Cleveland-Cliffs is best known for steel. It has been an anchor of American industrial production for more than a century. But in 2025, the company’s future may be shifting toward an entirely different material: rare earth minerals.
During its recent quarterly earnings call, CEO Lourenco Goncalves announced that the Ohio-based steelmaker is preparing to explore domestic rare earth deposits at two of its existing mining sites—one in Michigan and another in Minnesota.
“Beyond steelmaking, the renewed importance of rare earths has driven us to re-focus on this potential opportunity at our upstream mining assets,” Goncalves said. “It is our obligation to do so as a company with our geological footprint.”
Geological surveys at both sites show indicators of rare earth mineralization, prompting Cleveland-Cliffs to consider a significant diversification of its mining operations.
For investors, that single announcement marks a potential turning point. The company could be positioning itself at the center of a strategic race that now defines global manufacturing and national security alike.
Rare Earths: The New Industrial Battleground
Rare earth minerals are essential to modern life. They are critical components in smartphones, wind turbines, electric vehicles, fighter jets, and missile guidance systems. Yet nearly all of the world’s refining capacity sits in China—a geopolitical vulnerability that U.S. officials have grown increasingly concerned about.
President Trump has made it clear that reducing dependence on Chinese-controlled supply chains is a national priority. His administration’s trade advisers and economic team have emphasized that critical materials must be sourced domestically.
“If successful, it would align Cleveland-Cliffs with the broader national strategy for critical material independence, similar to what we achieved in steel,” Goncalves said during the call.
The statement was a deliberate echo of the Trump administration’s goal to restore industrial self-reliance. Treasury Secretary Scott Bessent reinforced that theme, saying that the United States “does not want to escalate a trade conflict with China” but needs a more balanced relationship that no longer depends on Chinese rare earth exports.
U.S. Trade Representative Jamieson Greer put it more bluntly:
“To paraphrase the secretary in one of our recent meetings with the Chinese, this is the last time we want to be talking about rare earths with the Chinese.”
That single comment underscores why Cleveland-Cliffs’ announcement is so significant. It is not only a corporate strategy but also a move in a much larger geopolitical chess match.
Why This Matters for Investors
Cleveland-Cliffs is now trying to bridge two very different worlds: the cyclical business of steelmaking and the emerging, high-value sector of critical minerals.
For shareholders, that presents both a new growth narrative and a new layer of risk.
Rare earth exploration is still early-stage. Cleveland-Cliffs has yet to publish a resource estimate or feasibility study, and it will likely take years before production could begin. But by signaling intent now, the company is staking an early claim in what could become one of the most important resource markets of the next decade.
“American manufacturing shouldn’t rely on China or any foreign nation for essential minerals, and Cliffs intends to be part of the solution,” Goncalves said.
If the plan succeeds, Cleveland-Cliffs could transform from a traditional steel producer into a vertically integrated supplier of critical minerals for defense, electronics, and green energy. That kind of transformation could eventually merit a higher valuation multiple, similar to what happened when oil majors rebranded themselves as diversified “energy companies.”
But that transition will take time, and investors should recognize that rare earth mining is expensive, complex, and politically sensitive. The early stages are likely to burn cash, not generate it.
Chart: Cleveland-Cliffs’ Dual Path Forward
| Business Line | Current Status | Future Opportunity | Main Risks |
|---|---|---|---|
| Steel and Iron Ore | Core business; largest flat-rolled steel producer in North America | Steady demand from autos, infrastructure, and defense | Steel price cycles, input costs, global slowdown |
| Rare Earth Minerals | Exploration stage; Michigan and Minnesota deposits under review | U.S. strategic support for domestic supply chains | Long permitting timelines, high capital costs, uncertain yield |
(Source: Company filings and analyst estimates)
The Geopolitical Tailwind
Cleveland-Cliffs’ announcement comes as the Trump administration intensifies efforts to counter Beijing’s dominance in critical materials. Earlier this month, China began signaling new export controls on rare earths an escalation that could disrupt global supply chains.
In response, President Trump threatened to impose “massive tariffs” on China, calling Beijing’s actions “a sinister and hostile move.” The president suggested there was “no reason” to meet with Chinese President Xi Jinping until the rare earth dispute is addressed.
That context gives the Cleveland-Cliffs move additional importance. It is not merely a company trying to expand into a new market. It is a potential test case for America’s entire critical-minerals policy.
If the U.S. can find, process, and refine its own rare earths domestically, companies like Cliffs could become critical partners in reshaping global trade flows. Investors who understand the policy link may see early-stage opportunities before Wall Street fully prices in the strategic upside.
Steel Under Pressure, but Optionality Rising
Cleveland-Cliffs still faces headwinds in its core business. The company’s latest earnings report showed a quarterly loss even as revenues climbed. Iron-ore costs and weaker automotive demand continue to weigh on margins.
However, by entering the rare earth space, Cliffs introduces what analysts often call “optionality” a built-in opportunity for upside that does not depend entirely on steel market cycles.
The market noticed immediately. After the rare-earth announcement, shares of Cleveland-Cliffs surged by nearly 20 percent before pulling back. That kind of volatility signals investor enthusiasm but also skepticism about the company’s execution timeline.
For investors, the right approach may be patience. Treat the rare-earth opportunity as a long-term call option, not as a near-term catalyst.
Key Questions for Investors to Track
- Resource viability: Will Cliffs publish a formal geological report showing commercial-grade deposits of neodymium, praseodymium, or other high-value elements?
- Processing capability: Rare-earth mining is only part of the equation. Processing capacity is where China dominates. Will Cliffs invest in separation and refining, or partner with others?
- Capital allocation: How much of Cliffs’ balance sheet will go toward this venture, and will it impact steel-segment capex?
- Government incentives: Will federal or state grants help offset startup costs for domestic production?
- Timeline: When will investors get an updated feasibility study, pilot production plan, or target start date?
The answers to those questions will determine whether this becomes a meaningful new revenue stream or simply a strategic headline.
A Long Road from Idea to Production
Investors should keep in mind that rare earth production is not like opening another iron-ore pit. It involves complex extraction, separation, and environmental permitting. Even companies dedicated exclusively to rare earths, like MP Materials or Lynas Rare Earths, have faced years of delays and cost overruns.
Cleveland-Cliffs’ advantage lies in its existing mining experience, its ownership of land with potential deposits, and its relationships with policymakers eager to secure U.S. supply. But none of that guarantees profitability.
In the short term, the rare-earth plan will likely act as a narrative driver rather than an earnings driver.
America’s Resource Independence
Cleveland-Cliffs’ pivot comes amid a broader reshoring movement in U.S. industry. The Trump administration has pushed aggressively to localize the production of semiconductors, batteries, and critical materials.
Rare earth minerals are the next frontier in that effort. The stakes are high: without them, the country remains vulnerable to supply disruptions in every modern technology sector.
By exploring domestic rare earth opportunities, Cliffs joins a small but growing list of U.S. companies trying to reduce that dependency. Others include MP Materials, which operates the Mountain Pass mine in California, and Energy Fuels Inc., which processes rare earths at its White Mesa facility in Utah.
If more industrial players follow Cliffs’ lead, America could begin to chip away at China’s 80-percent dominance of global rare-earth processing.
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