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By Alpha Research
Jun 18, 2025
It is good to be back after a short break — refreshed, recharged, and perhaps more grateful for the calm moments.
Because while I took time to pause, the world did not.
It surged ahead with a mix of tragedy, turbulence, and tectonic shifts — reminding us, yet again, of how interconnected everything is.
One of the darkest moments during my time away was the devastating plane crash in Ahmedabad.
Meanwhile, in the geopolitical sphere, tensions between Iran and Israel boiled over into active hostilities, rattling global markets.
The escalation triggered crude oil prices to surge by more than 10% on Friday, reviving fears of prolonged supply disruptions and inflationary pressures worldwide.
The Russia–Ukraine conflict, often edged out of headlines, made its presence felt again.
Russia launched an overnight strike on the Kremenchuk oil refinery in Ukraine's Poltava region — a key supplier of fuel to Ukrainian forces.
The most recent Bell 407 chopper crashed shortly after takeoff from Kedarnath temple on June 15.
These back-to-back tragedies have shaken public confidence and triggered a sense of vulnerability in systems, economies, and people.
If there is a lesson, it is this: take nothing for granted. Be it peace, health, or stability — the world remains a fragile place.
As investors seek refuge in turbulent markets and strive to align portfolios with long-term trends, two commodities stand out: Gold — the timeless store of value — and Rare Earth Elements (REEs) — the rising stars powering the green and digital revolution.
Gold's reputation as a haven is hard-earned.
Central banks remain voracious buyers, adding over 2,000 tonnes in just two years, bolstering global reserves and underpinning gold's monetary role.
Production is steady but limited, and when uncertainty strikes, be it inflation, geopolitical tension, or market turmoil, gold's price typically rallies, offering a proven hedge against systemic risk.
However, a quieter yet potentially transformative investment opportunity has been gaining traction beneath the noise: Rare Earth Elements (REEs).
Once confined to scientific circles and obscure mining reports, these 17 elements are now front and centre of industrial policy, clean energy agendas, and national security playbooks.
Rare earths are 17 metallic elements, including Neodymium (Nd), Praseodymium (Pr), Dysprosium (Dy), and Terbium (Tb), prized for their unique magnetic, luminescent, and electrochemical properties.
These 17 elements may not grab headlines like gold or oil, but they are powering the technologies of tomorrow — from electric vehicles and renewable energy to defense systems and smartphones
Key industrial applications:
So, what makes rare earths more than just another buzzword?
Why are investors, policymakers, and defence strategists scrambling to secure access?
How can you — as an informed investor — position yourself to benefit from this seismic shift?
These are not truly rare in abundance but are challenging to extract, separate, and refine, making them economically and environmentally intensive.
Rare earths have been directly linked to defence applications (missiles, stealth systems, satellites), AI, 5G, and semiconductors.
Global geopolitical tensions push governments to treat REEs as strategic assets, not just commodities.
The impact can be seen as:
Notably, this sector has become one of the most geopolitically charged corners of the global commodities market.
Several recent international events have added momentum — and complexity — to how nations approach this strategic resource.
China dominates with ~60% of global rare earth mining and 80% of global refining and magnet-making capacity.
Recent actions of export curbs on key REEs (e.g., neodymium, dysprosium) and delays in export licenses for finished magnets indicate a new regulatory regime to tighten control over rare earths.
In a recent call in May 2025, both leaders - Trump–and Xi discussed rare earth access and trade tariffs.
While the tone was cooperative, China's curbs remain in place — reinforcing rare earths as a bargaining chip in broader trade negotiations.
India, home to the 5th-largest rare earth reserves, recently halted exports to Japan under a 13-year-old bilateral agreement.
The government directed IREL (state-run miner) to conserve supply for local value chains — particularly magnet production for EVs, pharma, and defence.
India is also planning incentives for private investment in rare earth processing and magnet manufacturing.
Countries like the U.S., Australia, and Japan are reshoring or diversifying supply sources:
Reflecting this rising demand, Grand View Research estimates the global rare earths market was valued at $3.95 billion in 2024.
That figure is set to rise, with a projected compound annual growth rate (CAGR) of 8.6% through 2030.
Why do Rare Earths matter now more than ever?
As countries double down on net-zero targets, the demand for EVs, renewable energy, and energy storage surges.
The global shift to clean energy and electrification drives exponential demand for REEs.
EV sales grew from 3.2 million in 2020 to 14 million in 2023, and each EV can require up to 1 kg of rare earth magnets.
With global EV sales set to reach 30 million units annually by 2030 and wind capacity expected to triple, demand for REEs like NdPr (Neodymium–Praseodymium) is projected to increase 3–5x this decade.
