In a surprising development impacting the rare earth and critical minerals market, reports surfaced on Wednesday evening indicating a change in the U.S. administration's stance on federal price supports for domestic mining projects considered critical to national interests. This has ignited substantial volatility across stocks of companies engaged in the extraction and processing of these minerals, with many trading sharply lower during Thursday's session.
The initial report conveyed that senior officials from the federal government had communicated to industry leaders during a confidential session that future critical mineral projects will be expected to demonstrate financial self-sufficiency without relying on government-imposed price floors. This represents a marked departure from the prior administration rhetoric reminiscent of the aggressive support mechanisms akin to Operation Warp Speed, which had bolstered confidence in the domestic supply chain against foreign dominance, particularly from China.
Following the dissemination of this news, stocks across the sector exhibited steep declines. MP Materials Corp. (NYSE:MP), a prominent player in rare earth mining, saw its shares tumble by more than 11%. Similarly, Critical Metals Corp (NASDAQ:CRML) experienced a near 16% drop in its stock price.
Other notable moves included USA Rare Earth (NASDAQ:USAR), which declined over 14%, and Lithium Americas Corp. (NYSE:LAC), down by approximately 11.6%. Trilogy Metals Inc. (NYSE:TMQ) faced a 12% decrease, Energy Fuels, Inc. (AMEX:UUUU) shares fell by 15%, TMC the metals company Inc. (NASDAQ:TMC) slipped 12.5%, and United States Antimony Corp. (AMEX:UAMY) declined more than 16%.
However, the reported policy shift met immediate contestation from key companies cited. MP Materials issued a statement on its social media channels, dismissing the report as inaccurate, affirming that its existing government contract—which establishes a $110 per kilogram price floor for light rare earth elements—remains valid and legally binding with no alterations.
United States Antimony Corp. also responded critically to the report, labeling it "inaccurate, misleading, and inconsistent with the facts." Industry observers further remarked on a notable revision made to the original news piece post-publication, where the initial implication that existing contracts were being rescinded was clarified to specify that the change pertains only to future initiatives and new applicants seeking federal support.
The discourse extended beyond official statements as social media interactions intensified. MP Materials targeted Critical Metals on these platforms, criticizing the speculative dimensions of the latter’s operations, while defending its own firm standing based on confirmed government support. This exchange underscored underlying tensions present in a market sensitive to shifting policy signals.
From a broader perspective, this turbulence comes after a period of significant growth in rare earth stocks fueled largely by concerted government efforts to reshore critical materials supply chains and reduce reliance on foreign sources. While the market reacted sharply to the news report, investors are advised to approach the recent selloffs cautiously, as definitive policy guidance remains pending. Clarifications from government channels will be essential to accurately assess the prospective environment for rare earth mining and processing domestically.