• U.S. rare earth production surged from 4,300 to 8,900 metric tons in 2025, but import reliance rose to 67% despite domestic gains, signaling continued fragility.
• Heavy rare earths like dysprosium and terbium remain 100% import-dependent with no commercial-scale U.S. production, creating a strategic bottleneck for defense and EV applications.
• Record concentrate production of 51,000 metric tons masks the real challenge: downstream separation, metal-making, and magnet manufacturing capacity remain critically underdeveloped.

The U.S. rare earth story is finally moving in the right direction, and the latest U.S. Geological Survey (USGS) Mineral Commodity Summaries 2026 data (opens in a new tab) reinforce that. But the same tables also deliver a sobering message for investors and policymakers: the U.S. is building capacity—not yet command. The headline numbers look encouraging, yet the most strategic segments of the supply chain remain thin, import-exposed, and vulnerable to shocks. Note American treasure trove MP Materials is producing the vast bulk of the output as of the end of 2025.

What the USGS Numbers Say—and What They Don’t

USGS reports a sharp jump in U.S. production of rare-earth compounds and metals (expressed in rare-earth oxide equivalent) from 4,300 metric tons in 2024 to an estimated 8,900 metric tons in 2025. That is meaningful progress. It reflects years of capital, permitting, and operational learning, finally showing up in national statistics.

But investors should avoid a common translation error: “compounds and metals (REO equivalent)” does not automatically mean full-spectrum, separated, market-ready oxides across the board. It can include mixed or intermediate chemical forms reported as REO-equivalent for consistency. Treating the figure as proof of complete refining independence overstates what the data can support.

Import Reliance Fell—Then Rose Again

Another misunderstood talking point is “import reliance was cut in half.”  Directionally, yes: net import reliance fell from over 90% in 2023 to 53% in 2024, then rose to 67% in 2025, even as domestic output increased. That reversal matters. It suggests the system is still fragile, dependent on trade flows, and not yet structurally de-risked.

USGS also flags a major blind spot: rare earths embedded in imported finished goods—motors, magnets, electronics—can make headline import metrics look safer than real exposure.

The Hard Wall: Heavy Rare Earths

Here is the strategic cliff: heavy rare earths remain 100% net import reliant. USGS indicates that while minerals containing heavy rare-earth elements may be mined domestically, there was no sustained commercial-scale production of heavy rare-earth compounds or metals in 2025. That’s the choke point. Dysprosium and terbium are essential for high-coercivity magnets used in defense systems, drones, EV drivetrains, and industrial motors. Progress on light rare earths does not substitute for this gap.

Concentrate Records Aren’t the Finish Line

The USGS also reports a record mineral concentrate production of 51,000 metric tons of REO in 2025 (up from 45,500 in 2024). That’s real momentum—upstream. But strategic leverage comes downstream: separation, metal-making, alloying, magnet qualification, and manufacturing at scale. Those layers remain the U.S. bottleneck—especially for heavies.

A Reality Check from the Ore Body

In background discussions, one major U.S. producer, our American treasure trove MP Materials,  has emphasized a blunt truth: the ore body drives the mix. Roughly ~80%+ of many concentrates can be cerium and lanthanum—high-volume but low-value products in persistent oversupply—while NdPr is the economic engine. MP Materials sells NdPr oxide (not separated Nd and Pr), because most modern magnet recipes accept NdPr oxide and the natural Nd:Pr ratio typically fits market specs. On heavies, as _Rare Earth Exchanges_™ has pointed out, the company’s SEG+ stream includes ~4% dysprosium and terbium on a total rare earth oxide basis—small by percentage, meaningful by absolute volume when paired with high head grade and third-party feedstocks.  See the company’s literature (opens in a new tab).

REEx Take

The USGS data support optimism—but only disciplined optimism. The U.S. is building a foundation it did not have five years ago. But use of the word “de-risked” is still premature. Embedded imports mask real exposure. Heavy rare earths remain the strategic cliff. And downstream capability—not concentrate tonnage—will decide whether America’s rare earth comeback becomes durable.

See the latest USGS report (opens in a new tab).

• Brazil's Serra Verde secured $565M DFC financing to expand its Pela Ema ionic clay project from 5,000 to 6,500 tpa TREO capacity, with a U.S. government equity option included.
• Serra Verde ended long-term Chinese offtake agreements in December 2025, joining MP Materials in reducing dependence on Shenghe Resources and pivoting to Western buyers.
• The project represents a rare Western de-risking win: already in commercial production with heavy rare earths (Dy, Tb, Y) critical for defense and EVs, outside Chinese control.

Brazil’s Serra Verde (opens in a new tab) has crossed a strategic threshold that many Western rare-earth projects never reach: commercial production, sovereign-backed financing, and a clean exit from long-dated Chinese offtake. This week, the U.S. International Development Finance Corporation (DFC) (opens in a new tab) confirmed a $565 million financing package for Serra Verde’s Pela Ema ionic clay project in Goiás, Brazil, including an option for the U.S. government to acquire an equity stake. Proceeds will refinance existing loans and fund Phase I optimization and expansion, lifting total rare earth oxide (TREO) capacity from 5,000 tpa to ~6,500 tpa by end-2027. Pela Ema entered commercial production in 2024.

Why This Deal Matters

This is not a greenfield promise. Pela Ema (opens in a new tab) already produces mixed rare earth carbonate (MREC) enriched in dysprosium (Dy), terbium (Tb), and yttrium (Y)—critical inputs for defense systems, EV traction motors, wind turbines, and advanced electronics. Ionic clay deposits are typically lower grade than hard-rock peers, but they offer faster ramp-up, simpler metallurgy, and steadier operating profiles—attributes increasingly prized by Western buyers seeking reliability over theoretical peak output.

From China to the Western Stack

The most consequential signal predates the financing. In December 2025, Serra Verde renegotiated and dramatically shortened its Chinese offtake agreements—originally expected to run roughly a decade—so that they now expire at the end of 2026. That move places Serra Verde alongside MP Materials (and more recently VHM Ltd) in stepping away from long-term dependence on Shenghe Resources. Over the past year, that shift has become a defining pattern as Western capital offers more attractive financing and faster downstream alignment.

