The Best Rare Earth Stock to Buy and Hold for the Next Decade

Idaho Strategic Resources (NYSEMKT: IDR) has a leg up on many other U.S. rare-earth-metal miners, because it is already a profitable gold-mining company that also has substantial rare-earth deposits.

It had already identified rare-earth deposits at its Lemhi Pass and Mineral Hill mines. On July 23, it announced that it had discovered significant heavy rare-earth-element mineralization, including the increasingly important element yttrium, at its Diamond Creek project. Yttrium has unique magnetic, optical, and thermal properties that make it crucial across several high-tech industries.

Here are three reasons why the mining stock is a good buy-and-hold stock for the next decade.

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Profitable gold production funds its growth

Unlike speculative junior miners that rely heavily on equity dilution, Idaho Strategic is an established, profitable gold producer. Centered on its flagship Golden Chest Mine in Idaho, the largest gold-producing mine in the state, the company uses steady cash flow from active operations to fund ongoing mine development and exploration projects.

This organic model has yielded impressive financial results, including consecutive years of double-digit revenue growth and record net income. With an expanding reserve base and low debt, the company maintains a robust balance sheet while insulating shareholders from capital raises.

In the first quarter, it reported revenue of $14.5 million, up 98% year over year, and earnings per share (EPS) of $0.40, up 233% over the first quarter of 2025. Most of its rare-earth elements (REE) exploration efforts this year will be at its Mineral Hill and Lemhi Pass projects.

It doesn't deal with foreign governments

Mining operations carry significant political, regulatory, and geopolitical risks, particularly in developing nations. Idaho Strategic operates entirely within Idaho, one of the top mining jurisdictions in North America.

Local infrastructure, clear legal frameworks, and strong local community support help mitigate systemic regulatory hurdles. Additionally, the company's underground operations draw power from a regional electric grid heavily supplied by clean hydroelectricity, protecting it from the extreme fuel cost spikes that frequently affect remote, open-pit mining operations.

It benefits from government help

In May, the company was selected to receive up to $1 million in grant funding under the U.S. Department of Energy's Critical Material Innovation program. The initiative creates a statewide collaborative framework uniting Idaho Strategic Resources with the University of Idaho, Idaho National Laboratory, and the Idaho Geological Survey. Designed to advance early-stage, high-impact processing methods rather than incremental adjustments, the program focuses on pioneering novel extraction, separation, and low-emission manufacturing pathways for local critical minerals.

Idaho Strategic Resources will identify target zones within its central Idaho holdings that are enriched in key magnet rare-earth minerals, specifically neodymium, praseodymium, and dysprosium. The company is partnering with the University of Idaho to gather representative mineral samples for downstream separation and potential metallization testing, backed by technical guidance from the Idaho National Laboratory and the Idaho Geological Survey.

Idaho Strategic Resources is not required to provide a direct cost share as the industry partner, allowing the project to align with its planned 2026 rare-earth element exploration season across its extensive Idaho landholdings.

Yes, there is some risk

The company's stock is up more than 77% over the past year, but down more than 24% so far this year. While the company is successful at producing gold, it hasn't yet produced rare-earth metals at scale. The company faces the same concerns as other REE producers in the U.S., as domestic rare-earth metallurgy and separation processing are complex, expensive, and historically difficult to commercialize profitably.

This is a small-cap stock with a market value of only around $482 million, so it's more prone to volatility. Plus, all of the company's operating cash flow comes from a single producing asset, the Golden Chest Mine. If operational disruptions occur, such as underground rockfalls, processing bottlenecks at its New Jersey Mill (in Idaho), unexpected grade dilution, or local environmental permitting delays, Idaho Strategic Resources lacks a secondary producing mine to offset revenue losses.

On the other hand, the company is fiscally sound, with $20.7 million in cash and only $6.6 million in total debt, and has a debt-to-equity ratio of only 0.02, so it can handle disruptions fairly easily. Considering the growth potential of rare-earth stocks, Idaho Strategic Resources is one of the safer bets in the industry.

James Halley has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.