Governments around the world are pushing for a greener future.
One full of renewables and electric vehicles. However, for it to happen, we must get our hands on far more rare earth supply outside of China.
China has announced tougher regulations over the rare earth industry, from mining to exports.
According to Bloomberg, “The Chinese government is currently conducting a review of its rare-earths policy. Officials view the technology needed to refine and purify the raw materials as a more powerful weapon in protecting state interests than the actual minerals, and is looking at banning sales of the technology to some countries or companies. While China has no plans to restrict shipments of rare earths to the U.S., it is keeping the plan in its back pocket should a trade war break out again.”
That’s part of the reason the U.S. – which relies on 80% of China for rare earth imports is trying to find alternative sources.
While investors can always buy rare earth stocks like Lynas Corp. (LYSCF), MP Materials (MP), or Rare Element Resources Ltd. (REEMF), another interesting way to trade it is with an ETF. Look at the VanEck Vectors Rare Earth / Strategic Metals ETF (REMX), for example. At $92 a share, the ETF offers diversification with Lynas Rare Earth, Lithium Americas Corp., Galaxy Resources, Livent Corp., Jupiter Mines Ltd., and Ganfeng Lithium Co. Ltd.
While REMX has already exploded from an October 2020 low of $50 to $92.90, it could see higher highs as the race for secure rare earths heats up.