What the U.S. Gets

For Washington, this is near-term leverage, not a ten-year option. Serra Verde delivers existing, scalable heavy rare earth supply outside China—precisely where U.S. vulnerabilities are most acute. With Chinese offtake ending this year, industry expectations are that new offtake agreements will be signed in 2026, likely with U.S. buyers or with processors in jurisdictions that already host separation capacity (e.g., Malaysia, Australia, Estonia, France).

Context: China Still Moves the Board

The backdrop underscores the stakes. Even as Western-backed projects consolidate, Shenghe finalized its acquisition of Peak Rare Earths and the Ngualla project in Tanzania in September 2025—a reminder that China continues to lock up upstream optionality even as some downstream contracts unwind.

REEx Take

This is what a credible rare-earth “de-risking” win looks like: producing asset, heavy rare earth mix, shortened China exposure, and Western capital with optional equity. Serra Verde won’t end China’s dominance—but it meaningfully narrows the gap where it matters most.

• Commerce Secretary Howard Lutnick says China is weaponizing control over rare earths and critical minerals.
• The Trump administration plans to counter through tariffs, stockpiles, and industrial policy, but execution risk and capacity gaps remain substantial.
• China's dominance in rare earth processing and magnet manufacturing accounts for 85-90% of global capacity, creating real chokepoints not at mines but in refining, metallurgy, and component manufacturing.
• U.S. policy still underweights investment in these areas.
• Despite renewed urgency, the administration lacks the industrial policy depth needed for supply-chain resilience within five years.
• Missing elements include price floors, downstream enforcement, workforce development, and a unified allied approach with Canada and traditional partners.

Commerce Secretary Howard Lutnick says China is “weaponizing” its control over rare earths and other strategic materials—and that the Trump administration intends to fight back with tariffs, pricing power, and industrial policy. Speaking at a Center for Strategic and International Studies (CSIS) forum, Lutnick tied rare earths, semiconductors, and advanced manufacturing into a single national-security narrative. Put simply, the U.S. believes China can choke off key materials, and Washington wants domestic and allied supply chains fast.

Howard Lutnick, Secretary of Commerce

That framing resonates because it reflects real vulnerabilities as Rare Earth Exchanges™ has chronicled since our launch in late 2024. China has repeatedly tightened export controls on rare earth elements and permanent magnets, materials essential for EVs, wind turbines, missiles, and AI infrastructure. When Beijing restricts supply, prices spike, projects stall, and Western manufacturers scramble.

The Part That Rings True: Chokepoints Are Real

China’s dominance in rare earth separation and magnet manufacturing is not theoretical. It controls roughly 85–90% of global magnet processing capacity and has proven willing to use administrative tools—licenses, quotas, inspections—as leverage. Lutnick’s emphasis on “chokepoints” aligns with how supply chains actually break: not at the mine, but in refining, metallurgy, and component manufacturing.

His reference to gallium and yttrium is also directionally correct. Advanced semiconductors and defense systems depend on a complex bill of materials. Mining without processing is strategy theater, not security.

The Leap of Faith: From Rhetoric to Capacity

Where the story via The Washington Times (opens in a new tab) stretches is scale and speed. Achieving a 40% share of leading-edge semiconductor production within three years is an ambition, not a forecast. Similarly, a “business-focused” critical mineral stockpile sounds decisive but raises unanswered questions: volumes, pricing discipline, domestic processing requirements, and governance.

Stockpiles stabilize shocks; they do not replace mines, refineries, or trained metallurgists. Without parallel investment in separation plants and magnet factories, stockpiling risks becoming an expensive pause button. While the administration has demonstrated a commitment to the rare earth element and critical mineral supply chain in America, we are not doing nearly enough.

Reading Between the Lines

The Washington Times piece takes a clear national-security lens and largely accepts the administration's claims at face value. What it underplays is execution risk—and the history of U.S. critical minerals policy announcing urgency faster than it builds capacity.

Despite renewed urgency—signaled by this week’s critical minerals meeting in Washington—the Trump administration has not yet assembled the level of industrial policy required to achieve rare earth and critical mineral supply-chain resilience within five years, let alone several. The strategy still overweights mine permitting and approvals, mistaking mining speed for supply-chain speed, while the real chokepoints (despite the sustained need for myriad feedstock) remain midstream processing, magnet manufacturing, pricing discipline, and skilled labor—areas where China retains dominance.

Price signals that would unlock capital, such as standardized price floors or long-term offtake guarantees, remain politically uncomfortable and inconsistently applied. Stockpiles are being positioned as sa trategy rather than insurance, buying time but not building capacity.

Downstream requirements are weakly enforced, allowing value and know-how to leak offshore. And workforce realities—chemical engineers, metallurgists, and plant operators—are largely absent from policy design. Most critically, while the administration has begun convening discussions, it has not yet forged the unified trading-bloc approach necessary for success: traditional allies, especially the likes of Canada, must be joined at the hip in a coordinated industrial policy spanning mining, processing, pricing, and manufacturing. Without that allied alignment, three-year resilience remains an aspiration—not an executable supply chain.

What’s notable: Rare earths are no longer a niche mining story. They are now spoken of in the same breath as chips, tariffs, and GDP. That rhetorical elevation matters—but investors should track concrete assets, not speeches, and we must collectively understand the need for a profound shift in our approach.  President Trump, to his credit, is starting to get it.  But we have a steep climb ahead and few dare utter this publicly in Washington DC.

Source: The Washington Times, Feb. 5, 2026

• Orion Critical Mineral Consortium proposes acquiring 40% of Glencore's Mutanda and KCC operations in DRC, valued at approximately $9 billion, securing U.S. access to copper and cobalt without operational control.
• The two mines produced 247.8 kt of copper and 33.5 kt of cobalt in 2025, representing strategic leverage over DRC's 70% share of global cobalt supply through offtake rights rather than ownership.
• Orion CMC's $1.8 billion platform, backed by U.S. DFC and ADQ, signals a shift in industrial policy—deploying equity stakes and contractual control to rewire critical mineral supply chains.

Glencore (opens in a new tab) and the Orion Critical Mineral Consortium (opens in a new tab) have entered into a non-binding Memorandum of Understanding that could materially reshape Western access to copper and cobalt from Central Africa.

Under the proposal, Orion CMC would acquire a 40% stake in Glencore’s interests in MutandaMining (opens in a new tab) and KamotoCopper Company (opens in a new tab), implying a combined enterprise value of approximately $9 billion. The United States is moving closer to the source of critical minerals—not by nationalizing assets, but by buying influence and offtake rights.

