If you want to understand where the smart money is heading, follow the government’s checkbook. And right now, Washington is writing a $12 billion check to anyone who can mine, process, or stockpile rare earth minerals on American soil.
President Trump’s “Project Vault,” announced on February 2, creates a U.S. critical mineral reserve — think Strategic Petroleum Reserve, but for the obscure elements that power everything from AI data centers to F-35 fighter jets. The program deploys $10 billion in Export-Import Bank financing plus $2 billion in private capital to purchase materials like neodymium, dysprosium, and lithium. When the federal government becomes your biggest customer, things get interesting fast.
The market reaction was immediate. Critical Metals Corp. (CRML) surged 35% on the announcement alone, and the broader rare earth sector has been on fire ever since. The thesis is straightforward: China controls roughly 70% of global rare earth mining and 90% of refining capacity. Beijing has already shown it will restrict exports during trade disputes. Every EV motor, every AI server rack, every missile guidance system depends on materials that come primarily from a single geopolitical rival. That’s a problem Washington is now throwing serious money at solving.
Several companies are positioned to capture this federal largesse. MP Materials (MP) operates America’s only functioning rare earth mine at Mountain Pass, California, and is expanding into refining — making it the most direct domestic play. Energy Fuels (UUUU) runs rare earth processing at its White Mesa Mill in Utah, one of the few U.S. facilities capable of producing separated oxides. USA Rare Earth (USAR) is developing the Round Top project in Texas, with a focus on heavy rare earths used in military applications. Critical Metals Corp. (CRML) controls the massive Tanbreez deposit in Greenland, strategically positioned as the U.S. seeks allied supply sources. And American Rare Earths (ARRN) is advancing Halleck Creek in Wyoming as defense procurement rules increasingly exclude Chinese materials.
What makes this different from previous mining hype cycles is the demand certainty. Federal backing doesn’t just provide revenue visibility — it de-risks financing for projects that typically take years and hundreds of millions to develop. Industry analysts estimate three to seven years before meaningful domestic capacity comes online, which means early movers have a long runway before competition catches up.
The opportunity extends beyond the miners themselves. Building domestic rare earth capacity requires an entire industrial ecosystem — chemical suppliers like Olin (OLN), heavy equipment makers like Caterpillar (CAT), and engineering firms like Fluor (FLR) that design and construct processing facilities. This isn’t a single-stock story. It’s a sector-wide repricing driven by a fundamental shift in U.S. industrial policy.
The catch? These are mining stocks, and mining stocks are volatile by nature. Permitting delays, environmental reviews, and the sheer difficulty of building refining capacity from scratch all present real risks. But with a $12 billion federal commitment backing the sector and geopolitical tensions only intensifying, rare earths may be the most interesting corner of the market that most retail investors still aren’t watching.