Cleveland-Cliffs, Inc. (NYSE:CLF) third-quarter earnings call highlighted a new strategic direction: the company is actively exploring the potential of rare earth minerals within its mining operations.
The news sent shares surging, as investors took stock of Cleveland-Cliffs' move to diversify its resource base and possibly enter the high-value, geopolitically strategic market segment.
- CLF stock is climbing. See the real-time price action here.
Rare Earth Supply
The growing demand for rare earth elements, critical for advanced manufacturing, electronics and energy technologies, has put a spotlight on supply security in North America.
China recently announced sweeping export restrictions on rare earth elements and the Trump administration is accelerating efforts to boost U.S. strategic independence in critical minerals.
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These include direct equity stakes in American and allied rare earth mining firms, establishing a domestic strategic mineral reserve and the implementation of price floors to counteract Chinese market dominance.
Rare Earth Opportunity
Cleveland-Cliffs' CEO Lourenco Goncalves made it clear during the third-quarter earnings call that the company sees rare earths as both an "opportunity and as our responsibility."
"Comprehensive reviews of our ore bodies and tailings basins have identified two sites, one in Minnesota and one in Michigan, where geological surveys show evidence of rare earth mineralization. We continue to assess our potential on both sites, advancing this initiative with precision," Goncalves said.
"Cleveland-Cliffs is squarely within the nation’s pursuit of critical material self-sufficiency. We believe America's industrial foundation must never depend on China or any other foreign source for essential minerals. Cleveland-Cliffs is committed to contributing to our independence from foreign powers on critical materials," he added.
Investors are particularly interested in Cleveland-Cliffs' approach, as the company blends decades of mining expertise with a strong commitment to domestic supply chains.
Details are Scarce
However, when asked about potential production timelines and vertical integration, Goncalves responded vaguely.
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"We have the opportunity to develop the mining, assuming that all these original studies will play out as we expect and we'll go from there. It's very clear that the U.S. government is very quickly realizing the importance of having an industry for this type of minerals inside the borders of the United States."
Cleveland-Cliffs has yet to release specifics on which rare earth elements are present.
"We are working with geologists to assess whether these deposits could become commercially viable. That's where we're at… and we will see how we'll go from there. But that's a potential that we will not let go without putting a lot of effort and a lot of ingenuity into getting this done," Goncalves said.
Federal policy is increasingly focused on domestic sourcing of critical materials and Cleveland-Cliffs' exploration initiative could open the door for a new chapter in the company's history.
The announcement justifiably caught Wall Street's attention and CLF stock ended the session up 21.47% at $16.18 on Monday, according to data from Benzinga Pro.
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