China Adds U.S. Rare-Earth Firms to Export Controls; REXC Exposed
China placed MP Materials and USA Rare Earth on its export control list. The two firms account for 19.31% and 5.91% of the Sprott Rare Earths ETF (REXC) as of June 22, 2026.
Chinese authorities added U.S. rare-earth producers MP Materials and USA Rare Earth to the country’s export control list, a move announced in late June 2026 after Washington imposed restrictions on a number of Chinese firms earlier in the month. The new controls apply to exports and certain cross-border transactions involving the listed companies.
Beijing said the two U.S. firms have links to the U.S. military. MP Materials represented 19.31% of the Sprott Rare Earths ETF (REXC) by weight and USA Rare Earth represented 5.91% of the fund as of June 22, 2026, for a combined weighting of 25.22%.
Sprott launched REXC in April 2026. The fund’s net asset value rose 9.55% from its April inception through May 31, 2026. REXC concentrates holdings in rare-earth producers and processors, many of which are small- and mid-cap companies.
ETF structures allow shares to trade throughout the day like individual stocks. Funds that concentrate in small and mid-cap specialty miners have tended to show higher price volatility and higher portfolio turnover, which can increase transaction costs and taxable events for shareholders.
China has supplied a majority of processed rare-earth materials for decades. Restrictions on specific firms or on exports can affect the movement of feedstock and processed materials, contracts for supply and shipping arrangements, and operations at downstream processors.
U.S. and allied governments have announced funding and policy measures intended to expand domestic and allied rare-earth production and processing capacities. Market participants are monitoring whether China’s controls will trigger licensing or compliance requirements, changes to existing supply contracts, or shifts in shipping and downstream processing arrangements.
Regulatory notices and related guidance from Chinese and U.S. authorities will be watched for details on the scope of the controls and any exemptions or licensing procedures that may apply to affected companies and counterparties.
Articles by this author
