Critical minerals are at the heart of geopolitical tensions right now. China recently implemented new restrictions on its exports of rare earth minerals. The move squeezes the U.S. and other nations on the global supply of critical minerals.
U.S.-based miner NioCorp Developments (NB +0.41%) might have an answer to China's dominance surrounding rare earth minerals. After the company had a sharp pullback in recent days, investors might consider whether NioCorp is a good way to play the critical minerals revolution. It also has a surprise artificial intelligence (AI) angle.
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Could NioCorp be a stealth AI play too?
NioCorp is working to develop the Elk Creek Project. The Nebraska development-stage property has revealed niobium, scandium, and titanium reserves. Those are all critical minerals. Niobium is an element that, when added to steel, enhances its strength, lowers weight, and improves its corrosion resistance. Niobium-based alloys are used in energy pipelines, jet engines, rockets, and automotive components.
Scandium similarly is a high-strength alloy for aluminum, also used for aerospace and automotive applications, and as a component in solid oxide fuel cells. That's where NioCorp could play a role in powering AI data centers. Bloom Energy recently announced a new partnership with Brookfield Asset Management to use its fuel cell technology to power AI data centers at scale.
Elk Creek's rare earth mineral resource disclosure is noteworthy. The U.S. currently relies entirely on foreign sources for niobium and scandium. Additionally, the development of next-generation solid-state lithium-ion batteries, such as those by QuantumScape, also involves niobium. The U.S. Navy's F-35 Lightning II fighter jet uses all the critical minerals NioCorp plans to produce in the project.
NASDAQ: NB
Key Data Points
All of that puts NioCorp in an interesting and enviable position. Some investors have noticed; NioCorp stock has rocketed higher by nearly 450% this year, even after a recent 30% slide. If the pullback continues, though, this speculative rare earth minerals and AI stock might be one to own.
