Abstract: The construction of rare earth strategic reserve system needs to combine national reserve with commercial reserve, in which commercial reserve is the foundation.The economy of the rare earth reserve project is usually judged by the net present value (NPV).Taking into account the option of enterprises in the process of reserve decision-making, this paper analyzes the decision of commercial rare earth reserves with real options.First of all, the article calculates the critical point of the price of rare earth reserves, then, by analyzing the distribution characteristics of rare earth prices, it estimates the probability that the enterprise will abandon the rare earth reserves when it does not predict the future market too much.Finally, the empirical analysis is carried out by taking the decision of rare earth reserves as an example and compared with the net present value (NPV) decision method.The results show that:the introduction of real option theory may lead to different decision-making behavior; moderate market fluctuations can help enterprises to increase their reserves.