Summary
China has quietly enforced its 2025 rare earth mining and smelting quotas to just two state-owned companies, consolidating control. In response, the U.S. Department of Defense is backing MP Materials with equity investment and a guaranteed price floor to develop secure production outside China.
Key Points
• China issued its first batch of 2025 rare earth quotas without public disclosure, granting access exclusively to China Rare Earth Group and China Northern Rare Earth Group.
Link: https://www.reuters.com/world/china/china-quietly-issues-2025-rare-earth-quotas-sources-say-2025-07-18/
• Beijing launched a crackdown on smuggling of critical minerals, including gallium, germanium, tungsten, and rare earths.
Link: https://www.wsj.com/world/asia/china-western-defense-industry-critical-minerals-3971ec51
• The U.S. Department of Defense guaranteed a 10-year price floor of $110/kg for NdPr, took up to a 15% equity stake in MP Materials, and is financing U.S. magnet production.
Link: https://www.reuters.com/sustainability/climate-energy/us-rare-earth-pricing-system-is-poised-challenge-chinas-dominance-2025-07-14/
• Following the MP-DoD deal, Lynas Rare Earths forecasted rising prices and rallied on investor sentiment.
Link: https://www.reuters.com/world/asia-pacific/lynas-sees-higher-rare-earths-prices-after-us-backs-mp-materials-2025-07-24/
Why It Matters
• China’s opaque quota policy solidifies its grip over global supply and pricing dynamics.
• The U.S. pricing floor strategy introduces a new benchmark for ex-China production.
• MP Materials and Lynas are positioned for outsized gains if pricing support holds.
Watchlist Companies
• MP Materials – U.S.-based miner with DoD-backed magnet facility and guaranteed pricing.
More info: https://www.reuters.com/company/mp-materials-corp/
• Lynas Rare Earths – Australia-based producer with high exposure to global price trends.
More info: https://www.reuters.com/company/lynas-rare-earths-ltd/
Critical Minerals Spotlight
Neodymium / Praseodymium – Permanent magnets for EVs, wind turbines, and defense
Dysprosium / Terbium – Heavy rare earths for advanced motors and military applications
Action Points
• Monitor China’s quota announcements and enforcement trends.
• Track MP’s Texas magnet facility build-out and production volumes.
• Watch for pricing power and expansion signals from Lynas and Neo.
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Informational purposes only and is not financial or legal advice. Information is believed accurate but not guaranteed.