The demand for rare-earth metals is estimated to rise as consumers and government around the world become increasingly concerned about climate change. In fact, the International Energy Agency expects the demand for REEs to increase by up to seven times by 2040.
ASX-listed rare-earth stocks are well positioned to benefit from this increased demand as Australia is home to many globally renowned rare-earth companies. Additionally, the fact that many countries, including the U.S., are keen to secure rare earths from sources outside of China also bodes well for ASX rare-earth stocks.
Our analysis suggests Lynas Rare Earths could prove a smart investment option for investors looking to cash in on the growing demand for rare-earth metals. There are, however, other ASX rare-earth stocks as well that could provide patient investors with significant return.
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Best Australian rare-earth companies to invest in now
We have used several factors to develop our list of the best ASX-listed rare-earth stocks. Here is a quick overview of our top picks.
- Lynas Rare Earths: One of the largest rare earth miners, Lynas is regarded as the only significant rare earth materials producer in the world outside of China. The company has high-grade projects and is focused heavily on expanding its production.
- Northern Minerals: With the potential to become the first major producer of dysprosium outside of China, Northern Minerals is on track to make its Browns Range dysprosium-terbium project in Western Australia production-ready.
- Iluka Resources: With four assets spread across Australia in Western Australia, South Australia, and New South Wales, the company is focused on building the first integrated refinery for processing rare earths in Australia. Its rare-earths are co-products of its mineral sands products, and thus have a significantly lower mining footprint than many other producers.
- Arafura Rare Earths: The company is focused on the Nolans Project for mining and processing rare-earth elements. Once developed, the Nolans Project has the potential to make Arafura a major supplier of critical elements.
- Lindian Resources: Together with its subsidiaries, the company engages in the exploration of mineral properties, including gold, bauxite, and rare earths mineral ores. The company’s flagship asset is one of the best globally in terms of size, grade and quality.
- Hastings Technology: An Australia-based rare earths company with a focus on developing its 100% owned Yangibana Rare Earths Project, which is located in the world’s most highly valued deposits of two critical REEs – neodymium and praseodymium (NdPr).
- American Rare Earths: With three projects in the U.S., the company is expected to gain immensely from recent U.S. policy changes aimed at boosting local production. American Rare Earths’ flagship project, Halleck Creek project, is expected to have massive potential rare-earth deposits.
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An in-depth look at these top Australian rare-earth stocks
Now that you know the best ASX rare-earth stocks, let’s dive into the details of each to find out what makes them the best and investable.
1. Lynas Rare Earths (LYC): Average annualized return of 8%
Lynas (ASX:LYC) is referred to as the only significant producer of rare-earth materials outside of China. The Australian company accounted for 20% of the world’s supply at the close of FY 2021.
What makes Lynas special is that it mines rare-earth materials and refines them at its existing processing facilities. To further increase its production, the company is developing a new facility in Texas, U.S., and expanding operations at Mt. Weld.
Lynas’ Mt Weld mine in Western Australia is regarded as one of the biggest deposits of rare-earth metals and its Malaysian processing plant is the largest in the sector. In June, the company revealed that it is on track to commence production of two rare earth products at its Malaysia facility next year.
Lynas’ shares are up over 20% in six months despite the company reporting a drop in production and revenue for Q3 FY24. It seems investors have shown confidence in the stock as, according to management, it intentionally put inventory selling on hold due to the low-price environment.
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2. Northern Minerals (NTU): Average annualized return of -14%
Northern Minerals (ASX:NTU), with over 2750km2 of licensed land across Western Australia and Northern Territory, has the potential to become the first major producer of dysprosium outside of China. Browns Range in the north of Western Australia and Boulder Ridge in the Tanami region of the Northern Territory are Northern Minerals’ main projects.
Northern Minerals is focused on developing its Browns Range Project, which has high levels of rare earth elements dysprosium and terbium, in three stages. The company is on track to conclude a definitive feasibility study in Q4 2024 and come up with a final investment decision in the next quarter.
