Ford Shuts Its Doors as Rare Earth Grip Tightens | Term Deposits

There’s been a lot of dialogue about threats to uncommon earth provide chains.

You’d be forgiven for pondering that is an overblown matter that’s maybe captured an excessive amount of airtime within the media.

So, is that this actual?

Are producers truly beneath menace from Chinese export bans of uncommon earths?

As far as I can inform, cracks are starting to emerge the place provide is having a actual influence on industry.

Take this text from the US as an instance:

According to the piece, Ford’s CEO mentioned a scarcity of uncommon earth minerals quickly prompted the automaker to close down some of its plants final month.

Stating: “We have had to shut down factories. It’s hand-to-mouth right now.”

You can learn the total piece right here.

Mining Memo’s Take

Right now, situations are ripe for uncommon earth stocks to maneuver increased.

But let’s step back for a second to grasp why this market has modified from desperately detrimental to extremely bullish in 2025.

Two years in the past, the pivot away from renewables drove buyers out of crucial metallic stocks, which included uncommon earth stocks.

But one other main drawback for this sector was Tesla’s announcement that it might take away uncommon earth metals from its next-generation autos.

The market seen this as a massive deal concerning the outlook for REEs.

Specifically, the Neodymium and Praseodymium (NdPr) metals within the uncommon earth bundle… these are the important thing components utilized in everlasting magnets for electric autos.

Investors panicked and offered off uncommon earth stocks, sending these corporations to new all-time lows.

So, why was Tesla doing this?

Well, clearly, it might see provide chain vulnerabilities on the horizon.

However, it was additionally trying to scale back prices by up to 50% whereas scaling its world vehicle gross sales from 1.3 million to twenty million autos by 2030.

This is what I wrote in 2023, within the wake of the uncommon earth sell-off:

“NdPr magnets are the superior choice when it comes to EV production.

They offer significant performance benefits, enabling the development of compact, torque- and power-dense electric motors.

According to some experts, replacing rare earth magnets from its next-generation fleet will inevitably compromise efficiency.

There’s a fine line between cost and performance in electric vehicle design.

But Tesla appears to be shifting dramatically toward cost savings, slashing production expenditures to deliver low-cost EVs for the mass market.”

With fears that different EV makers would comply with the identical path, uncommon earth stocks entered a deep bear market in 2023 and 2024.

But as you understand, sentiment has since flipped in 2025… China has kicked off uncommon earth export bans in opposition to the West.

Meaning uncommon earth stocks are scorching again within the eyes of buyers!

But is the underlying menace to REE stocks nonetheless there?

Crisis creates innovation.

And that’s maybe one cause why China hasn’t totally deployed its uncommon earth trump card: a full export ban to the West.

Doing so would possibly trigger innovation and a new technology that displaces the need for uncommon earths.

For instance, some specialists counsel NdPr magnets could possibly be changed with ferrite magnets, which primarily use iron oxide with barium and strontium components.

In truth, some car producers are already utilizing the technology with blended success.

The benefit is that iron oxide is extremely considerable and low-cost in comparison with Rare Earths.

However, that comes with a loss in effectivity.

According to Adamas Intelligence, the additional ‘weight penalty’ of ferrite magnets interprets into shorter distances between every charge.

Historically, that’s been one of the principle sticking factors for EV uptake over standard vehicles.

Especially right here in Australia, with long distances between recharge stations.

Rare earth magnets offered the breakthrough that lifted EVs into the identical league as standard vehicles…

Where the recharge distances might match the refilling distance of a gasoline vehicle.

But for now, there’s no commercial-scale different to rare-earth magnets—or a minimum of one that may match them in phrases of efficiency.

So, what does that imply?

For buyers, uncommon earth stocks are the chance.

A key strategy (or portfolio hedge) to play ongoing stress between China and the US.

Until subsequent time.

Regards,

James Cooper,
Editor, Mining: Phase One and Diggers and Drillers

All advice is normal advice and has not taken under consideration your personal circumstances.

Please search impartial financial advice concerning your own state of affairs, or if unsure concerning the suitability of an investment.

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