HANetf and precious metals specialist Sprott have joined forces to launch a rare earths UCITS ETF, which excludes exposure to China.
The Sprott Rare Earths Ex-China UCITS ETF (REXC) provides exposure to companies outside of China which are involved in the mining, refining, separation and production of rare earths.
Rare earths are 17 different metallic elements which have properties deeming them important for certain advanced technologies. These include magnets used in electric vehicles, wind turbines and defence systems, among other uses.
The launch comes following a highly concentrated supply chain for rare earths, according to HANetf and Sprott.
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Data from the International Energy Agency shows that, in 2024, China accounted for 91% of global refined output of magnet rare earths. Some 94% of sintered permanent magnet production also derives from China.
As such, HANetf and Sprott say there is an “increased urgency” for other countries to create alternative supply sources, for “industrial competitiveness and national security” reasons.
John Ciampaglia, chief executive officer at Sprott Asset Management, said: “Rare earths sit at the intersection of national security, energy security and technological leadership.
“As developed market governments move to secure rare earths supply chains outside China, we believe companies across the ex-China rare earths value chain are strategically positioned.
“We are pleased to partner with HANetf to offer European investors targeted access to this opportunity through an ETF.”
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Hector McNeil, co-founder and co-CEO of HANetf, added the firm is “delighted to expand [its] partnership with Sprott through the launch of the Sprott Rare Earths Ex-China UCITS ETF”.
“Rare earths connect several of the major investment themes shaping markets, from defence and energy security to electrification and advanced technology,” he explained. “Across these areas, securing access to essential materials is becoming an increasingly important consideration.
“REXC gives European investors a focused way to access companies involved in developing rare earths supply chains outside China. It complements Sprott’s existing uranium, copper, and silver products on our platform, broadening the opportunities available to investors looking at the materials underpinning these long-term themes.”
