data with over 40k business clients. Refinitiv Ltd is an independent third party to Nemo. This is not advice.

Why You'll Want to Watch These Stocks

🏛️

Government-Backed Potential

The $400 million Department of Defense investment creates a financial safety net that traditional mining ventures simply don't have. This government support signals long-term commitment to the sector.

🔋

The EV Connection

These critical minerals aren't just for defense. They're essential for electric vehicles, making this group a backdoor play on the EV revolution with the added stability of government priorities.

🌎

Supply Chain Reshuffling

As geopolitical tensions rise, countries are racing to secure their own supplies of strategic minerals. American companies with domestic production are suddenly finding themselves in the spotlight.

Get the full story on this Basket. Read our detailed article on its risks and potential.

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