Why Energy Fuels Stock Popped on Friday (Hint: It's a Rare Earths Breakthrough)
Key Points
A major South Korean automaker has approved Energy Fuels' rare earths for commercial use.
The miner is targeting large-scale rare earth magnet production by the end of 2026.
Rare earth magnets are vital inputs for defense applications, automakers, and renewable technology.
- 10 stocks we like better than Energy Fuels ›
Energy Fuels (NYSEMKT: UUUU) was once known as a uranium stock, but that's no longer the case. The miner has just made a breakthrough in rare earth elements, and that's sending its shares soaring. On Friday, Energy Fuels stock surged 11.7% at its highest point in trading and remained up 7.5% as of 3 p.m. ET.
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Energy Fuels is rapidly building a rare earth portfolio
On Dec. 19, Energy Fuels announced that its 99.9% purity dysprosium oxide, a rare earth element, has passed the initial quality checks with a major South Korean automotive manufacturer.
Rare earths, a group of 17 elements, are essential materials for semiconductors, electronics, lasers, renewable energy technology, and military aircraft and equipment. Dysprosium is primarily used in hybrid and electric vehicles (EVs)https://www.fool.com/investing/stock market/market-sectors/consumer-discretionary/automotive-stocks/electric-car-stocks/, robotics, and defense systems such as missiles and drones.
South Korea is an automotive powerhouse, dominated by the auto major Hyundai. Much like the U.S., South Korea heavily relies on China for rare earths but has accelerated its efforts to secure alternative sources and solutions. Meanwhile, in the U.S., the Trump administration is taking bold steps to bolster domestic supply, even acquiring stakes in major rare earth producers, such as MP Materials.
In September, Energy Fuels also successfully processed another rare earth element, neodymium-praseodymium (NdPr) oxide, into magnets for commercial use by a South Korean manufacturer of EV motor units.
Watch Energy Fuels stock closely
Energy Fuels expects to commence terbium production before the end of 2025 and will subsequently initiate pilot production of gadolinium and samarium oxides.
Its rapid progress makes Energy Fuels one of the first companies in the U.S. to have both light and heavy rare earth elements qualify for processing into magnets for end use. By the end of 2026, the miner expects to have built large-scale production capacity for several rare earth elements. That makes Energy Fuels a no-brainer rare earths stock to watch.
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Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool recommends MP Materials. The Motley Fool has a disclosure policy.
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