3 Rare Earth Stocks for 2023 to Reduce Reliance on China

There are some big trends at play that benefit rare earth stocks. Buying into these companies can give you access to vital elements. We use them in a wide range of products, from iPhones to electric cars.

We also use rare earth metals in lasers, jet engines and many other military machines. They’re vital for some of our defense systems. However, China dominates this market. It holds roughly 70% of the world’s known rare earth reserves.

The U.S. is making moves to lower its reliance on China. New government funding is helping to improve U.S. production. This is opening up new investing opportunities. Let’s start by taking a closer look at rare earth metals and the industry as a whole. Then, below, you’ll find some of the best rare earth stocks to consider buying in 2023.

What Are Rare Earth Metals?

Contrary to what the name suggests, rare earth metals aren’t too rare. They’re relatively plentiful in Earth’s crust. This group of metals includes 17 silvery-white soft metals.

One of the metals, cerium, is more common than copper. And the reason these metals are rare is due to their dispersion and low concentration. As a result, worthwhile ore deposits are sparse.

Nonetheless, China has found ways to corner the market over the years. It’s been the world’s largest supplier, and the country has outsized control over the industry. Back in 2010, it cut off rare earth exports to Japan due to a maritime dispute. That was a huge disruption, and these moves can devastate other markets too.

To counter the supply control, countries have been stockpiling rare earth metals. On top of that, they’ve been making other moves to reduce their reliance on China. For example, President Biden’s $2 trillion infrastructure plan should help boost domestic supply chains for rare earth metals.

To get a better idea of movements in the industry, let’s look at some company specifics…

Top 3 Rare Earth Metals Stocks

MP Materials (NYSE: MP)

MP Materials owns and operates Mountain Pass. It’s the only integrated rare earth mining and processing site in North America. MP Materials is working to help improve national security as well as reduce carbon emissions.

The bastnaesite ore at Mountain Pass provides one of the world’s highest quality rare earth deposits. It has a greater than 8% average grade. The original mining production started in 1952 but stopped in the 1990s. Then, in 2017, it came under new ownership and started back up.

Since, MP Materials has made great strides and now produces about 15% of the global supply of rare earths. This easily makes it one of the best rare earth stocks to consider. The company’s revenue should continue to climb higher with new projects on the horizon.

For now, MP Materials’ products come in the form of a rare earth concentrate. This used to require further processing in Asia. But MP Materials recently relaunched onsite processing. This helps set the foundation for a self-sufficient rare earth industry in the U.S.

Texas Mineral Resources (OTC: TMRC)

Texas Mineral Resources is the smallest of the rare earth metals stocks on this list. It trades over the counter and therefore has higher risk. Although, with that risk, comes the potential for higher reward.

This company is speculative because it’s not yet producing any rare earth metals although it has the rights to mine the Round Tops project in Texas. This is projected to be one of the most cost-competitive producers in the world. And it contains 16 of the 17 rare earth metals.

To extract the metals, Texas Mineral Resources has an agreement with USA Rare Earth LLC. This partner might earn up to 70% interest with a $10 million investment. After that, it can earn up to an additional 10% with a $3 million cash payment to Texas Mineral Resources.

The current goal is to start commercial production in 2023. There are many steps before that… But if it plays out, this could be a great rare earth investment if you’re looking for growth potential. And it could help the U.S. become less reliant on China.

There are many more investment opportunities beyond rare earth stocks. The markets are always moving and the best opportunities come and go. So, feel free to continue exploring more of our recent investment research…