Northern Minerals is expecting to start its first production in Q4 2027. The company also has a strategic partnership with another Australian rare-earth company, Iluka Resources, for assistance in funding and processing of REEs.
Northern Minerals is presently experiencing losses, but analysts expect it to post a profit next year as it makes progress with its projects. Shares of the company are also down over 30% YTD, but its importance is evident from Australia’s Foreign Investment Review Board decision earlier this year to deny a Chinese fund to raise its ownership in Northern Minerals, on national interest grounds.
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3. Iluka Resources (ILU): Average annualized return of 5%
Iluka Resources (ASX:ILU) is primarily a mineral sands producer, and one of its by-products is a mineral containing rare earths, called monazite. The company has decades of mining experience and has been stockpiling monazite since 1990 with a plan to use it at its Eneabba rare earth refinery in Western Australia.
Currently, the company is working on a feasibility study for a fully integrated rare earth refinery at Eneabba, while the first production at the refinery is expected to start in 2025. Iluka Resources has also secured a $1.25 billion loan from the Australian government to develop the facility.
Iluka’s Eneabba facility will be Australia’s first fully integrated rare earth refinery. One advantage that the company holds over other rare-earth producers is it has a significantly lower mining footprint as its rare earths are co-products of its mineral sands products, and this could drive up the demand of its REEs.
Additionally, the company has other projects, including the Balranald deposit in South Australia, the Wimmera deposit in New South Wales and the Jacinth-Ambrosia operation in South Australia (the largest zircon mine in the world).
Iluka Resources shares are down over 6% YTD, but have gained momentum lately, suggesting investors’ confidence in the company’s Eneabba facility.
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4. Arafura Rare Earths (ARU): Average annualized return of 14%
Arafura Rare Earths (ASX:ARU) is the only owner of the rare earths Nolans Project, which is also the company’s flagship asset. The Nolans Project is a globally significant and strategic neodymium and praseodymium project
Arafura plans to mine and process the ore into rare earth oxide at the Nolans Project. The company already has agreements to supply rare earth oxides to Hyundai and Kia, while it is negotiating with GE Renewable Energy for a sustainable supply chain.
The construction of the Nolans Project started this year and is expected to take two years to complete. Once completed, Arafura will become a key supplier of critical minerals to the high-performance neodymium permanent magnet market. The company estimates the Nolans project to supply about 4% of global NdPr oxide demand.
Additionally, the company’s Aileron-Reynolds (also in the Northern Territory) project is in exploration status. The company’s shares are down almost 6% YTD, but are up over 150% over the past five years.
Though the company isn’t profitable, we don’t see any strong correlation between its profit and share price, suggesting investors are factoring in the potential success of Arafura’s projects.
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5. Lindian Resources (LIN): Average annualized return of -11%
Lindian Resources (ASX:LIN) deals in the exploration of mineral properties in Australia, Tanzania, Guinea, and Malawi. Kangankunde Rare Earths Project in Malawi is the company’s flagship asset, and it is considered as one of the significant rare earth resources in terms of size, grade, and quality.
Lindian Resources recently completed studies at the Kangankunde Project and is currently analyzing the results to come up with the final plan. In July this year, the company announced the results of the initial deep diamond drill hole, referring to the findings as ‘astonishing’ and ‘stunning.’ The company expects to start production by 2027.
Additionally, the company has many other projects, including the Gaoual Bauxite project, the Woula Bauxite project, the Lelouma Bauxite project located in Guinea, and the Lushoto and Pare Bauxite projects located in Tanzania.
Lindian Resources shares are down over 30% YTD, but over the past five years, the shares are up almost 400%. Though the company has posted a net loss for the latest financial year, analysts expect the company to break even next year and post a profit in 2026.
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6. Hastings Technology (HAS): Average annualized return of -31%
Hastings Technology (ASX:HAS) deals in the exploration and development of rare earth deposits, mainly neodymium and praseodymium, in Australia. The company has the Yangibana Rare Earths Project in the Gascoyne region of Western Australia.
