The combination of scarcity and utility creates valuable commodities. And that describes rare earth metals perfectly. 

All the new technologies need rare earth metals in the form (mainly) of permanent magnets. These strong, small magnets go into everything these days. All the new, small electric motors, hard disk drives, cell phones, speakers, headphones, MRI machines, precision-guided missiles, military communications, etc. 

The problem with rare earth metals is that China dominates supply. It’s not that the country has all the deposits, but rather that it controls all the refineries and magnet manufactories:

1. 70% of rare earth extraction
2. 90% of rare earth refining
3. 90% of rare earth magnet manufacturing

That gives China an overwhelming economic lever to put pressure on other countries. For example, in 2010, China refused to sell rare earth metals to Japan over a territorial dispute. That immediately strangled Japan’s car and electronics industries. It was the first time that China flexed its economic muscle. 

They did it again in 2024, when it restricted “dual-use” metals to the U.S. And again in 2025, when they severely reduced heavy rare earth exports to the U.S. 

Their ability to manipulate the market and demand for these metals keeps prices extremely high. For example, Neodymium traded around $145,000/t on August 4, 2026; that’s much higher than a year ago.

The solution to this problem isn’t in developing a U.S. mining/refining/magnet manufacturing chain. The real solution is to innovate new magnet technology. 

Permanent magnets are not solely made from rare earths. There are several research groups focused on innovation. The most advanced is an iron-nitride battery made by Niron Magnetics. This company formed from a partnership between the University of Minnesota and the U.S. Department of Energy back in 2013.

The co-founder of Niron, Dr. Jian-Ping Wang, is passionate about permanent magnets: 

“Permanent magnets are the unsung heroes of our modern society. Without them, many systems just don’t work. They convert electrical energy into mechanical motion in the most energy-efficient way. They’re in everything.”

Unfortunately, it’s private. This is exactly the kind of company that we want to own. Magnets, like batteries, are critical to technology. The companies that can disrupt the status quo are going to make investors rich.

Today, the company plans to disrupt rare earth magnets with its innovative technology. They currently plan to build a new 1.6 million-square-foot plant that can produce up to 2% of the world’s magnet demand.

Don’t get me wrong. This one company won’t derail the need for rare earth magnets. But this does point to a future where we have competition. That’s critical, because as we discussed, China will use its near-monopoly to coerce other countries to toe its line.

Have a great weekend!