China tightens rare earths grip, stocks MP, LAC, TMQ surge

USA Rare Earth CEO: We are in close communication with White House

Shares of U.S. rare earth and critical mineral miners surged Thursday after China tightened restrictions on exports, fueling market speculation that the Trump administration will move more aggressively to invest in building out a domestic supply chain.

USA Rare Earth soared 15%, NioCorp Developments surged about 12%, Ramaco Resources rallied more than 11%, Energy Fuels advanced over 9%, and MP Materials gained more than 2%. Albemarle popped about 5%, Trilogy Metals rose nearly 4%, and Lithium Americas advanced about 2%.

Beijing is now requiring foreign entities to obtain a license to export products that contain rare earths worth 0.1% or more of the goods’ value, according to China’s Ministry of Commerce. Companies will also need export licenses if they use China’s extraction, refining or magnet recycling technology.

“The White House and relevant agencies are closely assessing any impact from the new rules, which were announced without any notice and imposed in an apparent effort to exert control over the entire world’s technology supply chains,” an administration official told CNBC.

China imposed the restrictions ahead of an expected meeting between President Xi Jinping and President Donald Trump on the sidelines of the Asia-Pacific Economic Cooperation summit in Seoul, South Korea, later this month.

Rare earths have been a major point of contention in trade talks between Beijing and Washington. Beijing dominates the global rare-earth supply chain and the U.S. is dependent on imports from China.

MP Materials CEO on U.S. government deal: We can truly solve the rare earths magnetics crisis

‘Game of chicken’

The White House and the U.S. critical mineral industry have accused China of manipulating the market to drive foreign competition out of business. Rare earths are a subset of critical minerals that are crucial inputs for U.S. weapons platforms, robotics, electric vehicles and electronics among other applications.

The Defense Department struck an unprecedent deal with the largest U.S. rare earth miner MP Materials in July that included an equity stake, the first big salvo in the Trump administration’s push to back the U.S. industry against China. The White House has subsequently taken stakes in Lithium Americas and Trilogy Metals, fuelling investor speculation that more deals will follow.

“This action reinforces the need for forward-leaning U.S. industrial policy,” a MP spokesperson said of China’s export restrictions. “Building resilient supply chains is a matter of economic and national security.”