Rare earths remained firmly in the spotlight throughout 2025, as rising geopolitical tensions heightened concerns over global supply.
This group of 17 elements is critical to a wide range of modern-day industries, including clean energy, electric vehicles, consumer electronics, and robotics.
However, supply remains highly concentrated with China accounting for around 60% of global rare earths production and more than 90% of refining capacity.
This market dominance has prompted some Western nations like the US to diversify supply chains and reduce reliance on China.
As a result, several ASX mining stocks with rare earths projects outside of China have surged this year.
For instance, Lynas Rare Earths Ltd (ASX: LYC) has been a strong performer with its share price soaring by 93% since the start of January.
The company operates the Mt Weld mine in Western Australia which is widely regarded as one of the most significant rare earths deposits in the world.
However, Lynas is not the only ASX rare earths stock attracting attention.
According to Australian financial advisory firm Bell Potter, another player could be poised for serious upside.
Image source: Getty Images
Bell Potter's view on rare earths
Bell Potter believes the tailwinds driving the rare earths boom in 2025 are likely to persist.
These include ongoing geopolitical tensions, US government investment in mining, and expanding separation and magnet manufacturing capacity.
That said, the broker cautioned that a wave of new supply could potentially enter the rare earths market in upcoming years.
As a result, Bell Potter's preference is for projects in the bottom quartile of the cost curve and relatively low capital and execution risk.
And the broker identified Verdis Mining and Minerals Ltd (ASX: VMM) as one such opportunity.
Economically significant project
Verdis is developing its Colossus rare earths project in Brazil, located within the geologically fertile Poços de Caldas rare earths complex.
Management considers Colossus to be amongst the most economically robust rare earths projects globally.
A recent economic assessment outlined a 20 year initial mine life and a modest two-year payback period for a potential mine at the project.
However, a subsequent reserve estimate hinted that production could possibly extend for up to 40 years.
Bell Potter noted that Colossus is progressing through initial permitting, with a Preliminary Licence (LP) awaiting final approval.
It added that the project has indicative debt support for the project from within Brazil, France, and Canada.
The broker also appears drawn to the project's potential for hosting dysprosium and terbium.
These two elements play a key role in high-performance magnets used in electric vehicles, wind turbines, and defence sector technology.
Bell Potter commented:
Once in production, we believe VMM will be one of the lowest operating cost rare earth projects globally, and a meaningful provider of heavy rare earth elements Dysprosium and Terbium (Dy + Tb).
Share price in focus for this ASX mining stock
Verdis shareholders have already enjoyed a standout year.
Overall, shares in this ASX mining stock have rocketed by 184% since the start of January.
This compares with a 5.4% rise for the S&P/ASX All Ordinaries Index (ASX: XAO) across the same period.
However, Bell Potter believes this powerful rally could have plenty of fuel left in the tank.
The broker has assigned a speculative buy rating and set a price target of $2.65 per share for this ASX mining stock.
This represents potential upside of 165% from Monday's closing price of $1.00 per share.
