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Rare Earth Boom Lures Investors Amid Geopolitical Shifts and Supply Chain Risks

From China's export bans to a US-Australia mining alliance, the race for rare earth dominance is rewriting investment rules. But can REMX's gains outlast the volatility?

,   and  Administrator
2 min read
The image shows a graph on a white background with text that reads "U.S. Trade in Goods with...
The image shows a graph on a white background with text that reads "U.S. Trade in Goods with China". The graph displays the number of US trade in goods with China over a period of time, with the x-axis representing the years and the y-axis indicating the amount of trade. The graph is divided into two sections, one for imports and one for exports, and each section is further divided into different colors, indicating the different levels of trade between the two countries.

Rare Earth Boom Lures Investors Amid Geopolitical Shifts and Supply Chain Risks

A well-known financial writer has changed their long-standing policy against politically sensitive investments. They now hold shares in the Vaneck Rare Earth Strategic Metals ETF (REMX), a fund tied to rare earth metals. This shift follows major price surges in these critical minerals, driven by geopolitical tensions and supply chain disruptions.

Rare earth elements are notoriously difficult to mine and refine. Over 85% of global deposits sit in China, which also controls roughly 60% of production and 90% of refining. This dominance has made the sector highly volatile, especially as China tightened export restrictions at the end of 2025.

Since then, countries have rushed to reduce dependence on Chinese supply. In October 2025, US President Trump and Australian Prime Minister Albanese announced an $8.5 billion partnership at the White House. The deal funds mining projects and a gallium refinery in Australia. Meanwhile, Ucore plans commercial processing plants in North America by late 2026, using its RapidSX™ technology. Brazil has also seen early-stage exploration by Canamera Energy Metals in Turvolândia and São Sepé. In the US, researchers at South Dakota School of Mines and Technology are testing ways to extract rare earths from coal waste, though the method remains in development.

REMX has benefited from these geopolitical shifts. Its momentum stems from a historic price spike in critical minerals outside China. The fund's ROAR score sits at 40, indicating neutral risk. Yet its performance remains unpredictable, with extreme volatility and concentration risks weighing on long-term stability.

The fund's future hinges on geopolitical tensions and supply chain strategies. As countries diversify production, REMX could see further gains—but its ties to US-China relations and AI technology keep it exposed to sudden policy shifts. Investors face both high potential rewards and significant risks in this volatile sector.

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