Title: Sprott's Rare Earth Ex-China ETF REXC | Steve Schoffstall and Jimmy Connor
Show: Jimmy Connor (YouTube)
Guest: Steve Schoffstall (Sprott Asset Management, ETF team); host Jimmy Connor
Date: 2026-07-18
URL: https://youtu.be/BFgSqzTnWcA
Length: 7:10
Note: YouTube auto-transcript; fillers (um/uh/you know) and stutters removed; wording otherwise verbatim. At 06:26 "REMX" is as spoken/captioned - almost certainly a slip for REXC (REMX is VanEck's Rare Earth/Strategic Metals ETF).

(00:00) Steve, thank you very much for joining us today. One of the most important issues facing governments around the world today is scarcity of supply of critical resources and this includes uranium, lithium, copper, and rare earth elements. And most people have heard of a lot of these commodities, but not too many people are familiar with rare earth elements, including myself.
(00:19) So, I want to start right here. What exactly are rare earth elements? >> Yeah, great question and one we get a lot. These are 17 chemically similar elements. They're considered a subsection of critical materials. So, if you think of critical materials as an umbrella term, rare earths fit underneath those.
(00:40) And despite their name, rare earths aren't actually rare. They're found all throughout the earth's crust. What makes them rare is that they're usually not found in concentrations that make mining them economically viable. So, as we'll talk about, they're used for a lot of different uses and becoming increasingly important in today's economy.
(00:57) >> And maybe you can just touch on some of the uses. >> Yeah, absolutely. Some of the big ones would be defense. So, anywhere where you're starting to see missile guidance systems or radar technology, they're used there. When we start thinking about technology, we see them used in AI data centers, whether it's in the motors that are helping keep the data centers cool.
(01:18) It's used in some optics, in consumer technology, we see it used in the display screens, whether it's TVs or the screen on your cell phone. A lot of times those colors are made possible by rare earths. Within your cell phone, the thing that actually makes it vibrate would be rare earth magnets.
(01:36) And then we also see uses in robotics and energy in the form of wind turbines. And we also see it used in EVs as well. That's typically refining rare earth magnets that are used in the motors. >> So, they're used in many things that we use on a day-to-day basis, but we're just totally oblivious to the fact.
(01:56) >> Yeah, that's exactly right. I think a lot of the uses we just take it for granted that rare earths are all around us and a lot of what we use in everyday life are made possible because they're present and readily available. >> So, one of the big issues that we've become aware of here in the last year or two years is the fact that China dominates so many aspects of the rare earth supply chain.
(02:21) Can you just speak to that? >> Yeah, this is a development that's happened now over the course of the last three decades or so. If you were to go back to the early and mid-1990s, the US was actually the leading producer of rare earths and through I guess I have to to China and growing out their economy, they were able to take control away of the rare earths industry.
(02:43) Today they now control about 69% of mining. If you look at refining and magnet production, you're now over 90% of the market is controlled by China. And what we've started to see now, and it's not the first time we've seen it, but they're starting to put export controls in place. And basically what that does is it makes it a little bit harder now for countries to gain access to these rare earths that are so critical to things like national and economic defense.
(03:10) And because of that, we're seeing a lot of western countries look outside of China and putting a lot of programs in place and a lot of investments in place to try to move that production and reshore it so that they don't have to worry about being at the whims of the Chinese government. >> And you're right.
(03:26) I'm glad you brought that up about the export restrictions because of this many of the prices associated with these rare earth elements are just going through the roof. A common one that's used, dysprosium, it's used in magnets, also referred to as DYTB. The price has gone from $100 a kilo up to $900 a kilo because of these restrictions.
(03:46) And this really speaks to the investment case for these rare earth elements. Now, you and your team at Sprott have developed a new ETF product which enables investors to invest in rare earth elements. Maybe you can just speak to that and tell us more about this new product. >> Yeah, absolutely. This is a strategy that we're really excited about.
(04:05) It's the Sprott Rare Earth X China ETF, ticker REXC or Rexy as we refer to it. This is the only ETF anywhere that is solely focused on providing rare earth exposure. There's plenty of ETFs out there that have some exposure to rare earth to different levels. Could be as low as 5 or 6%.
(04:26) Up into the teens or even high 20s. But this product focuses specifically on rare earth. And we bring our pure play strategy which is something that we've been known for. So we go through and we screen, we're at this point in screening about a thousand mining companies twice a year looking at the financials, understanding what they actually produce and what they're mining.
(04:48) Those and we're focusing on those companies that have at least 50% of their revenue tied to rare earth whether it's mining, smelting, some of the production elements of rare earth. And it's really allowed us to have a differentiated product. Not only is it an X China focused. So we think a lot of where we're seeing from the investment landscape is leading to opportunities outside of China as countries look to reshore and provide incentives to increase production particularly in western countries.
(05:18) But it's different from other existing ETF strategies which might market themselves as rare earth ETFs. But when you really start drilling down past just the name of the fund, what you'll see are usually very diversified strategies or strategies that are concentrated in other metals. To put in perspective, our strategy has about 96% exposure to rare earth.
(05:41) Other strategies like I said earlier could be the single digits. >> And how many companies are in the ETF? >> There's currently 34 companies in the ETF and when we break down the exposure, you're going to find about 48% of the exposure is from Australia, about 40% United States, and then another 8% or so in Canada.
(06:03) So, very much weighted to those three countries, about 95, 96% with some, when we start looking at the capital structure, large cap it's about 38%. We have about 16% or so in mid cap and the rest falling in that small cap range. >> And if somebody would like to learn more about Sprott and their new rare earth ETF, where can they go? >> They can head over to sprottetfs.com.
(06:26) So, they could go to the website there and view everything about REMX. We also have an inside section that we have on our website where we post monthly commentaries, video content as well for investors to learn more about critical materials, precious metals, and specifically rare earths. >> Steve, thank you very much for spending time with us today and sharing your thoughts.
(06:47) >> It's good to be back. Thanks, Jimmy.