When the Market Vectors Rare Earth/Strategic Metals ETF (NYSEArca: REMX) debuted nearly three years ago, it appeared to be a case of impeccable timing. The ETF’s debut coincided with booming demand for electric vehicles, smartphones and tablets, all of which are made using some of the 17 rare earths elements.

The rare earths party was short-lived as REMX holdings such as Molycorp (NYSE: MCP), the largest U.S. rare earths miner, sank almost as quickly as they rose. China’s dominance over the rare earths export market (the country controls over 90% of global exports) and environmental challenges that go along with opening new rare earths mines sent shares of REMX and its holdings tumbling as rare earths buyers sought alternatives.

Early last year, Toyota said it could develop and bring to market hybrid and electric vehicles that don’t require expensive rare earth metals in two years if prices on the metals stay elevated. [Toyota May Pressure Rare Earths ETF]

The darkest clouds may have passed for the rare earths industry because REMX has been surging. REMX is nearly 15% over the past three months and 11.5% since being reverse split on July 1. [Rare Earths ETF Rallying in May]

While prices for rare earths have receded over the past two years, they still remain well above levels seen in 2010 and there could be room for more upside. The latest version of Apple’s (NasdaqGM: AAPL) iPhone sold nine million units in its debut weekend, prompting the company to raise its quarterly revenue guidance. That implies Apple suppliers could be upping their purchases of rare earths.

Although production costs have risen “mining companies are optimistic that they will continue to see demand for competitively priced Chinese rare earths given that labor is cheaper than in other producing countries, such as Australia,” reports Yue Li for the Wall Street Journal.