The intensifying competition between the United States and China over critical minerals is drawing fresh attention from financial advisors who see the scramble for rare earths reshaping investment strategies heading into 2026.
deVere Group, a financial advisory firm, has positioned the rare earths sector as a major investment theme for next year, arguing that government interventions and supply chain restructuring will create sustained opportunities in mining, refining and recycling technologies. The materials are essential components in electric vehicles, smartphones and advanced weapons systems, making them strategically valuable beyond their commercial applications.
China currently dominates the sector, controlling roughly 70% of global mining and close to 90% of processing capacity. That concentration has left manufacturers worldwide vulnerable to Beijing’s policy decisions, a reality that’s become increasingly uncomfortable for Western governments as geopolitical tensions have risen.
The Trump administration has made rare earths a declared national priority, channelling funds into domestic and allied production while taking stakes in North American miners. Washington has proposed a government-backed price floor to stabilise supply and set out plans for a strategic mineral reserve, with permitting processes being fast-tracked under what officials have dubbed the “mine, baby, mine” policy.
China hasn’t been passive in response. Beijing recently imposed new export controls requiring companies to obtain approval before shipping magnets containing even trace amounts of Chinese-sourced rare earths. Five additional elements, holmium, erbium, thulium, europium and ytterbium, were added to the restricted list, tightening Beijing’s grip on global supply chains.
Nigel Green, chief executive of deVere Group, describes the situation as the start of a new industrial cycle. “The US wants to reclaim control of its supply chains and reduce its vulnerability to Beijing,” he said, characterizing it as the largest coordinated push for resource security in a generation.
The push is driving investment across Australia, North America and parts of Africa as companies and governments scramble to build alternative supply chains outside Chinese control. Whether these efforts can meaningfully reduce Western dependence on Chinese processing remains an open question, given the massive infrastructure and technical expertise required for rare earths refining.
deVere analysts expect continued volatility in the sector as government policies rather than traditional market fundamentals drive price movements. Every export restriction, strategic partnership or policy announcement could trigger market reactions, creating both risks and potential opportunities for investors willing to navigate the uncertainty.
The firm is advising clients to diversify across the supply chain rather than betting on individual mining companies, arguing that the transformation will play out over multiple years as refining capacity slowly comes online outside China. Recycling technologies are also being flagged as a potential growth area as companies look for ways to reduce dependence on newly mined materials.
The rare earths market represents a convergence of industrial policy, clean energy transitions and national security concerns, with governments increasingly willing to subsidise production and guarantee purchases to ensure domestic access. How effectively Western nations can build competitive alternatives to China’s entrenched advantages in processing technology and scale will likely determine whether the current investment wave delivers sustained returns or proves premature.