Hastings Technology plans to develop the Yangibana Project in multiple stages, with construction starting this year and the first sale in 2025. The company refers to the project as a world-class rare earth project with the potential to become a globally significant producer of NdPr, a critical component in making permanent magnets.
Additionally, the company has the Brockman Project in Onslow for rare earths and other metals. The company also has plans to develop a processing plant in Onslow to produce a mixed rare earth carbonate.
Hastings Technology posted a loss for the latest financial year, but analysts expect the company to break even next year and post a profit in 2026. Its shares are down over 50% this year, but are up almost 10% in one month, suggesting investors have faith in the company’s latest project plans.
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7. American Rare Earths (ARR): Average annualized return of 6%
American Rare Earths (ASX:ARR) deals in the exploration and development of mineral resources, such as rare earth, scandium, and cobalt deposits, in Australia and the United States. Presently, the company owns three early-stage rare earth assets in the U.S., including the 100% owned Halleck Creek Project in Wyoming. The project is estimated to have 1.43 billion tonnes of rare earth, and the company is carrying out further studies to get detailed information about the site.
Additionally, the State of Wyoming has approved the mining company’s application for a grant of AU$10.7 million (or US$7.1 million) as part of a Matching Funds arrangement. The Halleck Creek Project is also important because of its significant Zircon co-product potential alongside REEs. Zircon’s supply is currently limited, but its demand is high among growth industries, such as nuclear energy.
American Rare Earths’ La Paz Project in Arizona is also a potential rare earths site, and many believe it to be the largest deposit in the country. It also has a Searchlight Project in Nevada, which is very close to the exiting Mountain Pass Rare Earths Mine.
Since American Rare Earths has projects in the U.S., it is expected to benefit immensely from the recent U.S. tariff policy changes, targeting imports. Investors have clearly realized the potential upside potential of the mining company as it stock is up over 80% YTD.
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Year-to-date performance of the best Australian rare-earth stocks
| Ticker | Company | Performance (YTD) | Invest |
| LYC | Lynas Rare Earth | 7% | Buy with eToro |
| NTU | Northern Minerals | -30% | Buy with eToro |
| ILU | Iluka Resources | -6% | Buy with eToro |
| ARU | Arafura Rare Earths | -6% | Buy with eToro |
| LIN | Lindian Resources | -30% | Buy with eToro |
| HAS | Hastings Technology | -50% | Buy with eToro |
| ARR | American Rare Earths | 80% | Buy with eToro |
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What are Australian rare-earth stocks?
Australian rare-earth stocks are listed on the Australian Securities Exchange (ASX) and are owned by companies involved in rare earth elements’ exploration, mining, production, refining, or distribution.
Rare earth elements are a set of heavy metals that have several useful applications in the modern world, including in high-tech consumer and industrial devices and many other applications in the defense industry.
Though these elements are called rare earths, they are actually not so rare. They have earned the name because of their diffuse presence in the earth’s crust, which leads to mining challenges.
Being a resource-rich economy, Australia is home to many rare-earth stocks, providing investors with plenty of opportunities to gain exposure to rare-earth metals.
Why invest in ASX-listed rare-earth stocks?
Rare earth elements are rarer than other minerals and metals and their production is also concentrated in a few countries, resulting in limited supply. On the other hand, the demand for REEs is estimated to grow significantly as more economies become increasingly technology-driven and green-focused.
Limited supply and growing demand provide the perfect opportunity for investors looking to gain exposure to rare-earth stocks to make significant returns. Such investors can invest in quality ASX-listed rare-earth stocks, which are well poised to benefit from the rising prices of REEs.
ASX rare-earth stocks are good for both risk-averse and high-risk investors. The volatility in rare earth mining stocks will appeal to high-risk tolerant investors, while risk-averse investors need patience and a long-term outlook to gain from REEs.
What are the biggest rare-earth companies in Australia?