What’s Firm—and What’s Still Contingent

Established facts:

• The MoU is explicitly non-binding and subject to due diligence, definitive documentation, and regulatory approvals.
• Orion CMC would gain non-executive board representation and the right to directits proportional share of production to nominated buyers, consistentwith the U.S.–DRC Strategic Partnership Agreement.
• Operational control remains with Glencore, preserving continuity and existing management systems.

Still unresolved:

• Final valuation mechanics, governance details, and transaction timing.
• Any increase beyond the proposed 40% interest.

This distinction matters. Investors should treat the announcement as strategic intent, not execution.

Why These Assets Matter

Mutanda and KCC are not peripheral holdings. In 2025, the two operations produced a combined ~247.8 kt of copper and ~33.5 kt of cobalt, placing them among the most consequential copper–cobalt complexes outside China.

Cobalt is the strategic fulcrum. The Democratic Republic of Congo supplies roughly 70% of global cobalt, and Glencore remains the largest Western producer. By securing offtake influence rather than operating control, Washington is pursuing a capital-light, leverage-heavy approach—anchoring supply without assuming mine-operator risk.

Power Without a Flag

Orion CMC—established in October 2025 and led by Orion Resource Partners, with participation from the U.S. International Development Finance Corporation—signals a shift in industrial policy tools. Rather than relying on subsidies alone, the U.S. is deploying equity stakes, governance rights, and contractual offtake control.

This reflects a broader pattern: sovereignty through contracts and capital, not flags and ownership.

REEx Takeaway

A big, exciting deal, but of course, there is execution risk. The proposal signals seriousness and scale, yet its impact depends on closing conditions and long-term discipline.

If consummated, the transaction would strengthen U.S. and allied access to copper and cobalt while reinforcing Glencore’s position as the West’s anchor producer in the DRC. It is not a rare earth story. It is a critical-minerals power play—and a template worth watching.

Investor Profile

OrionCritical Mineral Consortium (Orion CMC) was formed in October 2025 as a $1.8 billion, U.S.-backed investment platform designed to strengthen American economic competitiveness and national security by securing critical mineral supply chains. Led by Orion Resource Partners in partnership with the U.S. International Development Finance Corporation, and supported by matching capital from ADQ (state-owned sovereign investment and holding company of the Government of Abu Dhabi) the consortium brings together government-backed capital and private-sector mining expertise. With an initial $1.8 billion committed and a stated target of $5 billion, Orion CMC is structured to mobilize capital rapidly into critical minerals that underpin advanced manufacturing, defense, energy transition, data centers, and AI infrastructure.

Strategically, Orion CMC prioritizes existing or near-term producing assets over long-dated frontier exploration, aiming to close the gap between geopolitical urgency and industrial timelines. The consortium focuses on investing in mining and processing assets, managing offtake, developing domestic and allied-country processing capacity, and scaling cost-effective mineral technologies across emerging and established markets.

Positioned as a bridge between resource-rich jurisdictions and Western industrial demand, Orion CMC represents a shift toward sovereignty through capital, governance, and offtake control, rather than state ownership—marking one of the most consequential public–private efforts to rewire critical mineral supply chains in favor of the United States and its allies.

Source: Glencore / Orion CMC joint announcement, 3 Feb 2026.

• Trump administration unveils FORGE (Forum on Resource Geostrategic Engagement) framework at Critical Minerals Ministerial, proposing reference prices and preferential trade zone to prevent market whiplash that kills long-cycle mining projects.
• 55 countries representing two-thirds of global GDP attended, with Japan emphasizing need for multinational coordination across mining, refining, and processing to reduce China's supply chain dominance.
• Initiative pairs with Project Vault's $12 billion strategic stockpile and targets identifying priority projects within six months.
• Blending diplomacy, trade alignment, and development finance to build allied minerals resilience.

The Trump administration used today’s inaugural Critical Minerals Ministerial at the U.S. Department of State to push the conversation markets have been demanding: less diagnosis, more design—a pro-allies, pro-investment effort aimed at reducing single-point dependencies across mining, processing, and downstream manufacturing.

Marco Rubio, U.S. Secretary of State

In opening remarks, Secretary of State Marco Rubio cast critical minerals as a pillar of both economic security and national security, underscoring that concentrated supply has become a geopolitical lever. Vice President JD Vance sharpened the message: in a world of AI, electrification, and defense modernization, economies still run on “real things,” and critical minerals are now as foundational as energy.

A “FORGE” Moment: From Shared Concern to Shared Market Design

The headline proposal—covered by Reuters and E&E News/Politico as well as Rare Earth Exchanges™ earlier—is a U.S.-led framework dubbed FORGE (Forum on Resource Geostrategic Engagement) paired with a preferential trade zone concept for critical minerals. The mechanism at the center of the plan: reference prices at each stage of production that would function as a price floor, maintained through adjustable tariffs to uphold “pricing integrity” inside the zone.

The intent is straightforward: reduce the market whiplash that repeatedly kills long-cycle projects right at the financing gate—when a sudden supply surge collapses prices, capital evaporates, and projects “die on the vine.” As reported, the administration is also seeking a nonbinding agreement that calls on signatories to identify and support priority projects within six months.

Investor lens: this is a policy attempting to underwrite predictability, not by replacing markets, but by making it harder for strategic oversupply to detonate Western investment cycles. It’s a meaningful evolution from broad partnership language toward explicit market structure—and that shift matters.

Allies Signal Alignment—Japan Sets the Tone

The room itself was a signal: With 55 countries attending, participants represented close to two-thirds of global GDP. Japan’s State Minister for Foreign Affairs Horii Iwao reinforced the cooperative posture, stressing that no single country can solve concentration risk alone—and highlighting the need to diversify not only mining, but also refining and processing, where bottlenecks are most acute.  Rare Earth Exchanges has been reporting since our launch in 2024 the need for multinational orchestration and alignment.

The administration’s senior supply-chain messaging kept returning to a single thesis: demand growth is structural, not cyclical—an AI-era expansion pulling everything from copper and cobalt to rare earths deeper into national strategy. The pie is expanding; coordination determines who captures value across the stack.

Project Vault and the “Finance + Diplomacy” Flywheel

Today’s Ministerial also landed in the slipstream of Project Vault, the administration’s newly announced $12 billion strategic stockpile initiative—reported as backed by $10 billion from the U.S. Export-Import Bank and $2 billion in private funding. The broader push now blends diplomacy, trade alignment, development finance, and stockpiling—an unusually muscular toolkit in modern U.S. industrial policy, calibrated to an unusually concentrated dependency problem.

