How I Made $5000 in the Stock Market

Rare Earth Stocks Fall. This U.S. Company Has a Plan to Cut China Dependence.

Oct 28, 2025 05:25:00 -0400 by Al Root | #Commodities

Ramaco Resources’ Brook Mine rare earth project is located in Sheridan County, Wyoming. (PATRICK T. FALLON/AFP via Getty Images)

Key Points

Rare earth materials have been on investors’ minds, and in their nightmares, lately. They are wondering how to invest in the increasingly volatile sector amid trade tensions, while working out what a lack of rare earths could mean for American manufacturing.

Coming into Tuesday trading, shares of MP Materials , the largest rare earth miner in the Western Hemisphere, as well as USA Rare Earth and Ramaco Resources , two companies developing rare earth mines in the U.S., were up more than 210% this year on average, despite dropping almost 30% over the past week.

All three stocks pointed lower again ahead of the open Tuesday amid hopes of some sort of agreement between the U.S. and China later this week on the issue of rare earths export controls.

Threats by the Chinese to restrict rare earth exports essentially kicked off the rally in the first place. China dominates the rare earth industry with an estimated 85% of global processing capacity.

Global use of the 17 rare earth elements is relatively small; some 390,000 metric tons of rare earth oxides were mined in 2024, but growth is rapid, use has expanded 350% over the past decade, and they are critical for modern manufacturing, ending up in everything from electronics to electric vehicles to fighter jets.

The U.S. needs a more secure supply of rare earths, which is why the Defense Department inked a blockbuster deal with MP in July that included an equity stake, a price floor for rare earth products, and a guaranteed customer for new rare earth magnet capacity.

The deal is one way for the U.S. to break the Chinese monopoly. Ramaco, which has an existing metallurgical coal business, has another idea to help achieve rare earth independence.

Monday, it announced plans) for the first National critical minerals stockpile, its calling the “Strategic Critical Minerals Terminal,” or SCMT, at the company’s Brook Mine in Wyoming. The idea: Inventory is another way to reduce China’s influence in the market.

“The SCMT stockpile is intended to address both private and public needs for secure, reliable access to rare earth elements and critical minerals vital for the nation’s critical rare earth applications,” reads part of the company’s news release. “By leveraging Ramaco’s mineral resources and experienced third-party commodity structured finance expertise, the initiative aims to deliver long-term solutions for extraction, processing, and inventory management.”

Eventually, Ramaco hopes to process its own ore into finished products, as well as ore from other rare earth producers, at its facilities. That’s still a ways down the road. Ramaco isn’t producing rare earth materials yet.

Along with announcing the SCMT, Ramaco announced third-quarter earnings on Monday evening. Ramaco reported earnings before interest, taxes, depreciation, and amortization, or Ebitda, of $8.4 million. Wall Street was looking for $5.4 million, according to FactSet.

Results look fine, but Ramaco isn’t being valued based on its coal business. It’s being valued based on its rare earth potential. Through Monday trading, shares were up 257% this year.

The stock plummeted 16.9% to $28.22 on Tuesday, while the S&P 500 and Dow Jones Industrial Average added 0.2% and 0.3%, respectively.

Shares of MP and USA Rare Earths fell 1% and 6.8%, respectively.

Investors were also digesting an agreement between Japan and the U.S. to develop rare earths. It looks similar to an agreement the U.S. recently announced with Australia. Working with allies is another way to reduce Chinese influence.

Write to Al Root at allen.root@dowjones.com