4 Critical Minerals Stocks That Could Benefit as the U.S. Reduces Reliance on China
The U.S. effort to reduce its dependence on China for critical minerals has led to a boon for U.S.-related critical mineral stocks , including copper, lithium, silicon, and neodymium and praseodymium, which are used in permanent magnets, as well as companies that produce rare-earth elements.
One of the key drivers for these stocks is government support in the form of price supports, grants from the Department of Defense (DOD) and the Department of Energy (DOE), low-cost loans, tax credits, and fast-tracked permitting.
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Freeport-McMoRan(NYSE: FCX), MP Materials(NYSE: MP), TMC The Metals Company(NASDAQ: TMC), and USA Rare Earth(NASDAQ: USAR) are expected to be the key U.S. beneficiaries of the increasing need for U.S.-based critical minerals. However, they present wildly different investing situations.
Freeport-McMoRan is showing solid growth
Freeport-McMoRan is a Phoenix-based mining company and one of the world's largest producers of copper, a critical mineral used in electronics, electric vehicles (EVs), wind and solar infrastructure, national defense systems, and artificial intelligence (AI) data center infrastructure. The company also produces molybdenum, a critical mineral used to strengthen steel, and gold.
The company reported third-quarter revenue of $7.5 billion, up 8% year over year, and earnings per share (EPS) of $0.81, an increase of 76% over the third quarter of 2025. Its shares are up more than 29% so far this year.
The miner's Grasberg minerals district in Papua, Indonesia, has one of the world's largest single copper and gold deposits. Freeport also operates significant copper mines in Arizona, New Mexico, Peru, and Chile. Freeport-McMoRan received an $80 million grant last year from the DOE's Office of Clean Energy Demonstrations for its MILESHIGH Project.
MP Materials is ramping up production
MP Materials owns and operates the Mountain Pass mine in California, the only active, large-scale rare-earth mining and processing site in the United States. The processing part is key because there are few alternatives outside China for processing rare-earth elements.
The stock is down more than 19% this year, but the company is making progress in increasing its production of neodymium & praseodymium (NdPr), critical elements for ultra-strong permanent magnets used in EV motors, wind turbine generators, and military guidance systems.
In the second quarter, MP Materials reported revenue of $108.4 million, up 59% year over year, and trimmed its net loss by 34% over the same quarter last year, to $20.3 million. More importantly, it is raising its NdPr production and sales, with production of 840 metric tons, up 41% year over year, and NdPR sales of 1,006 metric tons, an increase of 127% over the same period last year.
MP Materials has received both grants and loans from the DOD, including a $35 million grant from the DOD in 2022 to build the first heavy rare-earth element separation facility in the U.S. and a $150 million loan in August, 2025 from the Office of Strategic Capital to build its separation facility at Mountain Pass.
USA Rare Earth is boosting its processing capabilities
USA Rare Earth focuses on an integrated mine-to-magnet supply chain, through producing heavy rare-earth elements (HREEs) and neodymium-iron-boron (NdFeB) permanent magnets.
The company holds the mining rights to the Round Top deposit in Hudspeth County, West Texas, which contains significant heavy rare-earth elements and other critical minerals. It also spent $2.8 billion to purchase the Serra Verde Group, which owns the Pela Ema rare-earth mine and processing plant in Goiás, Brazil. The acquisition secures the only large-scale producer of vital HREEs outside Asia.
USA Rare Earth operates an NdFeB magnet production facility in Stillwater, Oklahoma, and is expanding its metal-making and magnet production facilities, having just broken ground on a second site in Blacksburg, South Carolina, and is finishing a hydrometallurgical facility in Wheat Ridge, Colorado.
While the company's extraction capacity is expanding, it isn't profitable and produces little revenue. It also has to demonstrate operational efficiency once all its facilities come online. It does have roughly $1.6 billion in funding from the U.S. Commerce Department. The stock is down more than 12% this year
TMC The Metals Company focuses on underwater mining
TMC is a deep-sea exploration and mining company focused on harvesting polymetallic nodules from the Clarion-Clipperton Zone of the Pacific Ocean. The nodules are rich in critical minerals, including nickel, copper, cobalt, and manganese.
Because TMC isn't producing minerals yet and is still awaiting permits to begin production, it is the riskiest of these four critical minerals stocks. Its shares are down more than 55% so far this year. In the second quarter, it reported having $143 million in cash but lost $60 million. Its shares are down more than 55% so far this year.
The company said it expects to receive an undersea mining permit from the National Oceanic and Atmospheric Administration (NOAA) before the fourth quarter of 2027.
TMC isn't yet receiving direct governmental financial assistance, but it benefits from regulatory fast-tracking through NOAA and strategic prioritization by Congress and the DOD for future critical mineral supply chains.
Your investment depends on your risk tolerance
All four stocks are in an emerging industry. However, the safest bet of the four is Freeport-McMoRan, which is why it is the only company whose shares are up so far this year. The other three have varying levels of risk. MP Materials is ramping up production and seeing improved financials, while USA Rare Earths and TMC The Metals Company are still in the development stages.
It's difficult to see who the winners will be in critical minerals at this point, but it makes sense to invest in companies that already have an early mover advantage, such as Freeport-McMoRan and MP Materials.
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James Halley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends MP Materials. The Motley Fool has a disclosure policy .
4 Critical Minerals Stocks That Could Benefit as the U.S. Reduces Reliance on China was originally published by The Motley Fool