Big Ambition, Real Execution Questions

Coverage was broadly positive on intent—and candid about the hard parts. From E&E News/Politico to Reuters’ reporting, the administration’s call for more than 50 countries to engage, while noting pockets of ally skepticism and the challenge of translating a trade-zone concept into durable rules. Media are emphasizing both the scale of the ambition and the market sensitivity: shares of several mineral-linked companies fell on the news, a reminder that even pro-investment policy signals can introduce near-term uncertainty when pricing mechanics are in play.

Industry Applause: ReElement Technologies Backs the Direction

In a statement provided to Rare Earth Exchanges, ReElement Technologies (opens in a new tab) applauded the Trump administration and Secretary Rubio for convening the Ministerial and endorsed the State Department’s view that strengthening supply chains with international partners is vital for U.S. economic security, technological leadership, and resilience.

ReElement represents a vital midstream refiner and recycler bridging feedstocks and high-purity end users across defense, magnets, batteries, and energy technologies—emphasizing a multi-sourced strategy spanning virgin ore and recycled content, and citing expanding domestic production plans.

Other key midstream players include Energy Fuels (opens in a new tab) and MP Materials’ (opens in a new tab) effort to ramp up and scale the entire supply chain. USA Rare Earth (opens in a new tab) just secured an unprecedented financing package. Disruptive players such as Ionic Minerals Technologies, (opens in a new tab) based in Rare Earth Exchanges’ home state of Utah, are also rampingup critical mineral refining capacity.

 REEx notes these are company statements and forward-looking claims, but they align with what policymakers are trying to catalyze: scalable, qualification-grade capacity in the “missing middle” between mines and manufacturing. 

So ReElement’s mission to become a mid-market and defense refinery, along with MP and the others, represent a major national security interest. Failure is not an option.

REEx Takeaway

Todayfelt less like a panel and more like a platform launch: a bid to align allies around rules, financing pathways, and price stability so projects can actually clear investment committees—and survive the inevitable cycles.

Rare Earth Exchanges remains objective and cautiously optimistic.

At the end of the day implementation details will decide outcomes: definitions, enforcement, membership terms, and how “reference pricing” interacts with trade law and domestic politics. But as a strategic signal, today was unmistakable: the administration is aiming to build an allied minerals system designed to reward production, resilience, and long-term investment—not fragility.

Rare Earth Exchanges reminds all that China only gave the USA a one-year reprieve with access to key critical rare earth elements. And time is ticking. So the move by the Trump administration is overall an important one.

• USA Rare Earth secured an unprecedented $1.6B non-binding CHIPS Act framework plus $1.5B PIPE, totaling $3.1B.
• Unlike MP Materials' price-protected structure, it includes no price floors, no guaranteed offtake, and milestone-gated clawback provisions that leave execution risk entirely with shareholders.
• Round Top's ultra-low grade geology (~638 ppm total REE, ~160-200 ppm high-value content) creates a fundamental unit economics challenge where plausible revenue per ton ($12-$15) struggles against all-in processing costs (~$25/ton), making this a chemistry bet amplified by scale rather than a conventional mining play.
• Government equity and warrants (~8-16% dilution) remain permanent even if funding stalls or is clawed back—an asymmetric structure that persists regardless of capital delivery.
• The company must still satisfy complex prerequisites including semiconductor MOUs, NdPr agreements, nuclear licensing, and $250M revolving credit by year-end 2026.

USA Rare Earth has become the most consequential real-world stress test of America’s emerging, state-backed critical-minerals strategy. In late January 2026, the Trump administration advanced a non-binding but unprecedented $1.6 billion financing framework under the Department of Commerce’s CHIPS Program, tied to development of the Round Top project in Texas and an integrated mine-to-magnet supply chain. In parallel, the company closed a $1.5 billion private PIPE, bringing total contemplated capital to $3.1 billion.

Rare Earth Exchanges™ reviews regulatory disclosures delineating risks and opportunities.

Scale matters. This is not Washington’s first intervention in rare earths—but it is its boldest extension. In 2024–2025, the Department of Defense invested roughly $400 million in preferred equity and warrants in MP Materials, alongside a $150 million DoD loan, a structure widely understood to include effective NdPr price-floor protection (~$110/kg). That architecture materially reduced downside risk.

USA Rare Earth’s structure does not. MP has also secured access to $1 billion via Golden Sachs and Morgan Stanley, and to a half-billion-dollar magnet recycling project with Apple.

With USA Rare Earth, there are no price floors, no guaranteed offtake, and no revenue backstops. Execution risk sits squarely with the company and its shareholders.

Layered above this is Project Vault, a proposed $12 billion strategic critical-minerals stockpile, seeded with $10 billion from the U.S. Export-Import Bank and $2 billion in private capital. The macro signal is unmistakable: Washington is prepared to act as a financier, equity participant, and—implicitly—a market stabilizer.

That is the policy layer.

What follows is the ore, the chemistry, and the contracts.

What the SEC Disclosure Says: The Deal, Without the Gloss

USA Rare Earth’s January 26, 2026, Form 8-K and Exhibit 99.1 are unusually explicit in laying out contingencies.

Capital Stack (as filed)

• $277 million in proposed CHIPS Act direct funding
• $1.3 billion senior secured loan, 15-year tenor, expected pricing Treasury + ~150 bps
• $1.5 billion PIPE, 69.8 million shares at $21.50 (closed January 28, 2026)

Government Equity Economics

• 16.1 million common shares issued at an implied $17.17/share
• ~17.6 million warrants, $17.17 exercise, 10-year term
• Effective government ownership: ~8%–16% fully diluted (pre-PIPE), depending on warrant exercise

The asymmetry is critical: government equity and warrants remain outstanding even if funding is delayed, reduced, or clawed back. This is not cosmetic dilution—it is structural.

Conditions First, Capital Later

Before definitive agreements are executed, USA Rare Earth must satisfy a long list of prerequisites, including:

• Raising ≥ $500 million in non-federal capital (now satisfied via PIPE)
• Securing two MOUs from semiconductor end- or mid-stream users
• Locking NdPr oxide and MREC feedstock agreements through 2027
• Exercising a Texas GLO surface-purchase option
• Completing third-party nuclear-licensing validation at the Wheat Ridge lab
• Defining a power-infrastructure plan for the Stillwater magnet facility

Failure on any single condition can halt the transaction before funds are drawn.

