Uncommon earths shares are gaining renewed investor consideration following latest US authorities insurance policies that sharpen its deal with securing crucial mineral provide chains.
In early 2025, the Trump administration signaled stronger commitments to cut back American reliance on China for uncommon earth components (REEs) — particularly these important for protection, power and superior manufacturing.
This coverage momentum is driving capital into firms positioned to assist US provide chain independence, significantly these with modern and scalable uncommon earths options.
The US Division of Protection, Division of Vitality and the White Home have all expressed mounting concern over the vulnerability of American industries as a result of China’s overwhelming management of REEs — over 90 p.c of world rare earth magnet production. These magnets are important for protection programs, robotics, electrical autos (EVs) and synthetic intelligence applied sciences.
Amid these considerations, the Trump administration has been advancing govt actions designed to quick monitor home manufacturing and processing capability. Throughout his first time period in workplace, Trump signed Executive Order 13953, which addressed the specter of reliance on overseas adversaries for crucial minerals and instituted assist for home mining and processing industries.
Because the commerce struggle with China escalates, the US president doubled down on this agenda with a brand new govt order, issued in March 2025, invoking his wartime powers to strengthen the US crucial minerals provide chain.
This collection of coverage strikes has boosted investor enthusiasm for rare earth equities. MP Supplies (NYSE:MP), the only US-based uncommon earths miner, has seen its inventory worth climb roughly 70 p.c year-to-date, pushing its market capitalization to over US$4 billion, buoyed by its strategic position in home manufacturing and up to date coverage endorsements.
Equally, USA Uncommon Earth (NASDAQ:USAR), which went public in early 2025, noticed a 70 percent surge on its Nasdaq debut and now holds a valuation close to US$887.5 million, reflecting sturdy investor confidence in its plans to ascertain a complete US uncommon earths provide chain.
These positive factors underscore the market’s optimistic response to governmental efforts aimed toward lowering reliance on overseas sources, significantly China, for crucial minerals important to protection and superior applied sciences.
Challenges in conventional provide chains
China’s dominance within the uncommon earths provide chain — from mining to processing to remaining manufacturing — presents a crucial vulnerability for the US, particularly in sectors like protection, robotics and synthetic intelligence.
NdFeB (neodymium-iron-boron) magnets, important for the whole lot from drones and EVs to missile steerage programs and fighter jets, are largely sourced or processed in China. Whereas MP Supplies mines uncommon earths in California, most refining nonetheless occurs abroad, underscoring an absence of home downstream capability. Including to the problem, conventional uncommon earths mining is environmentally damaging and sluggish to allow within the US.
This pressing want for provide chain independence can be driving curiosity in different approaches like recycling and home magnet manufacturing.
CoTec Holdings: Positioned for the following section of uncommon earths independence
Because the US intensifies efforts to safe crucial mineral provide chains, CoTec Holdings (TSXV:CTH,OTCQB:CTHCF), with a modest market capitalization of roughly US$33 million, is rising as a key participant in creating home uncommon earth magnet recycling capabilities. By means of a 50/50 three way partnership with Maginito, CoTec is advancing HyProMag USA, a challenge aimed toward establishing a uncommon earth magnet recycling and manufacturing facility within the Dallas-Fort Value space of Texas.
HyProMag USA will leverage the patented Hydrogen Processing of Magnetic Scrap (HPMS) expertise, initially developed on the College of Birmingham. This modern course of allows the environment friendly restoration of NdFeB magnets from end-of-life merchandise and affords a low-cost, environmentally sustainable different to mining.
HyProMag’s “short-loop” course of supplies a sooner and fewer advanced method in comparison with standard chemical-based strategies. Through the use of hydrogen fuel, magnets inside digital scrap are brought about to fracture naturally with minimal pre-processing. The demagnetized materials can then be sieved into powder type, which is re-pressed and sintered into new magnets — all whereas bypassing most of the environmental challenges and delays related to mining and refining.
The Texas facility is projected to provide 750 metric tons of recycled sintered NdFeB magnets yearly by 2027, doubtlessly supplying as much as 10 p.c of US home demand inside 5 years by tripling the capability contemplated by the Feasibility Research launched in November 2024.
To place this in perspective, CoTec’s market capitalization of simply US$33 million is a fraction of its bigger friends — regardless of its superior growth stage and the strategic significance of its recycling mannequin. The challenge’s optimistic November 2024 feasibility examine highlights sturdy economics, with a internet current worth of US$262 million at present costs and as much as US$503 million based mostly on projected pricing eventualities.
The challenge has garnered assist from the Minerals Security Partnership, a coalition of governments together with the US, aimed toward creating safe and sustainable crucial mineral provide chains. A optimistic feasibility examine launched in November 2024 highlighted sturdy economics for the challenge, estimating a internet current worth of US$262 million at present costs, with potential to succeed in US$503 million based mostly on forecasted costs.
By specializing in recycling and home manufacturing, CoTec Holdings is strategically positioned to contribute to the US objective of lowering reliance on overseas sources for crucial supplies, significantly in sectors very important to nationwide safety and technological development.
Weighing the dangers and rewards in uncommon earths investing
Authorities backing, mounting geopolitical urgency and speedy demand development for purposes in protection, synthetic intelligence, EVs and clear power applied sciences all level to a robust long-term outlook for uncommon earths.
The US push to safe home uncommon earths provide chains is creating sturdy tailwinds for traders, however the sector stays nuanced. Main gamers like MP Supplies have benefited considerably from early mover standing and authorities assist. Equally, USA Uncommon Earth, which went public in early 2025, debuted with a valuation of US$887.5 million regardless of nonetheless being in pre-production phases.
In contrast, CoTec Holdings’ decrease market cap affords traders a markedly completely different worth entry level. But, CoTec is progressing at a sooner tempo than many bigger friends, with a US-based uncommon earth magnet recycling facility already in superior growth.
This distinction reveals a major worth hole out there. Whereas bigger uncommon earth equities might supply liquidity and visibility, firms like CoTec present publicity to near-term manufacturing, strategic alignment with US coverage objectives and cutting-edge expertise at a a lot decrease valuation.
After all, traders ought to weigh this potential towards sector-wide dangers. Uncommon earths manufacturing and processing are technically advanced and capital intensive, usually going through lengthy growth timelines and regulatory hurdles. Worth volatility is one other issue, as uncommon earths markets are comparatively illiquid and will be impacted by sudden adjustments in international provide — significantly from China.
However for these in search of to take part within the reshaping of the US crucial minerals panorama, firms that mix modern fashions with accelerated growth timelines might supply a horny mixture of upside potential and policy-driven assist.
Investor takeaway
Knowledgeable investing on this area requires balancing optimism about macro-level developments with a clear-eyed view of execution challenges. As US coverage continues to favor home uncommon earth growth, the fitting gamers may see important upside — particularly these aligned with sustainable, scalable provide chain options.
In contrast to conventional miners, CoTec affords traders publicity to a low-footprint, tech-enabled mannequin that could be higher aligned with future regulatory and environmental expectations. In an period of provide chain instability, firms that may rapidly deploy home capability with out the lengthy timelines of mine growth might have a definite benefit.
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