Rare Earth Linked Stocks That Look Promising

There is a global shortage of rare earth elements (REEs) since China has imposed export restrictions from April 2025

Rare earth elements (REEs) are critical in various industry sectors such as automobile, defense, semiconductor and advanced machinery. While India has the world’s 5th largest reserves of rare earth elements, it has limited capacity to process and produce these rare earth elements. As of now, China controls around 90% of the world’s rare earth refining and processing capability. China also controls around 92% of the world’s rare earth magnet production.

Since the time China has imposed export restrictions on rare earth elements and rare earth magnets, India is looking to boost domestic production and find other global suppliers. A massive Rs 3,500-5,000 crore incentive plan has been announced to promote local production of REEs. Exploration projects to find REE resources have also been fast-tracked.

A number of companies will be involved in extraction, refining and processing of rare earth elements and rare earth magnets in India. This will be continued even if China lifts the restriction on exports. Stocks of these companies can witness a major boost in the future. Let us check them out.

NMDC (National Mineral Development Corporation) – A Navratna public sector company, NMDC is the largest iron ore producer in India. With its mining expertise, NMDC is now stepping up focus on finding and processing high-value materials. While rare earth elements are currently not on NMDC’s list, future collaborations are very much possible. NMDC has a global presence, which could be an advantage when it comes to securing supply of critical minerals.

GMDC (Gujarat Mineral Development Corporation) – A leading player in coal and bauxite production, GMDC is looking to expand its footprint in high-value minerals. The company has already formed a high-value minerals division. This team will be focused exclusively in exploring opportunities in lithium reserves, rare earth elements, phosphate, copper, etc. In addition to working independently, GMDC will also explore partnerships and joint ventures with other public sector undertakings.

Hindustan Zinc Ltd. – A leading producer of zinc, lead and silver, Hindustan Zinc Ltd. has started exploring opportunities in critical minerals. Germanium, which is a byproduct during zinc manufacturing, is already being produced commercially by Hindustan Zinc. With its expertise, Hindustan Zinc can explore opportunities in rare earth elements in the future.

Vedanta Limited – This Mumbai-based company operates various mines in states like Karnataka, Odisha, Rajasthan and Goa. Vedanta Limited already has a diverse portfolio including aluminium, zinc, copper, iron ore, oil and gas and power. Rare earth magnets could be a key focus area, as the company already has experience in handling monazite-bearing deposits. This expertise comes via the company’s zinc and aluminium mining operations.

IREL (Indian Rare Earths) – As of now, Mumbai-based IREL is the only Indian company focused on mining and refining rare earth metals. The current focus is on mining and exporting rare earth metals. With the global shortage of rare earths, IREL can soon look into increasing its mining activities and also focus on refining and processing. While IREL is currently not a listed company, an IPO could be announced in the future. The IPO funds can be used for the company’s expansion and diversification.