Milestone-Gated Cash: Industrial Finance, Not Venture Capital

Unlike MP Materials’ price-protected structure, every dollar of USA Rare Earth’s government funding is milestone-released and clawback-exposed.

Round Top (Dec 2026–Dec 2028):

• Definitive feasibility study
• Early works
• Solvent-extraction completion
• Construction completion

Metals & Alloy (Mar–Dec 2027):

• Technical feasibility
• Commercial qualification

Magnet Manufacturing (Jun 2026–Mar 2028):

• Initial production and demandvalidation
• Incremental capacity and demand validation

Miss a milestone → funding does not release.

Miss final milestones by more than two years → prior funding may be clawed back.

Meanwhile, the company must still:

• Fund ~$4.1 billion total capex
• Establish a $250 million revolving credit facility by Dec 31, 2026

This is performance-contingent industrial finance, not patient capital.

What Holds—and Where the Squeeze Tightens

Several core critiques remain intact:

• Round Top is geologically massive but ultra-low grade, consistent with prior technical disclosures. Potential challenges include extraction, refining, and processing at scale and economy.
• The mine plan depends on heap leaching plus complex downstream separation, historically a failure-prone pathway.
• The Less Common Metals (LCM) acquisition is real and strategically valuable for midstream alloy capability.

Important nuance matters:

• USA Rare Earth has produced an initial batch of NdFeB magnets (January 2025). That milestone matters—but it does not establish repeatability, qualification, or revenue.
• MP Materials’ support was not a simple equity injection—it combined preferred equity, warrants, loans, and effective price protection, fundamentally altering risk allocation.

Round Top’s Core Challenge: “Good-Stuff ppm” Economics

Round Top’s vulnerability is not geological existence—it is economic density.

Illustrative, conservative math:

• 638 ppm total REE (0.064%)
• If ~75% is Ce/La, higher-value content ≈ 160–200 ppm
• Plausible in-situ basket value: $12–$15 per ton,pre-recovery

Against:

• Mining, crushing, heap leaching
• Acid and reagent logistics
• Solution handling and impurity removal
• Solvent extraction into saleable oxides (the costliest step)

Even optimistic cases struggle to keep all-in processed-rock costs below ~$25/ton. When revenue per ton is structurally lower than cost, scale amplifies losses.

Round Top has always been a chemistry bet wearing a mining label.

Complexity Is Not Free Diversification

USAR’s strategy—REEs plus lithium, gallium, zirconium, hafnium, and more—adds optionality. It also adds:

• New circuits
• New QA specifications
• New waste streams

Without long-duration continuous pilot runs, independently validated recoveries, and customer-accepted specifications, “we monetize everything” becomes execution-risk stacking, not diversification.

LCM Helps—But It Doesn’t Change the Rock

LCM meaningfully reduces midstream risk and gives the West rare alloy-making capability. It does not convert low-grade rhyolite into a high-margin orebody. Until Round Top produces oxides economically, LCM de-risks one link, while the hardest link remains unresolved.

Magnets: Real Progress, No Free Pass

Stillwater is real. Initial production has occurred. What remains unproven:

• Repeatability
• Yield
• Specification compliance
• Customer qualification

Here again, structure matters: no guaranteed offtake, no price floor. Demand validation itself is a funding milestone.

The Risk Many Investors Miss: Asymmetric Dilution

Per the SEC disclosure:

• Government equity and warrants do not unwind if funding stalls or is clawed back
• Dilution persists even without cash

This asymmetry is rare in U.S. mining finance—andmaterial.

What Real De-Risking Looks Like (Next 12–24 Months)

To transition from policy emblem to investable industrial asset, USA Rare Earth must deliver:

• DFS-level economics, not PEAs
• Full elemental distribution disclosure
• Continuous demonstration-plant mass-balance data
• Repeatable, customer-qualified magnetruns
• Clear articulation of price-risk mitigation relative to MP-style protection

Bottom Line

USA Rare Earth is strategically necessary per the federal government, but necessity does not repeal physics. Government equity can buy time. Stockpiles can smooth demand. Neither can rescue negative unit economics.

REEx supports building ex-China supply chains with discipline. The ask remains simple:

• Show the mass balance.
• Show the costs.
• Show the specs.
• Then celebrate.

Until then, this remains one of the most ambitious—and financially conditional—industrial-policy bets in modern U.S. mining history. America and the West need a successful USA Rare Earth, and there is work to do.

• The Trump administration announced a preferential critical minerals trade bloc featuring reference prices, enforceable price floors, and adjustable tariffs to counter China's dominance and stabilize volatile commodity cycles that prevent Western projects from securing financing.
• Vice President JD Vance and Secretary of State Marco Rubio framed the initiative as essential infrastructure for the AI economy and national security, positioning it as a new trade architecture era rather than just subsidies or permits.
• Project Vault, backed by a $10 billion Export-Import Bank loan with participation from major OEMs like Boeing and GE Vernova, aims to create demand scaffolding that derisks refineries and processing capacity, though implementation challenges around rules of origin, pricing complexity, and enforcement remain unresolved.

On February 4, 2026, the State Department’s inaugural Critical Minerals Ministerial began with a deliberately cinematic pairing: Vice President JD Vance as the keynote “closer,” and Secretary of State Marco Rubio as the host framing the room’s mission—treating critical minerals not as a niche commodity story, but as the material base layer of industrial power, defense readiness, and the AI economy. Reuters and AP both reported the same core reveal: the Trump administration is pushing a preferential critical-minerals trade bloc featuring reference prices and enforceable price floors—backstopped by adjustable tariffs—as a counterweight to China’s dominance and to the whiplash price cycles that keep Western projects from reaching financeable final investment decisions.

Rare Earth Exchanges™ reports on this important event organized by the Trump administration. Note, we will follow up later today with articles inclusive of statements by U.S. supply chain players.

Vance’s opening move was to shift the audience from abstraction to gravity. He tied critical minerals to the “real economy”—the idea that data centers and software still depend on mined and refined inputs—then pivoted to a market diagnosis: supply chains “brittle and exceptionally concentrated,” asset prices “persistently depressed, and an investment pattern where projects die “on the vine” after sudden supply surges collapse prices. In other words, the market isn’t merely volatile; it is strategically gameable, and the West keeps losing the financing cycle.

