INVESTMENT THESIS 2026

The Critical Minerals Imperative

China controls 90% of rare earth processing. The West is spending $25B+ to break free. A generational supply chain reshoring across rare earths, lithium, copper, and cobalt.

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China REE Processing
$0
Allied Investment
0
Critical Minerals Listed
0
Copper Deficit (MT)
0
China Magnet Share
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REEs Under Export Ban
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The Strategic Minerals Landscape

A $350B+ market across rare earths, lithium, copper, and cobalt — with demand set to double by 2030, driven by EVs, defense, and the energy transition.

Market Size by Mineral (2025)

China's Supply Chain Control

Demand Growth Projections

Mineral 2025 Demand 2030 Projection CAGR Supply Risk
Rare Earth Oxides~200K MT~400K MT8-13%High
NdPr (Magnets)~55K MT~90K+ MT10-12%High
Dysprosium~2.5K MT~4K+ MT10%+Critical
Lithium (LCE)~1.0M MT~2.0M+ MT~18%High
Copper28M MT~33M MT~7%Critical
Gallium~700 MT~1K+ MT~8%Critical

The Resource Base

Mining is the most geographically diversified stage. MP Materials, Lynas, Freeport, and Albemarle lead the Western charge.

Rare Earth Producers (NdPr Capacity)

Copper Producers (FY2025 Output)

Lithium Market Recovery

$80K
Li2CO3/t peak (2022)
<$10K
Lithium Winter low (2024)
$18.5K
Stabilized (early 2026)
Lithium Market
$44B
2030 Target
$75B
Growth
~18% CAGR
Demand 2026
>1.7M MT LCE

Copper Structural Deficit

The Strategic Chokepoint

Processing is where geopolitical leverage concentrates. China built its dominance over three decades. The West needs $15-25B and a decade to close the gap.

The Western Processing Gap

-75%
Light REE (NdPr) gap
15K MT capacity vs 60K demand
-100%
Heavy REE (Dy/Tb) gap
0 MT at scale vs 4K demand
-90%
NdFeB Magnet gap
2.5K MT vs 25K demand

Western Processing Facilities

Government Investment

DOD / MP Materials
Equity + procurement + OSC loan
$550M
CHIPS Act / USA Rare Earth
Debt-and-equity package
$1.6B
NDS Expansion
One Big Beautiful Act (FY2025)
$2.0B
Industrial Base Fund
Supply chain support
$5.0B
DOE Loan / Lithium Americas
Thacker Pass lithium mine
$1.97B

The Non-Negotiable Consumer

Every F-35 requires 920 lbs of rare earths. Every Virginia-class sub needs 9,200 lbs. The military cannot substitute — it must secure supply.

Rare Earth Content by Platform

Demand by End-Use (2025)

Key Demand Metrics

EV NdPr Demand (2030)
~21K MT
~50% of global NdPr output
Haliade-X Turbine
4-6 MT
NdFeB magnets per unit
Military Magnets
3-4K t/yr
DOD annual consumption
AI DC Copper (2040)
2.5M MT
Up from 1.1M MT (2025)
NdFeB in EVs
96%
of RE magnet demand
Cobalt Price Surge
+162%
DRC export ban impact

The Catalyst and the Risk

Beijing has systematically weaponized mineral dominance since July 2023. The November 2026 trade deal expiry is the single most important near-term catalyst.

Export Control Escalation Timeline

Date Action Impact Severity
Jul 2023Gallium/Germanium controlsExports → zero; +150% priceCritical
Aug 2024Antimony controls+200% price; shipments -97%Critical
Apr 20257 heavy REEs + magnetsAuto production cutsHigh
Oct 2025Extraterritorial controlsMost extensive to dateHigh
Nov 2025Temporary suspensionUntil Nov 2026; architecture intactPause

Scenario Probabilities (Nov 2026)

45%
Managed Tension
Agreement extended with modifications. Some controls remain.
35%
Continued Escalation
All controls reimposed. Massively bullish for Western miners.
20%
Detente
Permanent relaxation. Western mining equities correct near-term.

IRA FEOC Mineral Thresholds

The Investable Universe

From vertically-integrated mine-to-magnet leaders to early-stage development plays. Filter by conviction tier to explore.

All
Tier 1
Tier 2
Tier 3
Private

Catalyst Calendar

From near-term production milestones to the pivotal November 2026 trade agreement expiry and long-term secular trends.

What Could Go Wrong

Ten risks spanning commodity volatility, execution delays, geopolitical uncertainty, and valuation compression.

Recommended Watchlist

Focus on vertically-integrated Western producers with government backing. The November 2026 U.S.-China trade deal expiry is the single most important catalyst. Position for structural supply chain reshoring across rare earths, lithium, and copper.

Research compiled February 2026. Not investment advice. See sources below.

Sources & References

Mining & Extraction

  • MP Materials Q3 2025 Results (investors.mpmaterials.com)
  • Lynas Rare Earths Full Year 2025 Results (weblink.com.au)
  • Energy Fuels Heavy REE Oxide Production (investors.energyfuels.com)
  • Albemarle 2026 Rebound Analysis (markets.financialcontent.com)
  • Rio Tinto Arcadium Lithium Acquisition (riotinto.com)
  • SQM Q3 2025 Record Lithium Sales (investing.com)
  • Pilbara Minerals Record FY2025 Production (investingnews.com)
  • Freeport-McMoRan Q4 2025 Results (q4cdn.com)
  • Southern Copper Tia Maria Progress (simplywall.st)
  • ICSG Copper Surplus/Deficit Projections (miningweekly.com)
  • DRC Cobalt Export Quotas (spglobal.com)

Processing & Refining

  • IEA Global Critical Minerals Outlook 2025 (iea.org)
  • CSIS Developing Rare Earth Processing Hubs (csis.org)
  • MP Materials DOD Partnership (investors.mpmaterials.com)
  • USA Rare Earth CHIPS Funding (okenergytoday.com)
  • Neo Performance Estonia Magnet Plant (neomaterials.com)
  • Ucore RapidSX Technology (ucore.com)
  • Cyclic Materials South Carolina Campus (businesswire.com)
  • Redwood Materials Overview (redwoodmaterials.com)

Defense & Industrial Demand

  • U.S. Army Elemental Issue (army.mil)
  • CRS Rare Earth Elements in National Defense (fas.org)
  • Pentagon $1B Critical Minerals Stockpile (mining-technology.com)
  • IDTechEx Rare Earth Magnet Market (idtechex.com)
  • S&P Global Copper in the Age of AI (spglobal.com)
  • 2026 Critical Minerals Ministerial (state.gov)

China & Geopolitics

  • CSIS China Gallium Supply Chain Threat (csis.org)
  • CSIS Antimony Export Restrictions Impact (csis.org)
  • China Pauses Rare Earth Export Curbs (fdd.org)
  • White House U.S.-China Trade Deal (whitehouse.gov)
  • IRA Section 30D / FEOC Rules (federalregister.gov)
  • Goldman Sachs Geopolitics of Critical Minerals (goldmansachs.com)
  • Atlantic Council Critical Minerals Stress Testing (atlanticcouncil.org)