Al Root

China might be up to its old tricks, meaning more volatility for shares of rare-earths mining stocks.

Beijing is considering the implementation of a "validated end-user," or VEU, system for export licenses of its rare-earth elements, The Wall Street Journal reported Monday. Practically, the system would make it more difficult for defense contractors to obtain the metals that end up in everything from communications equipment to F-35 fighter jets.

It's the latest wrinkle in ongoing trade tensions between the U.S. and China. The latter, which dominates rare-earths markets with an estimated 85% of global refining capacity, threatened restrictions on rare-earths exports partly in response to President Donald Trump's tariffs on imported Chinese goods. Trump recently negotiated the elimination of export controls in trade talks.

Exports excluding defense applications, however, aren't optimal. The Pentagon needs rare-earth materials and has been working for years to secure non-Chinese supply. In July, the Defense Department signed a deal with MP Materials, the largest rare earth miner in the Western Hemisphere, that included an equity stake, price floor, and guaranteed customers for rare earth magnet capacity being built by MP.

The deal sent the share of MP and other U.S. rare earth miners soaring. Coming into Tuesday trading, MP stock was up 311% year to date. Shares, however, were down 18% over the past month as trade tensions with China eased.

More restrictions of any kind from China will likely mean more volatility for rare earth shares.

MP stock was up 0.4% in premarket trading at $64.46. The early move follows a massive 24% gain over the past two days. Third-quarter results, a Wall Street upgrade, and the end to recent selling pressure led to the jump.

Shares of aspiring rare-earths miners USA Rare Earth and Ramaco Resources were down 0.4% and up 0.2% in premarket trading, respectively. S&P 500 and Dow Jones Industrial Average futures were down 0.2% and up 0.1%, respectively.

Coming into Tuesday trading, USA Rare Earth stock was up 50% year to date. Ramaco shares were up 161%.

Looking ahead, investors will need to monitor developments in China. Rare-earths trading volatility might not be over yet.

Write to Al Root at allen.root@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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November 11, 2025 08:06 ET (13:06 GMT)

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