The wind energy sector is expected to grow 11% CAGR through 2030, with rare earth-intensive turbines at its core.
Unlike oil or gold, REEs are hard to substitute in most high-performance applications.
They have a concentrated and fragile supply chain (China controls ~80% of global refining).
They are considered strategic materials by the U.S., India, and EU — with direct implications for defence and energy policy.
This unique mix of economic and geopolitical value gives rare earths a scarcity premium — a key driver of long-term price appreciation and investor interest. Rare earths resemble what lithium was a decade ago:
As governments and corporations scramble to diversify supply and secure access, capital flows into mining, refining, recycling, and tech innovation.
Investors who enter early and manage risks can benefit from re-rating as these companies mature and scale.
How can you, as investors, participate?
As you look forward, the smartest approach is not an either-or choice; it is a blend.
Combining both in your portfolio can capture gold's defensive shine and rare-earths' growth potential in one cohesive strategy.
Gold preserves wealth through what has been — tried, tested, and trusted during uncertainty.
Rare earths create wealth through what is coming — a digitized, decarbonized, defence-conscious future.
Quick Comparison of Gold vs Rare Earths
Both have a role.
Unlike gold, which reflects fear, rare earths represent the future.
They are not just metals but enablers of a new industrial age.
Rare earths offer rare potential for investors ready to ride the waves of global transition.
While India is strategically rich in rare earth deposits, the investment ecosystem around REEs is still in its early stages.
Opportunities are gradually emerging across domestic policy developments, international instruments, and thematic plays.
Many global rare earth companies are listed on international exchanges, such as MP Materials (NYSE: MP), Lynas Rare Earths (ASX: LYC), Iluka Resources (ASX: ILU).
Indian investors can access these via LRS (Liberalised Remittance Scheme), international brokerage accounts, or foreign equity access platforms.
Global ETFs provide diversified exposure to a basket of rare earth and strategic metal companies - VanEck Rare Earth/Strategic Metals (REMX), Global X Battery Tech (LIT)- Ideal for investors who want diversification and liquidity without picking individual stocks.
Investors can also consider mining stocks or companies focusing on rare earth recycling like Geomega Resources, American Resources Corp.
Currently, there are no listed Indian pure-play rare earth companies.
However, investors should track policy shifts, budget allocations, and mining block auctions — especially in Odisha, Andhra Pradesh, and Tamil Nadu.
Key Developments to Watch in the Indian context.
IREL's plans to double neodymium production by 2030 and enter the magnet manufacturing value chain.
IREL may eventually list on Indian stock exchanges, providing direct equity exposure.
While not pure plays, some Indian companies may offer indirect exposure to rare earth-linked value chains, especially those in:
With the auction of Rare Earth Blocks (2023–2025), private players may gain mining rights under the new mineral auction policies.
The Indian rare earth sector is gaining momentum with new government regulations to reduce import dependence and build a self-reliant ecosystem.
The National Critical Mineral Mission (NCMM), launched in early 2025, supports domestic exploration by offering incentives like 50% cost reimbursement if no minerals are found and promotes recovery from sources like e-waste.
Though still in the early stages, India's rare earth landscape is set for growth.
The government recently auctioned 13 exploration blocks, opening the space to private players.
Mining majors like Coal India, NMDC, and MOIL are well-positioned to benefit from these reforms.
One can also explore private rare earth exploration startups, technology innovators in rare earth recycling, and India-based EV and magnet startups partnering with state-backed miners.
However, it is important to note that these are high-risk, high-reward plays and may require due diligence, longer investment horizons, and access to private placement or venture capital networks.
My dear readers, while traditional asset classes like equities, real estate, or gold dominate portfolios, rare earths are carving out a compelling space.
However, rare earths offer rare potential for investors with a long-term horizon, tolerance for moderate volatility, and a desire to align with global transformation.
Allocating 2–5% to rare earths through select stocks, ETFs, or private investments provides a multi-decade portfolio growth lever.
Just as oil shaped 20th-century geopolitics and investment portfolios, rare earths may shape the 21st.
They are the "oil of the green economy" — invisible to the eye but critical to the world's functioning.
However, they remain under-owned, underpriced, and underappreciated in most investor portfolios.
Rare earths are becoming an essential thematic bet for investors looking to position portfolios for the green transition and strategic resource security.
For investors with foresight, the opportunity is rare — but real.
Best Regards
Alpha Research
Disclaimer: The perspectives provided reflect our expectations of the economy, market, and investments, which may or may not materialize. Investors are encouraged to conduct their own due diligence before investing.
