Asian rare earth stocks extended gains as escalating US-China tensions reignited investor interest in strategic minerals.

Shares of Iluka Resources Ltd. and Arafura Rare Earths Ltd. soared more than 23% in Australia on Tuesday, while Lynas Rare Earths Ltd. jumped as much as 8.4%. Stocks in the sector were among best performers on the benchmark S&P/ASX 200 Index, building on their advances from the previous session. US peers also surged on Monday.

The rally came after Beijing expanded export restrictions on certain rare earth minerals, boosting bets on alternative suppliers. Rare earth stocks have climbed since April, when China threatened potential disruptions to global supply chains by imposing export controls on seven key rare earth elements and related products.

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