“Reams can be written… for this or that metal. But the fundamental, long-term situation is much the same: more demand, inadequate supply, and higher prices.”
—Adrian Day, Investing In Resources
July 23, 2025 — My investing journey in the Rare Earth Elements (REE) space began about 15 years ago, and I’ve learned some valuable things over that span of time, and want to share those key takeaways with readers here.
I’m seeing a lot of hype starting to circulate around the rare earths space again, and up until now have resisted weighing in on the sector.
Actually, there is a lot of hype around a number of specialty metals and critical minerals at present, and I have many thoughts about this topic for future articles. For now though, I want to focus this discussion on the rare earth sector specifically.
- 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 (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…
- This month, I’ll share some companies I’ve been following for many years that have legitimate business strategies and value propositions for consideration in this sector as a jumping off point for better understanding this space.
Just as a cautionary note: Keep in mind that when small niche sectors become the proverbial “hot commodities,” then they become suddenly surrounded by a lot of garbage stocks.
Hot money promoters and tired old projects pop back up like fungus all over the resource space. Unfortunately, these lure in unwitting investors to what are seemingly exciting narratives. Then when you look under the hood, these companies have very little substance to back up their big marketing pitches.
Being someone that both thrived and then was decimated by the rare earths sector in the prior cycle, and over time has learned a lot of tough investing lessons about this space, I hope to shorten the learning curve for Grey Swan Invetment Fraternity members.
The goal will be to help folks peer through the layer of opaque fog and marketing hype around this sector, and to separate the signal from the noise. We want to get to the core of what could be genuine opportunities, as well as steering clear of all junk stocks littered along the journey that should be avoided.
So, let’s dive right in.
China’s Rare-Earth Ban: 2010 Redux?
My foray into investing within the resource sector started with gold and silver mining companies back in 2010 (after having been stacking silver starting in 2008 as a result of the Great Financial Crisis).
By late 2010 and 2011 I had really branched out and had become obsessed with the resource sector. But hey… it was in a boom back then – platinum, palladium, uranium, and yes, also rare earth elements.
Back then (2010-2012) China was putting export quotas on the REEs (since they had and still mostly have a stranglehold on processing, separation, and refining these metals).
So, it was a very similar environment that we see today with their strategy of export bans on many critical minerals. That restriction in supply was giving a big pop at that time to these niche metals used in electronics, defense, high-powered permanent magnets, windmills, lasers, and so many areas of the modern world.
Check out this headline and article from 2011 (which is just one of hundreds circulating in the prior rare earths boom), and consider how eerily similar it reads to the environment we are in today:
China’s Export Restrictions On Rare Earths – October 06, 2011
“In recent years, the Chinese government has cut down the number of export enterprises, export quotas and the annual exploitation volume of rare earth ores. Users of the minerals in industrialized countries now face tighter supplies and higher prices. China has cut its export quotas for rare earths by 35 percent in the first round of permits for 2011, threatening to extend a global shortage of the minerals needed for smart phones, hybrid cars and guided missiles.”
So, we’ve seen this movie before. In fact, we saw something similar with REEs in 2020-2022 during all the disjointed supply chain challenges during the global pandemic lockdowns, which affected Chinese exports in a significant way for even a year longer than North America and Europe – well into 2022.
What we are starting to see again here in 2025 is just the latest iteration of this cyclical shortage and pricing squeeze on rare earth elements, due to China’s unyielding grip on the sector.
Rare Earths At a Glance
Before we get to the investment opportunity, let’s back up and get on the same page as to what precisely these rare earth elements are. This is an incredibly complex niche sector with metals names that are hard to pronounce, and with uses that are too many to list.
They then break down into the “heavy” and “light” rare earths, and even metals that aren’t technically rare earths but get bundled along with them traditionally.
Here is a quick primer:
The rare-earth elements (REE) are a set of 17 nearly indistinguishable lustrous silvery-white soft heavy metals.
Compounds containing rare earths have diverse applications in electrical and electronic components, lasers, glass, magnetic materials, and industrial processes.
The term “rare-earth” is misleading because they are not actually scarce. Rather, they are relatively plentiful in the entire Earth’s crust (cerium being the 25th-most-abundant element at 68 parts per million, more abundant than copper). However, in practice, they are spread thinly as trace impurities. So to obtain rare earths at usable purity requires processing enormous amounts of raw ore at great expense; thus the name ‘rare’ earths.
Because of their geochemical properties, rare-earth elements are typically dispersed and not often found concentrated in rare-earth minerals. Consequently, economically exploitable ore deposits are sparse.
There are many more things one can learn if interested to take a deep dive into this niche sector. However, after having done that personally for a long time, I’ve decided it is really too many rabbit holes for people to chase and get lost down. Ultimately, it is enough to know that rare earths are in continuous high demand, and that there are very few companies that can produce a product for sale to the market.
For a great visual of this sector, have a look at prior peaks and valleys on the longer-term chart of the VanEck Vectors Rare Earth Strategic Metals ETF (REMX) – launched during the go-go years of the rare earth bubble from 2010-2012, the 2018 flare up in prices, the 2020-2022 pandemic crimping the supply chain, and the environment now.
The next cycle is likely kicking off with the recent round of Chinese export bans on many critical minerals, including some of the rare earths.
It is interesting that the REMX chart above doesn’t really show the recent reaction higher by a number of junior rare earth stocks that have surged on the recent tariff tantrums news flow.
If we’re prepping for a similar move higher in rare earths, REMX may be poised to deliver substantial gains for investors in the quarters ahead.
In the future, we’ll get deeper into some of the other opportunities in the rare earth space. Just be aware that many traditional mining companies may have some exposure to rare earths as part of their production of traditional metals.
Shad Marquitz
Grey Swan Investment Fraternity
P.S. from Addison: Shad’s insights here first appeared in the May issue of the Grey Swan Bulletin, well before the Department of Defense bought a stake in MP Materials and put rare earth stocks back on the map.
That’s also why we asked Shad to join us again on Grey Swan Live! tomorrow, July 24 @ 11 a.m. ET.
Shad regaled us last time with a litany of tickers he likes in the natural resource space. We covered rare earth minerals, uranium and nuclear energy, precious metals and building materials.
Tomorrow, we’ll get a chance for another full run down with Shad. He’s very articulate on investing in natural resources. If you’re interested in this overlooked space that’s starting to heat up again, you’ll want to join us Live!
Details for fully-paid readers to follow. Enjoy!
