Energy Fuels Inc.: A Rare Earth Opportunity Amid Chinese Export Controls

The global rare earth elements (REE) market is undergoing a seismic shift. On April 4, 2025, China imposed stringent export controls on seven critical medium and heavy REEs—samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium—a move that threatens to disrupt supply chains for industries ranging from defense to clean energy. Yet, one U.S. company stands uniquely positioned to capitalize on this crisis: Energy Fuels Inc. (NYSE: EUU). With the capacity to produce six of the seven controlled oxides at scale, Energy Fuels could emerge as a strategic bulwark against China’s dominance.

Strategic Position: Filling the Rare Earth Void

China’s export controls target heavy and mid-REEs, which are indispensable for advanced technologies:
- Samarium (Sm) and gadolinium (Gd) are used in magnets for electric vehicles and wind turbines.
- Terbium (Tb) and dysprosium (Dy) are critical for high-performance magnets and nuclear control rods.
- Lutetium (Lu) and yttrium (Y) are vital for medical imaging and solid-state lighting.

Energy Fuels’ White Mesa Mill in Utah, the sole U.S. facility licensed for uranium and REE processing, already produces these oxides. Its monazite mineral processing stream—sourced from heavy mineral sands (HMS) mines—yields a mix of light, mid, and heavy REEs. By 2028, if permitted, Energy Fuels aims to expand monazite processing from 10,000 to 60,000 tonnes annually, drastically increasing output of controlled oxides:

REE Oxide	Current (tpa)	2028 Target (tpa)
Samarium (Sm₂O₃)	138	829
Gadolinium (Gd₂O₃)	134	801
Dysprosium (Dy₂O₃)	48	286
Terbium (Tb₄O₇)	14	81
Lutetium (Lu₂O₃)	1	6
Yttrium (Y₂O₃)	126	753

This expansion would make Energy Fuels a key supplier of oxides critical to U.S. defense and clean energy sectors, directly countering China’s 92% global refining monopoly.

Why Scandium is the Missing Piece—and Why It Matters

Energy Fuels explicitly lacks the ability to produce scandium (Sc) oxide, the seventh controlled material. This is due to scandium’s absence in monazite, the company’s primary feedstock. While scandium is used in aerospace alloys and solid-state batteries, its exclusion means Energy Fuels cannot fully replicate China’s controlled list. However, the company’s focus on high-value mid/heavy REEs aligns with the most immediate geopolitical risks: samarium-cobalt magnets (used in F-35s) and dysprosium-heavy NdFeB magnets (critical for EVs).

Risks and Realities

Energy Fuels’ success hinges on three factors:
1. Permitting and Financing: Its Southern Hemisphere HMS projects (Madagascar, Brazil, Australia) must secure permits by 2028 to meet production targets.
2. Third-Party Supply: Until its mines come online, Energy Fuels relies on third-party monazite purchases—a volatile dependency.
3. Government Support: The U.S. Section 232 investigation into critical mineral imports, announced in April 2025, could provide tariff relief or subsidies.

The stock has surged +140% year-to-date amid geopolitical tensions, but volatility remains. Analysts warn of execution risks: delays in mine development or a collapse in REE prices (due to overproduction) could derail valuations.

Conclusion: A High-Reward, High-Risk Play

Energy Fuels is a strategic bet on U.S. rare earth independence. Its White Mesa Mill and HMS projects could supply ~2,500 tonnes annually of controlled oxides by 2028—a fraction of China’s output but a critical domestic alternative. With China’s export controls likely to cause 500% price spikes for some REEs, Energy Fuels stands to profit handsomely if it executes its expansion.

However, investors must weigh the risks:
- Geopolitical Tailwinds: U.S. policy support could accelerate permitting and funding.
- Technical Feasibility: The company’s pilot-scale REE separations since 2021 suggest scalability.
- Market Demand: The clean energy transition and defense spending ensure long-term demand for these oxides.

For those willing to tolerate risk, Energy Fuels offers a once-in-a-decade opportunity to invest in a company positioned to reshape the global rare earth landscape.

Final Note: Monitor Energy Fuels’ permitting progress in 2026 and 2027—their Southern Hemisphere projects are the linchpin to realizing these targets. A delay could mean a rerating to the downside, while success could cement Energy Fuels as a cornerstone of U.S. critical mineral security.