Shares in London-listed rare earth miners surged on Thursday following reports the US Pentagon is looking to secure supplies of the niche minerals from outside China.
Africa-focused miners Rainbow Rare Earths and Mkango Resources both jumped by over 40 per cent in morning trading on the news.
The Pentagon has held talks with both companies following threats by Beijing to cut off supply to the country, Reuters reported, citing a material engineer at the Defense Logistics Agency speaking at a conference in Chicago.
Rainbow Rare Earths, which is developing a project in Burundi, said it could neither confirm nor deny the news. Mkango, which wants to build a mine and processing plant in Malawi, did not immediately respond to a request to comment.
Rainbow Rare Earths last traded up 38 per cent at 7.69p, while Mkango was up 42 per cent at 10.375p.
Rare earths are a group of 17 niche minerals that are used in electronics, electric cars, and some military equipment such as night vision goggles and lasers.
China accounts for almost 80 per cent of the global mined supply of rare earths and an even larger share in rare earth magnets used in wind turbines and electric car motors.
This week the US Commerce Department warned that any halt to China’s rare earth exports would cause “significant shocks” to US and foreign supply chains.