That framing matters because it sets up the administration’s most aggressive claim: this isn’t a “more permits” or “more subsidies” era. It’s a new trade architecture era.

Vance’s Core Pitch: A Minerals “Trade Zone” With a Price Floor—Industrial Policy in Tariff Form

Vance described an alliance-scale mechanism: members would trade critical minerals inside a preferential zone with reference prices acting as a floor, enforced by adjustable tariffs to prevent undercutting by low-priced imports. This represents an effort to stabilize prices and incentivize private investment—accepting that the cost of stability may be higher near-term prices, but arguing that the cost of instability is no mines, no refineries, no magnets.

If you’re an investor or operator, you can hear the subtext: this is an attempt to manufacture bankability. In mining and processing, “great geology” is not enough; what matters is whether a project can clear long-duration capital under commodity cycles. A credible floor turns a fragile pro forma into something lenders can underwrite.

Vance then stitched the pitch to recent actions: Project Vault, branded as a domestic critical-minerals stockpile initiative, was presented as the parallel backbone—demand signal + inventory strategy—while the trade zone would be the price-and-flow discipline. Reuters and AP both linked the ministerial messaging directly to Project Vault’s scale.

Rubio’s Frame: “Economic Security Is National Security”—And the Mountain Pass Parable

Rubio’s remarks—less mechanistic, more historical—worked like a guided tour through America’s industrial amnesia. He argued the U.S. once mined and produced critical mineral derivatives (including rare earth magnets), cited Mountain Pass as emblematic, and told the story many advanced economies know too well: outsource the “unfashionable” steps, celebrate design, then wake up dependent.

His most strategic analogy was the overt callback to the Washington Energy Conference of the 1970s and the creation of the International Energy Agency—a signal that the administration wants a minerals-era equivalent of coordinated energy security: shared rules, shared stockpiles, shared resilience. (That comparison is conceptually powerful—though operationally harder—because minerals are multi-material, multi-stage, and far less fungible than crude oil.).

Rubio also anchored the summit in a broader diplomatic scaffolding that already exists: Pax Silica, a State Department-led initiative launched in December 2025, focused on securing a silicon supply chain and the upstream inputs the AI era runs on.

The Money Signal: Project Vault and the Question of “Who Actually Buys?”

Project Vault is not just a stockpile headline; it is being sold as a market-making device. The U.S. Export-Import Bank said its board approved a direct loan of up to $10 billion to Project Vault and listed early “indications of participation” from major OEMs (including names such as Boeing and GE Vernova) along with commodity suppliers and traders.

That detail—OEM participation—may be the most important line in the whole rollout. Stockpiles without offtake logic can become political warehouses. Stockpiles tied to industrial procurement can become demand scaffolding that derisks refineries, alloying, and magnet capacity.

The Geopolitical Backdrop: China Leverage, Market Power—and a Freshly Hardened U.S. Posture

The summit’s urgency sits inside a wider escalation cycle. This ministerial, frankly, is part of Washington’s effort to weaken China’s grip on critical minerals and reduce supply-chain vulnerability.

This is not a minor point: the administration is narrating minerals policy as a national-security instrument, not merely an economic development program. That framing will attract allies who share threat perceptions—and repel partners wary of being drafted into a new bloc logic.

What’s Real, What’s Rhetoric, What’s Missing

What emerges as broadly credible is the administration’s core diagnosis of market failure. The pattern in which promising mining or processing projects collapse when prices suddenly crater is well documented across lithium, rare earths, and other strategic materials, and it remains one of the central reasons Western efforts to diversify supply chains have repeatedly stalled. In that light, the idea of pairing a price floor with tariff-based enforcement is not radical so much as corrective: in theory, it could stabilize investment conditions and make long-duration capital viable again—if enforcement is airtight and participation is deep enough to prevent arbitrage.

What remains unresolved, however, is where theory meets operational reality. Which minerals will qualify, at which stages of the value chain, and under what reference prices? Vance spoke of floors “at each stage of production,” but the complexity is immense: concentrates, oxides, metals, and finished products like magnets are distinct markets with different bottlenecks and pricing dynamics.

Equally thorny is the risk of “China-in-the-middle” laundering—an issue even sympathetic observers have flagged—where low-cost Chinese material could be rerouted through third countries unless rules of origin, traceability, and enforcement are exceptionally strict. And finally, there is the political test: while U.S. officials say roughly 30 countries have expressed interest in joining a critical minerals club, interest is not the same as accession.

Signing on means accepting pricing discipline and tariff guardrails, a step that many allies may hesitate to take once domestic politics and trade sensitivities come into play.

The investor takeaway

This summit wasn’t a ribbon-cutting. It was a declaration that the administration wants to replace commodity fatalism with engineered stability—a deliberate attempt to turn critical minerals into an allied, rules-based industrial commons. And it’s about time.  If they can execute on enforcement and procurement and avoid excessive government entanglement (e.g., nepotism), especially via Project Vault, this could re-rate the financeability of midstream and downstream assets. If they can’t, it becomes another grand doctrine that breaks on the rocks of implementation.

• President Trump's $12B Project Vault triggered sharp rallies in rare earth stocks like MP Materials and USA Rare Earth, but institutional investors remained cautious as the VanEck ETF closed lower—signaling that policy headlines don't replace company fundamentals.
• The proposed stockpiling program aims to counter China's 90% dominance in refining and magnet production, yet critical details remain unclear: which materials qualify, how price floors work, and whether capital prioritizes downstream processing over mining alone.
• Sustainable value depends on building integrated U.S. supply chains from mine to magnet—MP Materials leads in scale, USA Rare Earth bets on vertical integration, while emerging players like Phoenix Tailings, Vulcan Elements, and ReElement Technologies fill critical midstream and manufacturing gaps.

Why did rare-earth and critical-mineral stocks rally after the White House unveiled Project Vault, which proposed a $12 billion effort to reduce U.S. reliance on China? There’s market excitement and then supply-chain reality; there’s policy signaling and lots of execution risk. What must investors understand before treating government involvement as a guaranteed safety net?

