A quiet sector suddenly caught fire… What did America and China do to the rare earths market?

Investors around the world are racing to invest in rare earth companies, causing their shares to rise to record levels, as American attempts to break China’s grip on Supplies of essential metals have created a fever in this previously quiet sector.

An American quest to break Chinese dominance

The White House is seeking to take radical steps to start producing rare earths outside China, which has long dominated supplies of metals used in smartphones, electric vehicles, military missiles, and fighter planes.

Shares of companies listed in the United States rose, such as: "MB Materials"and"USA Rare Earth"and"Australia Lynas" More than doubled this year, as Washington strengthened its support for an industry struggling to compete with low-cost producers in China, it said. "Financial Times"

The rise in stock prices extended to producers of base metals and other metals, including lithium, cobalt, and germanium. Last month alone, the United States acquired stakes in two Canadian mining companies "Lithium Americas" and"Trilogy Metals". Since then, the value of the two companies’ shares has doubled and tripled, respectively.

Chinese Fist

Meanwhile, China’s exports of rare earth magnets declined last September, according to "Reuters"raising concerns that the world’s largest supplier may use its dominance over a key industrial component "As a pressure card" In Trade talks with Washington.

Chim Lee, a senior analyst at the Economist Intelligence Unit, said: "Sharp fluctuations in rare earth exports show that China knows it holds a major card in international trade talks."

The battle between the two superpowers over rare earths intensified this month, after Beijing unveiled new export controls that force foreign companies to obtain approval from the Chinese government before allowing them to import magnets produced in China.

Companies seize the opportunity

Some companies have exploited this conflict to raise money. Last Friday, I gathered a company "Standard Lithium"" $130 million in an initial public offering, while the company announced "Critical Metals" Last week it raised $50 million from an institutional investor, and its shares have tripled since the start of the year.

Meanwhile, some analysts have warned that the stock market boom has provided fertile ground for opportunists.

Gareth Hatch, founder of "Strategic Materials" British Mining Consultants: "Many companies have exploited Small rare earth miningsituation, with weak and usually meaningless announcements, as its share prices benefited from the apparent struggle over rare earths.".

He added "Although I cannot describe the situation as a bubble yet, investors should review their calculations before investing in this sector."

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