NioCorp Developments (NB): A High-Risk, High-Reward Play in the Rare Earths Market?

The global demand for rare earth elements is skyrocketing, driven by the proliferation of electric vehicles (EVs), renewable energy technologies, and advanced electronics. As governments worldwide scramble to secure reliable supply chains, companies like NioCorp Developments (NB) are emerging as potential key players. But is NioCorp a golden ticket to the rare earths boom, or a high-stakes gamble?

The Allure of Rare Earths and Critical Minerals

Rare earth elements (REEs) are a set of 17 metallic elements essential for various modern technologies. They are used in permanent magnets, catalytic materials, luminescent materials, polishing materials, and hydrogen storage materials. The automotive industry relies on REEs like neodymium, lanthanum, cerium, praseodymium, yttrium, and dysprosium for manufacturing magnets and catalysts.

The rare earth minerals market is projected to reach $6.28 billion by 2030, growing at a CAGR of 8.6% from 2025. This growth is fueled by the rising shift towards clean energy and the increasing use of consumer electronics. However, the market is heavily concentrated, with China dominating production and processing. In 2024, China held over 58.3% of the market share.

This dependence on a single nation has spurred initiatives in the United States and other countries to develop domestic rare earth element production. The U.S. government has invested over $28 million in REE and critical mineral processing projects to strengthen domestic capabilities.

NioCorp: A U.S.-Based Hope for Critical Minerals

NioCorp Developments Ltd. is a mineral exploration and development company focused on the Elk Creek Project in Nebraska. This project aims to produce niobium, scandium, and titanium, all designated as critical minerals. NioCorp is also exploring the potential to add magnetic rare earth oxides to its product suite.

The Elk Creek Project is fully permitted for construction and is strategically located in a geologically stable region with existing infrastructure. NioCorp has secured the necessary land parcels to support construction. The project has the potential to create a local supply chain for strategic commodities, reducing U.S. reliance on foreign sources.

The Elk Creek Project: Potential and Progress

The Elk Creek Project’s 2022 Feasibility Study projects robust economic performance, including a pre-tax net present value (NPV) of $2.82 billion and an after-tax NPV of $2.35 billion. The pre-tax internal rate of return (IRR) is estimated at 29.2%, and the after-tax IRR at 27.6%.

NioCorp has made significant progress in advancing the Elk Creek Project:

Financing: NioCorp is seeking up to $800 million in debt financing supported by the U.S. Export-Import Bank (EXIM). The company has also raised capital through public offerings, including a $60 million offering in September 2025.
Government Support: The U.S. government has designated three minerals contained in NioCorp’s mineral resource as among the most vital to U.S. national and economic security. The Department of Defense (DoD) has awarded up to $10 million to NioCorp’s subsidiary, Elk Creek Resources Corp., to establish a domestic scandium supply chain.
Land Acquisition: NioCorp has completed the acquisition of land parcels necessary for the Elk Creek Project’s development.

The High-Risk, High-Reward Equation

Investing in NioCorp Developments is not without risks. The company is in the development stage and has not yet generated revenue. NioCorp reported a fiscal year loss of $16.7 million. The company’s profitability is tied to the fluctuating prices of niobium, scandium, and titanium.

Developing the Elk Creek Project requires substantial capital, and any delays in securing funding or cost overruns could impact timelines and financial stability. Mining projects are subject to stringent environmental regulations, which may delay or increase project costs. NioCorp faces competition from established global players in niobium and titanium production.

Analyst Outlook

Analysts have mixed views on NioCorp’s stock. The consensus rating is “Hold,” based on ratings from Wall Street analysts. The average 12-month price target for NioCorp Developments is $6.63.

The Investor’s Perspective

NioCorp Developments presents a compelling, albeit risky, opportunity for investors seeking exposure to the rare earths and critical minerals market. The company’s Elk Creek Project has the potential to become a significant domestic source of niobium, scandium, and titanium, reducing U.S. reliance on foreign suppliers.

However, investors should be aware of the risks associated with development-stage mining companies, including financing challenges, regulatory hurdles, and commodity price volatility. NioCorp may be suitable for investors with a high-risk tolerance and a long-term investment horizon.

The Geopolitical Angle

The geopolitical landscape significantly influences the rare earths market. China’s dominance in production and processing has raised concerns about supply chain security. Trade tensions between the U.S. and China have further highlighted the need for domestic sources of critical minerals.

NioCorp’s Elk Creek Project aligns with the U.S. government’s strategy to secure domestic supply chains for critical minerals. Government support and strategic partnerships could provide a significant boost to NioCorp’s prospects.

Conclusion: A Speculative Buy with Strategic Potential

NioCorp Developments is a speculative buy, offering high strategic potential but substantial volatility and risk. The company’s success hinges on its ability to secure financing, navigate regulatory hurdles, and bring its products to market. Investors should closely monitor developments around financing, project milestones, and government support as key indicators of future performance.

While the risks are undeniable, the potential rewards could be substantial if NioCorp successfully executes its Elk Creek Project and capitalizes on the growing demand for rare earths and critical minerals.

Disclaimer: This blog post is for informational purposes only and does not constitute financial advice. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.