What Was Announced — and Why Stocks Jumped

According to Phil Rosen of Opening Bell Daily (Feb. 3, 2026), President Trump’s Project Vault envisions a new strategic stockpiling and offtake model for rare earths and critical minerals. The plan reportedly combines roughly $10 billion in long-dated U.S. Export-Import Bank financing with ~$1.67 billion in private capital, aiming to stabilize supply and pricing outside China.

Markets reacted immediately. Shares of MP Materials, USA Rare Earth, Idaho Strategic Resources, and Critical Metals Corp. rose sharply before paring gains. Notably, the VanEck Rare Earth & Strategic Metals ETF finished slightly lower on the day—signaling enthusiasm in individual names, but restraint at the institutional portfolio level.

The dominant interpretation: investors are pricing in a “White House put,” an implied policy backstop against Chinese price suppression and export leverage.

REEx Take

Yes, shares of USA Rare Earth and some others surged on headlines around President Trump’s proposed project. The rally reflects policy optimism rather than company fundamentals: Project Vault, which would combine roughly $10 billion in Ex-Im Bank loans with private capital and long-term purchase commitments, is designed to cushion supply shocks—not to guarantee near-term revenue for pre-commercial developers like USAR.

When it comes to USA Rare Earth and its $3+ billion public and private financing, it is not yet producing at scale, has no direct government purchase contracts, and still faces the same structural bottlenecks confronting the sector, including China’s roughly 90% dominance in refining and magnet production.

So Rare Earth Exchanges™ confirmed yesterday the stock popped on the perception of a government “backstop,” but the underlying reality is unchanged: stockpiles can delay shortages and calm markets (and trigger speculative hoarding), not create new supply or accelerate the build-out of Western processing and magnet capacity.

Where the Narrative Is Grounded in Reality

Today’s press certainly identifies the core vulnerability: China’s near-monopoly over rare earth separation, magnet manufacturing, and downstream defense and clean-tech components. Introducing long-term offtake commitments and price visibility—_if executed_—could reduce the boom-bust cycles that have historically destroyed Western rare-earth projects before scale.

From a supply-chain perspective, the policy direction is sound. Stockpiles alone do not secure resilience; downstream integration does.

Where Optimism Runs Ahead of Evidence

Project Vault remains conceptual. Critical details are absent: which materials qualify, how price floors are enforced, how political turnover risk is mitigated over a 15-year horizon, and—most importantly—whether capital is prioritized toward processing and magnets, not just mining. Recasting speculative miners as “regulated utilities” reflects market hope, not policy fact.

Equity Reality Check: Fundamentals Still Matter

• MP Materials: Best-in-class U.S. asset base (a U.S. treasure trove), but valuation already reflects policy optionality. Execution risk lies in the separation and refining of technical scalability, economics, and magnet ramp-up.
• USA Rare Earth: Highly levered to policy headlines. Long-term value hinges on financing discipline, capex sequencing, and downstream proof—not stockpiles alone.
• ETF signal: Flat performance suggests institutions are waiting for details, not trading slogans.

The Questions Investors Should Demand Answers To

• Does Project Vault guarantee demand for magnets, or only raw materials?
• What happens if political leadership changes mid-program? What if there political scrutiny into current deal structures?
• Can pricing mechanisms truly counter Chinese state-driven oversupply? Think carefully on this one.

Final Thought

Project Vault is a meaningful signal, not a substitute for fundamentals. The U.S. and West must rebuild the entire rare earth supply chain—processing, metallurgy, and manufacturing—or the “put” remains rhetorical.

Remember, all that matters for investors is to track the key emerging supply chains in the USA, for instance. Which ones stand a better chance at sustained execution? 

Players  and Ecosystems REEx Monitoring targeting USA*

*Note for a comprehensive list, see the _Rare Earth Exchanges_™ rankings (subscribers) upstream, midstream, and downstream.

**in production

Other players include Brazilian Rare Earth and a recent partnership with refiner Carester, and several others.  On the magnet front, Permag, Arnold Magnetic Technologies, Neo Performance Materials (Canada, Europe). Lynas Rare Earths (LYC.AX), the most advanced upstream/midstream “ex-China” company based in Australia, focuses heavily on Japan. Arafura (OTCMKTS: ARAFF) is a promising upstream company close to FID. Mkango Resources (OTCMKTS: MKNGF) out of Canada is building a recycling-to-magnet supply chain.

• The Trump administration has fundamentally shifted US policy from market signaling to direct intervention in critical minerals through equity stakes, price floors, and Pentagon-backed loans—marking a clean break from decades of hands-off industrial policy.
• Bilateral resource deals with Australia, Saudi Arabia, DRC, and Ukraine blend minerals access with security guarantees, though partner jurisdictions carry political and infrastructure risks that public finance can soften but not eliminate.
• Pax Silica represents an ambitious but asymmetric coalition framework where the US defines architecture and controls capital while allies contribute capabilities—creating structural tension between partnership rhetoric and leverage reality.

A new analysis (opens in a new tab) from the International Institute for Strategic Studies by Dr. Maria Shagina (opens in a new tab) argues that the Trump administration has crossed a strategic Rubicon in critical minerals. The United States, long allergic to overt industrial policy, is now practicing it openly. Domestic “America First” deals, bilateral resource diplomacy, and the nascent Pax Silica framework together signal a shift from market signaling to market participation—accelerated by China’s April 2025 export controls. Washington is no longer nudging outcomes. It is underwriting them.

From Referee to Player-in-Chief

On the core facts, the paper is strong. Executive Order 14241, expanded use of the Defense Production Act, and funding from the One Big Beautiful Bill Act collectively mark a clean break from arm’s-length policy. Equity stakes, price floors, offtake guarantees, and Pentagon-backed loans—once politically radioactive—are now explicit tools. The MP Materials transaction is emblematic: defense-linked equity, subsidized credit, and demand guarantees stitched together to stabilize a structurally fragile rare earth market.

This diagnosis is accurate. Rare earth projects do not fail for lack of geology; they fail because Chinese price discipline and volatility crush long-duration capital. State participation lowers downside risk and pulls forward investment. As an explanation of why Washington intervened, Shagina’s analysis is analytically sound.

Bilateralism With a Strategic Accent

The treatment of bilateral deals—with Australia, Saudi Arabia, the DRC, Ukraine, and others—is also largely correct. These arrangements blend mineral access with security guarantees, reconstruction finance, or geopolitical alignment. The growing role of EXIM and the Development Finance Corporation as de-risking instruments is real and consequential.

