4 Critical Minerals Stocks That Could Benefit as the U.S. Reduces Reliance on China

The U.S. is reducing its reliance on China for critical minerals such as copper, lithium, silicon, neodymium, praseodymium, and rare-earth elements. Governments provide support through price supports, grants, loans, tax credits, and fast-tracked permitting. Four U.S. stocks stand to benefit from this trend: Freeport-McMoRan (FCX), MP Materials (MP), TMC The Metals Company (TMC), and USA Rare Earth (USAR).

Freeport-McMoRan, a Phoenix-based mining company, is one of the world's largest copper producers, with operations in multiple countries. The company's Grasberg minerals district in Indonesia has one of the largest copper and gold deposits globally. Freeport received an $80 million grant from the DOE's Office of Clean Energy Demonstrations. Its shares have risen over 29% this year.

MP Materials, which owns the Mountain Pass mine in California, is a key producer of rare-earth elements. The company reported a 59% year-over-year increase in revenue in the second quarter and raised its NdPr production by 41%. MP Materials has received grants and loans from the DOD and DOE. Its shares have fallen more than 19% this year.

TMC The Metals Company focuses on harvesting polymetallic nodules from the Clarion-Clipperton Zone of the Pacific Ocean. The nodules contain critical minerals like nickel, copper, cobalt, and manganese. While TMC isn't producing minerals yet and is still awaiting permits, it benefits from regulatory fast-tracking and strategic prioritization. The company has received funding from the U.S. Commerce Department but has lost money in recent quarters. Its shares have decreased more than 55% this year.

USA Rare Earth, which holds mining rights to the Round Top deposit in West Texas and the Pela Ema rare-earth mine in Brazil, focuses on an integrated mine-to-magnet supply chain. The company operates an NdFeB magnet production facility in Oklahoma and is expanding its production capacity. USA Rare Earth has received funding from the U.S. Commerce Department but faces risks due to its development stage. Its shares have fallen more than 12% this year.

Investors should consider Freeport-McMoRan as the safest bet among these four critical minerals stocks, given its established operations and recent positive performance. The other three stocks present varying levels of risk due to their different stages of development and dependence on future government support.