The global rare earths market is being reshaped by governments determined to establish secure ex-China supply chains for the critical minerals.

Western-aligned governments have moved to establish floor prices for the key magnet rare earths and provide financial support to foster new and expanded ex-China production.

That combination has turned up investor interest in the ASX rare earths sector, both for the sector leader Lynas (ASX:LYC) and a bunch of explorers/developers poised to capitalise on the new global order from the planned takedown of China’s dominance.

The growth in the market cap of Lynas from $7.6 billion to $18.9bn in just 12 months highlights how powerful the investment case for rare earths has become in the wake of government intervention and growing demand.

China still has the whip hand, controlling 70% of mined supplies, more than 90% of refining capacity and almost complete dominance of permanent magnet production. But ex-China alternatives are fast taking shape.

The US led the way, directly investing US$400 million in the country’s only producer, MP Materials, in July last year.

The investment came with the establishment of a floor price of US$110/kg for the light rare earths (neodymium-praseodymium oxide) required in high-performance magnets.

The floor price was double the ruling price at the time and has since washed through to other ex-China markets, including for Lynas’ sales to Japan. Australia is also supporting the ex-China build out through its $1.2 billion critical minerals strategic reserve.

Just last week Arafura Rare Earths (ASX:ARU) announced FID on its Nolans project in the NT, thanks to the support of a coalition of democratic governments in Europe, Canada, Korea and Australia.

China has weaponised its current control of the market in its tariff war with the US and has recently punished Japan for its support for an independent Taiwan by choking back supplies of key magnet metals.

The higher prices that have flown through means the task of securing financing and offtake arrangements for new projects like those being brought forward by ASX-listed rare earths stocks has got a whole lot easier.

Progress at Victory’s North Stanmore heavy rare earths project and the emergence of higher prices for non-China critical minerals has powered Victory Metals to a threefold increase in its market cap in 12 months.

The rise in market cap to ~$180 million comes as the company is close to another market re-rating event – the release of its highly anticipated pre-feasibility study into the development of North Stanmore, 7km north of Cue in Western Australia’s Murchison province.

Discovered by Victory on ground only previously explored for gold, North Stanmore now ranks as one of the world’s biggest regolith clay-hosted rare earths and strategic metals deposits with a distinguishing feature being a high count of high-value heavy rare earths and strategic defence metal Hafium.

Location of Victory Metals' North Stanmore project. Pic: supplied

While there are major light rare earths producers outside China in Lynas and MP Materials, heavy rare earths supplies are essential for military equipment and almost entirely at the command of the Chinese Government.

Because of their scarcity, heavies like dysprosium, terbium and yttrium carry much higher prices than NdPr, especially after specific Chinese export controls last year.

Ahead of the release of the PFS, Victory flagged that key metallurgical testwork had confirmed “substantial” opportunities to reduce both capital and operating expenditure at the project across flotation reagents, processing temperature and clay handling/filtration.

Victory said the testwork indicated a 50% saving on reagent costs by using a lower priced reagent which is also more effective.

It said plant design could also be simplified because the process route does not require heat, reducing both operation and capital expenditure.

Finally, the testwork found that unlike ionic clay-hosted projects, the clay matrix at North Stanmore demonstrated excellent flotation success with grade increase to 5.8% TREO along with successful filtration and dry-stacking properties, reducing capital expenditure for the tailings facility.

Victory chief executive and executive director Brendan Clark said the entire process flowsheet for North Stanmore had effectively been simplified and believes North Stanmore can become one of the lowest CAPEX heavy rare earth projects.

“These improvements further enhance the already compelling economics of our large
clay hosted heavy rare earth and strategic metals project,” Clark said.

The project currently hosts a JORC compliant resource of 321 million tonnes grading with the heavy rare earths/TREO ratio a revenue boosting average of 38%.

St George has moved its Araxá project in Brazil into development mode, positioning the project to take its position as a major source of rare earths in addition to another critical mineral, the steel-making additive niobium.

Progress at Araxá in the state of Minas Gerais has brought with it equity support from Gina Rinehart’s Hancock Prospecting – now a 6.2% shareholder – and institutional investors. Those factors have combined to carry St George to a market cap of more than $430 million.

Newsflow for the remainder of 2026 will be strong with a pending release of a scoping study into Araxá’s development and discussions underway with potential offtake and downstream processing partners.

Aerial Earth image of the Barreiro carbonatite complex showing the Araxa Project (red outline) as well as the adjacent CBMM niobium mine and the Mosaic phosphate mine. Pic: supplied

A key message from St George has been that the geopolitical space creates an opportunity for emerging producers outside of China to create value, noting that the two big non-China producers – Australia’s Lynas and America’s MP Materials – sport market caps of $18.9 billion and $US11.47bn (A$16bn) respectively.

St George executive chairman John Prineas said Araxá contained “standout quality rare earths.”

“The volume and the grade is already comparable to Lynas’ Mount Weld mine in Western Australia,” he said.

“So that alone tells you there must be some serious value at Araxá just on our rare earths mineralisation.

“Then we've got the niobium on top of that.”

The rare earths component of Araxá currently stands at a world-class 70.91Mt grading 4.06% total rare earth oxide.

“So we've certainly got a resource that can deliver a long life mine plan,” Prineas said.

“It’s got the grade, it's got a low cost start from surface, and it’s got the sort of good economic profile where you really can generate money out of it.”

As part of its move into a development mode at Araxá, St George recently appointed the Brazilian office of Perth-headquartered global engineering group Worley as the project’s feasibility technical adviser.

Malawi in south-east Africa is emerging as a major new source of rare earths to meet demand for non-Chinese supplies of the critical minerals.

ASX-listed companies are in the thick of things too, with the $1.3 billion Lindian Resources (ASX:LIN) due to start commissioning its Kangankunde rare earths project in the land-locked former British colony towards the end of the year.

Kangankunde is one of three recognised rare earths projects in Malawi with exploration histories dating back to the 1980s.

The other two are Songwe Hill, owned by Canada’s $C355 million Mkango Resources, and the Tundulu project, which was acquired in April by ASX-listed AuKing, a $38.5 million company.

Tundulu Project location. Pic: supplied

AuKing has hit the ground running at Tundulu and hopes to share in the success others are having in the rare earths space in southern Malawi region.

Managing director Paul Williams said the ex-China world “really wants to establish an alternative supply of rare earth minerals outside of China’s dominant position, with Africa expected to play an important role in that strategy.”

Tundulu is a known 5km diameter intrusive carbonatite complex which has been the subject of drilling in the 1980s by a Japanese government agency and in 2014-2015 by a South African joint venture.

Williams said the historical drilling – the South African drilling returned hits of rare earths while drilling for phosphate – gives AuKing a “really good steer in and around the main project area called Nathace Hill.”

“We’ve completed an airborne magnetics survey which identified Nathace Hill is part of a potentially much bigger system,” he added.

“Certainly from the perspective of drilling, we've got no shortage of targets to get stuck into.”

AuKing recently signed up for a 5500m maiden drilling program of 25 holes at Tundulu, with first assay results expected in coming months.

“We're expecting this drilling program will really put Tundulu on the map if we hit what we're expecting to,” Williams said.