Rare earth stocks jump after Trump launches $12 billion critical minerals stockpile

U.S.-listed rare earth miners surged on Tuesday, following President Donald Trump’s announcement to establish a critical mineral reserve.

Critical Metals advanced more than 10%, USA Rare Earth rose nearly 11%, and MP Materials gained about 4%. Shares of Energy Fuels werea about 8% higher, while Idaho Strategic Resources popped more than 3% and NioCorp Developments rose nearly 10%.

The moves come after Trump on Monday outlined details for Project Vault, a first-of-its-kind strategic minerals reserve designed for the U.S. private sector.

The plan is set to pool $2 billion in private capital with a $10 billion loan from the U.S. Export-Import Bank, Trump said in the Oval Office.

“For years, American businesses have risked running out of critical minerals during market disruptions. Today, we’re launching what will be known as Project Vault, to ensure that American businesses and workers are never harmed by any shortage,” Trump said.

“We don’t want to ever go through what we went through a year ago — although it did work out,” he continued.

“Just as we have long had a strategic petroleum reserve and a stockpile of critical minerals for national defense, we’re now creating this reserve for American industry, so we don’t have any problems,” Trump said.

Rare earths have come to the fore as a key bargaining chip in the ongoing geopolitical rivalry between the U.S. and China, the world’s two largest economies.

To be sure, China is the undisputed leader of the critical minerals supply chain, responsible for nearly 60% of the world’s rare earths mining and more than 90% of magnet manufacturing.

A subset of critical minerals, rare earths refer to 17 elements on the periodic table that have an atomic structure that gives them special magnetic properties. These materials are vital components to a vast array of modern technologies, from everyday electronics, such as smartphones, to electric vehicles and military equipment.

From an industry perspective, it is critically important to see the U.S. taking “decisive steps” to shore up minerals and rare earths, said Wade Senti, president of Florida-based magnet maker Advanced Magnet Lab.

“But looking ahead, what is even more critical will be putting these minerals to use in permanent magnets that power the technologies of the future—from EVs to humanoid robots,” Senti told CNBC by email.

“Innovative permanent magnet technology can perform with a large variety of different critical minerals—not just neodymium—giving America more optionality and tools in supply chain security,” he added.

— CNBC’s Yun Li contributed to this report.