ReElement Technologies stock soars after securing $1.4B government deal
Investing.com -- Geopolitical tensions and U.S.–China decoupling have opened a “rare window” for non-Chinese rare-earth miners and refiners to scale production and achieve profitability, according to BCA Research.
“Rare-earth production outside China is a nascent investment theme; we are structurally bullish and recommend building a position by buying on dips by investing in a diversified basket of miners,” BCA strategists led by Irene Tunkel said in a note.
China’s export restrictions have reignited investor interest in rare-earth elements (REEs), sending the VanEck Rare Earths and Strategic Metals ETF up more than 80% year-to-date, with stocks such as MP Materials, USA Rare Earth, and Lynas doubling in value.
Investors can gain exposure through diversified baskets or ETFs to mitigate volatility, strategists said.
While near-term consolidation is possible after the rally, the long-term case remains compelling, they said. The team cautioned that miners have already enjoyed a powerful run, and “any sign of a U.S.–China truce could trigger a sell-off,” creating opportunities for investors to add on weakness.
“The build-out will be lengthy, costly, and fraught with challenges, but government support materially improves the odds,” they wrote.
BCA points to the Trump administration’s renewed industrial policy aimed at reviving domestic mining and refining capacity.
Executive orders, deregulation, and Department of Defense grants are helping fund new projects, including a $400 million DoD investment for a 15% stake in MP Materials and multi-billion-dollar joint financing pacts with Australia.
The firm also highlighted broader global cooperation, including initiatives in Japan and Saudi Arabia to diversify supply chains and expand refining capacity outside China.
It flags a series of policy tailwinds underpinning the REE sector. “The U.S. government is loosening regulations, extending grants, and investing in miners; it is also protecting a fledgling industry with tariffs," the note said.
The strategists point out that Washington’s goal is to establish a fully integrated mine-to-magnet supply chain by 2027, though they warn the U.S. remains years away from minerals independence.
While acknowledging near-term risks from potential U.S.–China trade de-escalation or tighter financing conditions, BCA argues that long-term demand drivers remain intact. Rare earths are essential in technologies ranging from EV motors and AI data centers to defense systems.
The strategists believe that structural tailwinds—decoupling, policy momentum, and sustained demand—“should underpin the industry’s revival and drive companies toward new valuation highs.”