Lithium may dominate the headlines, but it's no longer the most interesting story in critical minerals. A quieter rally is building—one driven by AI demand, defense needs, and tightening supply. And this time, the action is shifting to minerals most investors barely track.

Rare Earths Step Into The Spotlight

"The biggest moves are in rare earths and key strategic minerals," Harvey Kaye, Executive Chairman of U.S. Critical Materials, told Benzinga exclusively in an email interview.

That includes lesser-known names like dysprosium, terbium, praseodymium, yttrium, and gallium—materials increasingly critical across EVs, advanced manufacturing, and defense systems.

The setup is simple but powerful. "Supply is tight and demand is strong," Kaye said, adding that "even small disruptions push prices up quickly."

Unlike lithium, where new supply has eased prices at times, rare earths remain structurally constrained—both in mining and, more importantly, processing.

This is potentially good news for investors in the VanEck Rare Earth and Strategic Metals ETF (NYSE:REMX), the Global X Rare Earth & Critical Materials ETF (NASDAQ:EART) and the Sprott Critical Materials ETF (NASDAQ:SETM).

AI Demand Is Changing The Equation

The next leg of demand isn't just EVs—it's AI.

"AI uses more minerals than most people realize," Kaye noted. From gallium in semiconductors to metals used in data center infrastructure, the footprint is expanding fast. And the kicker: "there are very few substitutes for these minerals."

That makes the market more sensitive to shocks—and faster to reprice.

Read Also: Nvidia's Biggest Risk Could Be A Mineral Nobody Has Heard Of

China's Grip Tightens The Supply Chain

On the supply side, concentration remains the key risk.

"China controls much of the global processing capacity," Kaye said, leaving markets exposed to disruptions. Add rising energy costs—where "energy touches every step of the supply chain"—and the pressure builds.

The takeaway is shifting.

Lithium may have built the narrative, but it's these lesser-known, tightly supplied minerals that are increasingly driving the next phase of the trade.

Image via Shutterstock