It feels like there’s a mining boom coming, and it could be a big one.

This time round, though, it’s likely to be somewhat different from recent predecessors. 

We all know the mining equities markets are cyclical, as oversupply contracts markets, which then react to undersupply subsequently to undergo a renewed period of expansion.

So much for economics 101.

But the growing momentum in today’s mining markets is affected by factors that haven’t been present before – Trump and China. To be sure, China played a large role in the boom of the early 2000s, but in quite a different capacity. Then, it was all about the exponential double digit growth of a huge, emerging economy.

Now, though, China has emerged. The question is what does everybody do next?

Trump’s answer is tariffs. And we’ll see if that’s a good response or not in the coming years. 

In the meantime, China has grown large enough and influential enough to hit back. 

And one chosen arena is rare earths.

More restrictions on rare earths exports were announced this week, and in response rare earth miners without direct exposure to the hugely influential Chinese supply chain suddenly found themselves in demand. An additional spur to that demand is a new dynamic in the market place, something we’ve not seen in the modern era: the US government showing interest in taking direct stakes in companies. 

That’s not all Trump. Part of it is a legacy of President Biden’s Inflation Reduction Act, which, although it did not deliver a reduction in inflation, did deliver a hefty cash injection into the mining sector. And not just in the US, but around the world.

So, when further tightening in the rare earths supply chain is mooted or announced, the market is already primed to move.

And move it did.

This week, on the US side of the Atlantic shares in Critical Metals, Ramaco, NioCorp, Trilogy Metals and MP Metals all rose. 

Also on the move was the VanEck Rare Earth and Strategic Metals ETF, which has surged nearly 91% so far this year.

On the UK side, though, there’s also a sizeable rare earths contingent, even allowing that not all rare earths companies are equal. Shares in Pensana (PRE), which has an asset in Angola, have risen more than sixfold over the past six months, shares in Rainbow Rare Earths (RBW) have more than doubled, while shares in Mkango (MKA) are almost up tenfold. Mkango is now worth an amazing £180 million, a valuation partly based on its twin focus on the upstream aspect of the rare earth business as well as primary mining. Shares in Altona Rare Earths (REE) have done less well, however, perhaps because of the complexity and high development costs involved at its asset in Mozambique.

Perhaps the most interesting opportunity, though, is the most recent arrival on the main market, Harena Resources (HREE). Against the current economic and commodities backdrop it seems that Harena timed its listing to perfection. But it’s not just the commodity, it’s also the positioning. 

The company has an asset on the north coast of Madagascar, very close to a port, which means that logistically-speaking, it should be able to plug into US the supply chain. To that end, Harena chief Ivan Murphy has been building bridges in Washington DC, having held several meetings with high level government officials. 

The company’s Ampasindava asset is well advanced, and is certainly not, as Murphy is often at pains to point out, simply an exploration play. Rather, we are not far off development here, and as things stand, the financing costs ought not to be too high. 

If it’s true to say that some rare earths companies are already fully valued, others, like Harena, still offer plenty of upside. Van Eck may be up 91%, but Harena’s gains still look like being ahead of it.