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Bypassing China: The $3B Opportunity for Rare Earths

· ETF Trends

Bypassing China: The $3B Opportunity for Rare Earths

If anyone was expecting U.S.-China tensions over critical minerals to simmer down any time soon, August has already put those thoughts to rest.

Key Takeaways:

  • The United States has announced $3 billion in new investments to support a variety of critical minerals and battery projects.
  • These developments further the use case for ex-China rare earths, driven by long-term material demand and strong geopolitical incentives.
  • Sprott offers straightforward access to ex-China rare earths through the Sprott Rare Earths Ex-China ETF (REXC).

On Friday, August 7, President Trump announced that the U.S. plans to invest $3 billion in a variety of different critical minerals and battery projects. These initiatives aim to amplify domestic production and aid the U.S. defense and industrial sectors.

Crucially, these measures will help reduce U.S. dependence on China for critical minerals. As China still has a significant chokehold on the critical minerals industry, every domestic investment incentive will enable the U.S. to stand on its own two feet and curate its own critical minerals supply chain.

Of course, this also works distinctly in favor of critical minerals companies based in the United States. Many of these firms are now getting a significant and steady injection of federal funding. As one example, the Defense Department Office of Strategic Capital extended a $400 million loan to Sunrise Energy Metals.

Together, these developments strengthen the case for building exposure to the ex-China rare earths industry, as companies domiciled outside of China stand to benefit most from initiatives.

See More: Sprott’s Schoffstall on Rare Earth Portfolio Drivers & More

Riding the Ex-China Rare Earths Wave With REXC

The Sprott Rare Earths Ex-China ETF (REXC) can help advisors and investors amplify their exposure to ex-China rare earths. REXC offers a diverse range of exposure to mining companies outside of China that work with a variety of different rare earths. This includes companies domiciled in the United States, Canada, and Australia, among others.

Given that REXC holds a number of U.S.-based rare earth companies, it is naturally well positioned to benefit from the new government funding. For instance, Sunrise Energy Metals is currently a top holding within REXC’s portfolio, as of August 10, 2026.

Looking at the big picture, REXC’s approach should keep it well-positioned in the months to come. As rare earths will remain crucial to industrial, AI, and defense applications, ex-China companies will continue to benefit from government incentives. For those who are optimistic about the rare earths opportunity set, REXC offers a compelling way to gain access.

For more news, information, and analysis, visit the Gold/Silver/Critical Minerals Content Hub.

Disclosures

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