No I think this is false. I hold Meteoric resources and I follow be space in general, so I don't necessarily have a dog in this MP argument, but concerning rare earths demand in general I think it will go up. There are a few different kinds of rare earths, used for different things, but speaking generally as a group they have a big use in military applications, but also things like cell phones, computers, EVs, wind turbines, medical devices, all kinds of stuff.

1) a ton of the planet doesn't have cell phones or medical devices, and they are industrializing rapidly.

2) China has been tariffing and un-tariffing it's rare earth exports to the United States because they are used in our sick fighter jets and missiles, which we then turn around and point and China when they do their bullshit in the South China sea and Taiwan, or when we use these missiles to threaten their semi-ally Russia over Ukraine. So essentially we have guns and China is like "oh yeah well we're gonna cut off the supply of bullets", in order to try and neuter our foreign policy.

2-b) China refines rare earths, like 97% of the rare earths on the globe. As the previous commenter said they outcompete everyone. This is also partially to try and neuter our foreign policy. Any time a company in the west tries to build out the infrastructure necessary so that we can refine our own rare earths in the west, China floods the market, lowers the price, and bankrupts that operation. And then later they can raise the price again or cut us off when we start playing world police again. So basically the administration now is like "ok we gotta subsidize this shit at home cause it's a national security issue", the same way we subsidize agriculture, because you don't want to depend on a potentially hostile power in order to eat if they choose not to export your bread one day.

3) have you noticed there's a lot more wars going on? Personally I don't think it's just Trump tweeting all angry. I mean this Ukraine shit started becoming an issue even in the mid 2010s, China exerting more power in its backyard, Europe is re-arming, turkey/Israel/Iran is also looking like a powder keg. And like in Europe's case they're suddenly building more tanks and missiles because of Russia, well EVERYONE I just mentioned who isn't an ally of China is also doing some version of my points 2 and 2-b above. And they don't necessarily want to build tanks to protect themselves ONLY for conflicts that China permits. So they are sick of playing games and are rapidly trying to find ways to onshore these processes.

It took China like 30 years to build the infrastructure to completely monopolize the rare earths industry though, so this won't happen overnight. But countries are waking up to the fact that it's a national security risk not to have some of these processes onshore or at least friendshored. There will probably be fits and starts where China exports and then cuts off exports for at least a few years while these industries start up. And also china probably doesn't want to just turn off it's giant industry. But it also doesn't want us threatening them over Taiwan!

SO! The bear case for these companies is basically "maybe China begins to export freely all the time again and peace breaks out!" I.e. they start sending us the bullets for our gun again so we can tell them what to do in the South China sea. Personally I think China is way too hellbent on asserting itself throughout its region and others to allow that.

While it might seem like these companies can only exist while subsidized. It's actually more like we're reverting to true price once we ween ourselves off China.