The Rare Earth Breakthrough Behind 550% Gains

Two companies are breaking China’s rare earth monopoly and one of them just delivered a 550% return for investors. More from EasyAssetManagement's report.

Summary

• Rare earth elements (REEs) may sound obscure, but they are central to technologies we use every day like electric vehicles, wind turbines, smartphones, defense systems, and even MRI machines.|
  
  
• China controls roughly 70% of mining, 85% of refining, and 90% of magnet production in the rare earth industry. This concentration creates geopolitical risk, since export restrictions or trade disputes could disrupt global supply. That’s why the U.S., Australia, and others are urgently building alternative supply chains.
  
  
• Two companies stand out: Lynas (Australia) and MP Materials (U.S.). Lynas became the first non-Chinese producer of heavy rare earths in 2025, while MP surged over 550% in a year, backed by U.S. government partnerships and its plan to control the full supply chain from mining to magnets. 

What Are Rare Earth Elements (REEs)?

Rare earth elements (REEs) are a generally defined as a group of 17 metallic elements known for their unique magnetic, conductive, and luminescent properties. Despite the name, they’re not especially rare in the Earth’s crust. However, economically viable deposits are far less common, and extracting and refining them is both technically complex and environmentally sensitive.

These elements have become essential to modern life. Whether you’re driving an electric vehicle, watching a drone in action, or scrolling through your phone, REEs are working quietly behind the scenes to make it all happen.

Powering the Economy

From powering the clean energy transition to enabling cutting-edge defense and digital technologies, rare earth elements are the backbone of modern innovation. Their unique magnetic, thermal, and optical properties make them indispensable.

 Source: National Energy Technology Laboratory 

 Magnets Are King

• Neodymium (Nd) and Praseodymium (Pr) are the stars behind NdFeB magnets, the strongest magnets on Earth. These power the motors in EVs, wind turbines, robotics, and more. They’re now the main economic driver of the REE sector.
• Dysprosium (Dy) and Terbium (Tb) are added to these magnets to help them perform at high temperatures, making them essential in vehicle motors and defence tech.

By some estimates, magnets alone make up nearly 80% of REE market value, and that share could be expected to rise over the next decade as the world electrifies faster.

Source: Rainbow Rare Earths Annual Report 2024 

Extreme Environment Specialists

• Samarium (Sm) is used in SmCo magnets, which hold up in extreme heat—perfect for missiles and jet engines.

Industrial All-Rounders

• Cerium (Ce) and Lanthanum (La) are produced in high volumes and show up in everything from catalytic converters to glass polishing, battery tech, and oil refining.

Lighting and Displays

• Europium (Eu), Terbium (Tb), and Yttrium (Y) make your screens shine literally. These REEs are used in LEDs, TVs, and monitors to produce vibrant colours and white light.

Medical and High-Tech Niche Uses

• Gadolinium (Gd), Erbium (Er), Lutetium (Lu), Thulium (Tm), and Scandium (Sc) show up in MRI machines, fiber-optics, radiation detection, and high-strength alloys used in aerospace.

Global Shift Toward Supply Diversification

As demand rises, so does the importance of a stable, secure, and diversified REE supply chain, especially for Western economies driving the energy transition and high-tech manufacturing.

Currently, China dominates nearly every step of the rare earth value chain:

• ~70% of global REE mining,
• ~85% of refining capacity, and
• ~90% of global magnet manufacturing.

This concentration creates strategic vulnerabilities. REEs have, at times, been subject to export controls during moments of geopolitical tension. It is clear that geopolitics plays an increasingly important role in how countries think about securing access to these critical materials.

That’s why western nations, most fervently the U.S., are working to build alternative supply chains and investors are starting to pay attention.

Source:rareearths.com

Lynas Rare Earths (ASX: LYC)

Lynas is the world’s largest, rare earths producer outside China. Based in Australia, it operates the high-grade Mt Weld mine, with downstream processing done at its Lynas Advanced Materials Plant (LAMP) facility in Malaysia.

In 2025, Lynas became the first non-Chinese company to produce heavy rare earth oxides like dysprosium and terbium, an important milestone for industries relying on high-temperature magnets.

To strengthen its position, Lynas also built a cracking and leaching plant in Kalgoorlie, Western Australia, allowing it to meet environmental regulations in its Malaysian plant while increasing domestic processing capability. It is now constructing a heavy REE separation facility in Texas, backed by U.S. government support, further enhancing its international reach.

With a strong track record and growing output, Lynas offers investors access to an established and expanding player in a high-demand sector.

 Source: EasyEquities 12/08/2025 13:00 

MP Materials (NYSE: MP)

Source: MP Materials 2025 Q2 Results Presentation

MP Materials runs the Mountain Pass mine in California, the only active rare earths mine in the U.S. What makes MP stand out is its ambition to become fully vertically integrated, with mining, refining, and magnet manufacturing all under one company roof.

The company is currently developing a large-scale magnet factory in Texas and has secured long-term partnerships with Apple, General Motors, and the U.S. Department of Defense.

A landmark agreement was made between MP materials and the US Government, with the DoD agreeing to provide MP with support through:

• Guaranteed NdPr pricing,
• A secured offtake agreement
• Government-backed funding and equity support.

This visibility has driven strong interest from investors and could help shield MP from some of the price volatility that other rare earth companies may face. With its strategy to control the entire value chain well underway, MP is positioning itself as a rare earth powerhouse anchored in a U.S.-based supply chain.

The DoDs involvement served as the as an added impetus driving the companies share price return of over 550% over the last year.

 Source: EasyEquities 12/08/2025 13:00 

Key Risks to Keep in Mind

While the long-term outlook is exciting, rare earths come with important risks:

• Pricing volatility: REE prices can fluctuate significantly based on supply-demand imbalances and with China holding such a large share of supply, this can create market uncertainty and volatility.
• Project execution: Building advanced facilities like cracking plants or magnet factories takes time, capital, and technical skill.
• Regulatory pressure: Environmental and political considerations can affect where and how companies operate (as Lynas has experienced in Malaysia).

Despite these risks, the demand picture remains strong, and the supply pipeline outside China is still limited—a combination that could favour companies with a head start.

Small Elements, Big Future

Rare earth elements may not get the same spotlight as gold, but they’re absolutely central to the current and next chapter of global innovation. From EVs to wind turbines, smart tech to defence systems, REEs are everywhere and their importance is only growing.

As nations race to build secure supply chains and electrify their economies, rare earths remain indispensable. Whether you’re drawn to the scale of Lynas, the ambitious vertical strategy of MP Materials, or simply want to understand the materials shaping our future this is a space worth watching.

EasyAssetManagement's View

At EasyAssetManagement, we take a thematic approach to investing, focusing on long-term structural trends that are reshaping industries and economies. As part of this approach, we actively monitor a range of themes that we believe present meaningful opportunities for investors. One of these themes is Critical Materials, under which we closely track developments in rare earths due to their growing strategic and economic importance.

If you are looking for exposure to global equities, AI-themed opportunities, or a balanced investment strategy check out our EasyETFs Global Equity Actively Managed ETF, EasyETFs AI World Actively Managed ETF and EasyETFs Balanced Actively Managed ETF.

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