Jun 4, 2026
Investors worried about inflation, government debt, geopolitical tensions and market volatility have piled into gold, helping push prices to near-record highs. But while gold dominates the headlines, another corner of the commodity market is quietly becoming a strategic priority for governments around the world.
On June 1, USA Rare Earth [NASDAQ:USAR] announced plans to invest more than 175 million euros — about $204 million — in France by 2030 to expand its rare-earth metals, alloys and magnet manufacturing operations.
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The investment aligns with efforts by the U.S. government to build supply chains outside of China and secure access to materials considered critical to national security and advanced manufacturing. The project could create more than 300 jobs and may receive support from the French government.
The announcement underscores how countries aren’t just competing for oil anymore. They’re scrambling to secure access to the metals and minerals needed to build electric vehicles, semiconductors, wind turbines, data centers, military equipment and artificial intelligence infrastructure.
For investors, that raises an intriguing question: could critical minerals become a useful complement to traditional portfolio holdings?
Why rare earths suddenly matter so much
Despite the name, rare earths aren’t especially rare. The challenge is processing them.
China dominates the global rare-earth industry, controlling roughly 70% of mining production and about 90% of processing and refining capacity. It also manufactures the vast majority of the permanent magnets made from those materials.
That dominance has become increasingly uncomfortable for Western governments. Over the past two years, Beijing has tightened export controls and imposed new restrictions on certain rare-earth products and technologies, underscoring how dependent many industries remain on Chinese supply chains.
The result has been a surge of investments across the U.S., Europe, Canada and Australia aimed at creating alternative sources of supply. USA Rare Earth’s expansion in France is just one example of a broader effort to build a Western rare-earth ecosystem that can compete with China’s stronghold.
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How investors can get exposure
Most Americans aren’t going to buy and store rare earth elements the way they might purchase gold coins.
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Investors typically gain exposure through mining companies, exchange-traded funds focused on critical minerals or broader natural-resource funds. These investments can benefit when demand for strategic materials rises, particularly as governments subsidize domestic production and manufacturers seek secure supply chains.
The opportunity extends beyond rare earths themselves. Other critical minerals, including lithium, copper, nickel and graphite, are essential for batteries, power grids and clean-energy projects. Demand forecasts for many of these materials remains strong as countries continue investing in electrification and digital infrastructure.
But these investments can be much more volatile than gold. Prices often swing based on government policy, global trade disputes, technological changes and shifts in industrial demand.
Diversification is key
Gold has historically served as a hedge against uncertainty. Critical-mineral investments offer exposure to a different trend: the global race to secure the raw materials that power modern economies.
Before investing in rare-earth or critical-mineral funds, it’s important to keep their volatility in mind. Many companies in the sector are small, unprofitable and heavily influenced by government policy, trade disputes and commodity-price swings.
Rather than betting on a single mining company, consider diversified ETFs that spread risk across multiple firms and minerals. Investors should also pay attention to expenses, geographic concentration and how much of a portfolio is tied to one theme. As with any speculative investment, experts generally recommend limiting exposure to a small portion of your overall portfolio.
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Chris Clark is a Kansas City–based freelance journalist covering personal finance, housing and retirement. A former Associated Press editor and reporter, he writes plainspoken stories that help readers make smarter financial decisions.
