Rare earth material stocks rose on Friday as Beijing tightened its exports of the critical minerals.
China’s Ministry of Commerce on Thursday announced new regulations that will impose further restrictions, including a requirement that foreign companies get special approval to export products that contain even a small level of rare earth elements that have been sourced from its country.
This requirement even extends to items that were made in other countries, as long as it contains a trace of the rare earth material from China.
Permitting requirements are also being imposed by Beijing on all exports of technologies that are related to rare earth mining, magnet-making, smelting, or recycling.
Rare earths are the key building block of modern tech, powering everything from electric vehicles and semiconductors to robotics and missile guidance systems.
However, the Ministry of Commerce indicated that any request by a foreign country to use rare earths for military purposes would likely be rejected.
China is responsible for 90% of global rare earth processing and about 70% of the mining.
The move by Beijing sent US rare earth stocks surging in midday trading on Friday.
Critical Metals soared 19.4%, United States Antimony Corporation (UAMY) was up 16.9%, USA Rare Earth, Inc. (USAR) gained 16.7% and MP Materials Corp. (MP) rose 14.6%.
Roth Capital analysts on Friday raised its price target for USA Rare Earth to $40 from $20, while reiterating its Buy rating. The analysts highlighted the company’s effort to expand its domestic mining operations.
USA Rare Earth’s stock has risen 184.1% for the year.
The Trump administration has been making an aggressive push to ramp up domestic rare earth mining, with the Pentagon making a $400 million investment in MP Materials, which makes it the company’s largest shareholder.
The White House has indicated that this investment is “not a one-off,” with additional government-backed deals reportedly in negotiation.
President Trump on Friday blasted China’s new restrictions in a post on Truth Social, saying that Beijing was “becoming very hostile” with countries across the globe. He noted that America’s relationship with China over the past six months “has been a very good one,” which made its new trade restrictions “even more surprising.”
Trump accused China of holding the world “captive” and by amassing a stockpile of the critical minerals, the country has created “somewhat of a Monopoly position, a rather sinister and hostile move, to say the least.”
Among the countermeasures he may take, Trump threatened “a massive increase of Tariffs on Chinese products coming into the United States of America.”
Trump and Chinese President Xi Jinping are scheduled to meet in three weeks, although Trump has suggested he might cancel it after this latest development.
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