The following are the biggest rare-earth companies in Australia:
| Name | Market Cap | Revenue |
| Lynas Rare Earth | AU$7.197 Billion | AU$463 Million |
| Northern Minerals | AU$136.05 Million | AU$4.47 Million |
| Iluka Resources | AU$2.66 Billion | AU$1.22 Billion |
| Arafura Rare Earths | AU$394.29 Million | AU$920 Million |
| Lindian Resources | AU$112.99 Million | AU$421,051 |
| Hastings Technology | AU$53.34 Million | AU$7.17 Million |
| American Rare Earths | AU$143.38 Million | AU$46.21K |
Pros and cons of investing in Australian rare-earth stocks
Rare-earth stocks are a good investment option for day traders and patient investors, but they are not without risks. It is crucial for investors to properly understand those risks before investing in ASX rare earth stocks.
Some of the pros of buying Australian rare-earth stocks
- Diversification: This is the biggest benefit of investing in rare-earth stocks. Australian rare-earth stocks are not closely linked to traditional industries, such as manufacturing and energy, and thus, they offer significant diversification benefits.
- Growing demand: The demand for REEs has gone up significantly and is expected to grow manifold in the foreseeable future as more countries push for greener tech. Growing demand for REEs bodes well for ASX rare-earth stocks, creating potential investment opportunities for investors.
- Innovation: Tech plays a crucial role in the rare-earth sector, with rare-earth companies constantly developing new technologies to refine processes. This new tech drives the revenue of rare-earth stocks.
- High returns: The growing demand for REEs could mean a high return for investors in ASX rare-earth stocks. Since REEs have limited supply and their growing demand, it could result in significant returns for investors.
Some of the cons of buying Australian rare-earth stocks
- Volatility: Rare-earth stocks are known to be volatile, and investing in such stocks is risky. Though volatility can also work in investors’ favor, a sudden change in market conditions could result in significant losses.
- Environmental impact: Mining and production of rare-earth metals can have an adverse impact on the environment in the form of water pollution and toxic waste. Such risks could result in regulatory issues and may lead to delay or even stoppage of the project.
- Concentrated supply: The REEs supply is limited to a few countries, and thus, any unrest in the country could result in supply chain disruptions. The concentration of supply could also lead to price manipulation.
- Massive investments: Mining and production of rare-earth metals require massive investment from companies. If the project faces delays or the result is not as expected, it may result in financial issues for the rare-earth stocks.
Methodology: How we chose the best Australian rare-earth stocks
Though Australia is home to many rare-earth stocks, not all represent upside potential for investors. Thus, to select the best ASX-listed rare-earth stocks, we analyzed them using several parameters that are of interest to retail investors.
Some of the factors that we considered to shortlist the best ASX rare-earth stocks are:
- Quality of projects: We considered the number of projects that a rare-earth company is currently handling. More importantly, we considered the quality of those projects, such as ease of mining, volume of deposits, environmental constraints, and more.
- Cash burn rate: Mining and production of rare-earth elements is capital intensive and requires a good amount of money. We considered the amount of cash the company currently has on its balance sheet and its cash burn rate to shortlist the best rare-earth stocks.
- Past performance: To shortlist the stocks, we took into account their historical performance, primarily examining their past five-year return. The stocks that have given consistent returns over the past five years ranked high on our list of top ASX rare-earth stocks.
- Fundamentals: We focused heavily on the fundamentals of rare-earth companies to come up with the best rare-earth stocks in Australia. Stocks with sound financials and robust balance sheets scored high on our list.
- Tech prowess: Efficient mining and production of rare-earth elements require companies to have state-of-the-art technology. So, we preferred companies that have adopted the latest technological developments in the field and/or have partnerships with leading tech companies.
- Dividend: Though we did consider companies that pay no dividend or don’t regularly pay dividends, preference was given to stocks with regular dividends and higher payout ratio. A company that regularly pays dividends is considered to be more investor-friendly.
