Laos has high potential for rare earth elements development, but the economy suffers from several challenges at the national and firm levels related with rare earth elements development. There has also been no systematic study on the development of rare earth elements in Laos. Therefore, the objective of this chapter is to conduct a situational analysis of the mineral sector in Laos and analyze the policies to promote the investment in the reserves of rare earth elements supply chain. Laos has ample rare earth development potential, but most of the rare earths’ development investments originate from China. Laos has not made any refineries or semi-products. Investment in rare earths does not have much positive spillover effects on the economy or the supply chain. Diversifying foreign direct investment in the mineral sectors and rare earth elements is essential. Enhancing policy and the corporate environment to promote diversification is necessary. It is also essentially important to promote public–private partnerships or joint ventures involving foreign direct investment and domestic enterprises and establishing a hub for electric vehicle battery manufacturing in Laos. The government also should not overlook the advancement of human resources and technical expertise in the minerals development sector.