Rare Earth Metals

The Next Industrial Revolution Is Elemental

Every major economic epoch has been defined by a material. Steel powered industrialization. Oil fueled globalization. Silicon enabled digitization.

Now, as we stand at the intersection of decarbonization, defense, and digital acceleration, rare earth metals are emerging as the strategic materials of the next industrial revolution; the essential inputs for everything from electric vehicles and wind turbines to robotics, advanced semiconductors, and national defense technologies.

This is not a niche story about mining, it’s a macro transformation in the architecture of the global economy, and one that investors can no longer afford to ignore.

Strategic Scarcity Meets Systemic Demand

The global economy is entering an age of resource realism. According to Canaccord Genuity’s latest research, China currently accounts for over 90% of global refining capacity for key rare earths such as neodymium (Nd), praseodymium (Pr), dysprosium (Dy), and terbium (Tb), and roughly 85% of global magnet manufacturing.

While recent pauses in Chinese export controls have calmed short-term volatility, the structural imbalance remains unresolved. Even under optimistic government-led initiatives in the U.S., Australia, and Japan, China is still projected to hold 75% of global refining capacity by 2028.

This supply concentration collides with a powerful demand curve. NdPr and DyTb oxide demand is forecast to grow 6–7% annually through 2035, fueled by electric vehicles, renewable power, automation, and defense technology.

This is the definition of a durable secular theme ‘strategic scarcity against systemic demand’.

Industrial Policy Becomes Investment Catalyst

The reshaping of global supply chains is being underwritten not by speculation, but by policy.

Recent developments include:

• The U.S.–Australia Critical Minerals Framework, committing $8.5 billion toward building ex-China supply chains.
• The U.S. Department of Defense’s stockpiling initiative, securing minerals critical to national security.‍
• Japan’s JOGMEC partnerships with U.S. and European refiners to expand Dy/Tb processing capacity.‍
• JPMorgan’s $1.5 trillion Security and Resiliency Initiative, blending project finance and equity investment into critical mineral ecosystems.

This is industrial strategy meeting capital markets. It represents a generational pivot where public and private capital converge to build new economic infrastructure for the electrified age.

Price Floors and the Birth of a “Security Premium”

As Western nations build independence from China’s supply dominance, a bifurcated pricing regime is emerging. Government-backed price floors and long-term offtake agreements are effectively creating a Western price premium a “security spread” for reliable, non-Chinese supply.

Canaccord now forecasts NdPr oxide prices reaching US$130/kg by 2030, with similar upward revisions for Dy/Tb oxides, reflecting both market deficits and policy support. Importantly, these are incentive prices designed to sustain Western projects, not speculative bubbles.

This structural repricing backed by sovereign intent introduces a new, quasi-public pricing foundation into what was once a purely market-driven commodity sector.

Portfolio Positioning Insight

At MLD Wealth, we view rare earths as a strategic portfolio tool a way to access the intersection of deglobalization, decarbonization, and defense.

Why it matters in portfolios today:

• Low correlation to traditional equities and bonds, offering diversification in late-cycle regimes.
• Inflation linkage, as high capital intensity and geopolitical scarcity create lasting pricing power.
• Policy tailwinds, which underpin valuations with structural demand and funding support.
• Thematic alignment, sitting at the crossroads of energy transition, automation, and national resilience.

‍From Commodity to Core Allocation

Rare earths have quietly moved from being a niche commodity to becoming the backbone of the next era of portfolio construction.
In a world increasingly defined by supply chain nationalism, resource competition, and the need for energy independence, these elements are no longer optional inputs, they’re foundational.

The transition to clean energy and intelligent machines cannot occur without them. And as we have seen time and again, investors who position early in structural bottlenecks often capture generational returns.

Final Thought

As geopolitical dust settles and valuations reset, the investment case for rare earths is no longer speculative, it’s strategic.

The convergence of technological necessity, industrial policy, and capital scarcity creates one of the most compelling risk-reward profiles in the real asset universe today.

In portfolio construction terms, rare earths represent the “hard asset expression” of the digital and clean energy revolutions.

They are the invisible yet indispensable building blocks of the future economy and an emerging core allocation for forward-looking investors.

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