Rare Earth ETF Hovers Near Yearly Floor as Canberra Weighs Seizing a Mine

A potential state takeover in Australia and a murky set of Chinese export figures are giving investors little reason to bid up a fund already nursing steep losses.

The VanEck Rare Earth ETF (ISIN IE0002PG6CA6) closed Friday at EUR 9.61, down 1.1% on the day and just over 2% above its 52-week low of EUR 9.41. The fund has shed 17% over the past 30 days and is down 23% year to date — a slide that has persisted even as Western capitals talk up the urgency of breaking China's grip on the sector.

A Mine at the Center of a Standoff

Australia's resources minister, Madeleine King, said Wednesday that nationalizing rare-earth developer Northern Minerals was "an option," after China-linked investors again refused to divest their stakes as ordered. No final decision has been made, she stressed.

The dispute centers on Northern Minerals' Browns Range project, one of the few prospective sources outside China for the heavy rare earths dysprosium and terbium. Those heavy varieties are considered especially critical for the high-performance magnets used in wind turbines, electric motors and defense equipment. That Canberra is openly weighing a state seizure underscores how seriously Western governments now view dependence on Chinese capital — even in projects located far from China.

For holders of the VanEck fund, which spreads its bets across miners and processors throughout the industry, the standoff adds a layer of regulatory uncertainty to a key holding in the broader push to diversify away from China.

Beijing Signals Continuity, Data Suggests Otherwise

China, for its part, struck a conciliatory tone. Commerce ministry spokesman He Yadong said Beijing is prepared to keep granting rare-earth export licenses to Europe, including beyond the January expiry of its trade truce with Washington.

The customs numbers tell a less reassuring story. September exports came in at 4,269.8 tonnes — 6.7% above the year-earlier level but 9.8% below August. For the first nine months of 2026, shipments totaled 43,711 tonnes, a decline of 9.6% from the same period a year earlier. A monthly rebound set against a weaker nine-month trend leaves investors with little clarity on where supply is actually heading.

Questions also linger over how durable the recent U.S.-China détente really is. The commerce ministry said, according to media reports, that trade arrangements between the two countries had been extended to January 10, 2027. It remained unclear, however, whether that explicitly confirmed a new suspension date for rare-earth export controls. The ambiguity leaves investors guessing whether the easing of licensing announced in October will hold or could be reversed at any moment.

Brussels Looks to Vietnam

The European Union is pressing ahead with its own diversification efforts. Reuters reported that EU documents call for deeper engagement with Vietnam as an alternative to China on critical minerals — a direct response to the supply-chain disruptions caused by Beijing's export restrictions. Such initiatives show that building mining and processing capacity independent of China sits high on the political agenda, even if the process is likely to take years.

Portfolio Heavyweights Weigh on the Fund

Little of that political momentum has reached the capital markets. Shares across the rare-earth sector fell sharply a few days ago after doubts emerged over milestone-linked state funding for USA Rare Earth. MP Materials also weakened in that environment. Both rank among the larger positions in thematic rare-earth funds, so weakness in individual holdings feeds straight through to the performance of such ETFs.

The fund's technical picture remains strained. A relative strength index of 19.9 signals oversold conditions, yet with export policy still unresolved, that indicator alone is not enough to justify calling a lasting turn.

The mix of ambiguous export data, company-specific pressure on sector heavyweights and vague political assurances explains the 23% decline since the start of the year. Until Beijing or Washington delivers a binding, dated rule on export controls, volatility in the sector looks likely to stay elevated. The underlying tension persists: the West wants to depend less on China, but Beijing still controls the bulk of global supply.