The deeper assumption, however, deserves scrutiny: that these deals reliably translate into resilient supply. Many partner jurisdictions carry political, permitting, infrastructure, or governance risks that public finance can soften but not erase. State capital accelerates timelines, but it does not guarantee execution. And Rare Earth Exchanges™ is watching these mine-to-magnet ecosystems very closely.

Pax Silica: Alliance or Architecture of Control?

Where the analysis is most aspirational is Pax Silica. Framed as a “coalition of capabilities,” it is indeed a more systems-level concept than prior initiatives. Yet the asymmetry is underplayed. The United States defines the architecture, controls most of the capital, and sets the conditions of access. Allies contribute nodes—energy, processing, equipment, or capital—but rarely co-author the rules.

This is not a design flaw; it is the design. The tension between partnership and leverage is structural. Coalition-building demands trust and predictability, while tariff threats and unilateral tools erode both. These are some of the contradictions the author avoids.

What the Diagram Shows—and What It Cannot

The IISS deal map usefully visualizes the velocity of U.S. intervention: permits to equity, loans to warrants, domestic to global. What it omits is transparency. Deal terms remain opaque, lobbying pressure is intensifying, and environmental constraints are increasingly subordinated to speed. State capitalism reduces market risk—but raises political, regulatory, and execution risk, and with what could evolve into troubling rumblings around the corner.

Why This Matters Now

For rare earths, this is a watershed. The United States has conceded that market purity will not dislodge China’s dominance. The open question is whether Washington can execute industrial policy without fracturing alliances or over-centralizing control. Pax Silica may prove the most sophisticated framework yet—or the most fragile.

Profile

The International Institute for Strategic Studies (IISS) is a London-based globalstrategic think tank founded in 1958, best known for rigorous,policy-oriented analysis of international security, defense, arms control, geopolitical risk, and geoeconomics. Over more than six decades, it has built substantial credibility among governments, academics, media, and industry through flagship publications such as The Military Balance, regional security assessments, and thematic analyses that sit at the intersection of state power, military capability, economic security, and emerging technologies. IISS frames its mission as delivering independent, evidence-based insight to decision-makers, drawing on a broad network of research fellows and partner institutions across major regions, including the United States, China, Europe, the Middle East, and the Indo-Pacific. Its strengths lie in longevity, analytical rigor, and global reach, with a clear focus on how geopolitical trends shape strategic outcomes rather than near-term commercial returns. That same orientation also defines its limitations: IISS analysis prioritizes national-security logic over granular market economics, often assumes rational state behavior, and can underweight local environmental, Indigenous, or socio-economic impacts, while relying on strategic inference where proprietary deal data are unavailable. For rare earth and critical-mineral stakeholders, IISS provides valuable context on alliance structures, defense-driven industrial policy, and great-power competition over resource access—but its work is best used as a complement to technical, financial, and project-level analysis rather than a standalone guide for investment decisions.

Source: Dr. Maria Shagina, International Institute for Strategic Studies

https://www.iiss.org/online-analysis/online-analysis/2026/01/us-critical-minerals-diplomacy-from-america-first-deals-to-pax-silica (opens in a new tab)

• USA Rare Earth's market cap surged to $4.8B from under $500M in 2025 despite a $285M net loss, no revenue, and unproven separation capabilities, raising questions about valuation versus execution.
• Federal policy uncertainty emerged as a new risk factor, with potential withdrawal of automatic price floors threatening the business model that depends on government support over operational validation.
• Cantor Fitzgerald's involvement and proximity to Commerce Secretary Howard Lutnick amplified perception risk.
• Core structural challenges—scalable separation and non-Chinese feedstock—remain unresolved.

Rare Earth Exchanges has often written about USA Rare Earth and its policy-driven ascent—and the unresolved structural questions that trail it. This week’s volatility did not emerge in a vacuum. It stacked fresh capital, fresh scrutiny, and fresh policy (although we’re not sure if the right policy) doubt onto an already combustible narrative.

The Echo Chamber Grows Louder: What REEx Flagged—Then and Yesterday

In prior REEx pieces, we outlined three recurring fault lines:

• Downstream ambition outrunning upstream proof
• Policy leverage substitutes for operational validation
• Equity markets price future dominance before present capability

Yesterday, REEx added a fourth accelerant: policy uncertainty. We covered the Reuters-sourced reporting that the federal government may not extend automatic price floors across all rare earth companies—marking a potential departure from the MP Materials-style framework. That rumor matters. Price floors are not window dressing; they are the difference between bankable cash flow and theoretical margins when factoring in the Chinese state-backed monopoly behavior of the past and future.

The market reacted accordingly.

The Optics Question: Cantor, Capital, and Proximity to Power

How the deal was assembled matters almost as much as its size.

Cantor Fitzgerald’s role—widely reported as instrumental in aligning private capital alongside federal support—invites scrutiny not because it is improper, but because it is symbolic. The firm’s CEO, Howard Lutnick, formerly a prominent banker and now U.S. Secretary of Commerce, and the involvement of his son in transaction-related activities have triggered quiet discussion among institutional investors about perception risk.

In rare earths—where industrial policy, national security, and capital markets intersect—optics amplify volatility. This is not an allegation. It is how capital behaves.

The Numbers Beneath the Narrative: A Financial Reality Check

Strip away the headlines, and the fundamentals remain stark but typical for a firm at this stage:

• TTM net loss: –$285M
• EBITDA: –$39M
• Operating cash flow: –$24.6M
• Levered free cash flow: –$22.4M
• Revenue: effectively nil

Yes, the company holds ~$257M in cash with minimal debt. But valuation has expanded far faster than fundamentals:

• Market cap: ~$4.8B, up fromsub-$500M earlier in 2025
• EV/EBITDA: ~28x on negative EBITDA
• Book value per share: negative

This is a pre-revenue, pre-separation enterprise being valued as though industrial policy has already delivered operating proof—placing execution risk under a microscope.

The Structural Constraint Still Standing

The core REEx critique remains unchanged: USA Rare Earth has not yet demonstrated scalable separation and refining, nor secured durable non-Chinese feedstock. Alloy capability helps downstream credibility—but magnets still require oxides.

Capital accelerates paths. It does not dissolve chokepoints.

Why This Matters Now

USAR is not just a stock—it is a live case study in what happens when Washington moves faster than chemistry and signals it may step back from price discipline. The recent whiplash is not confusion. It is price discovery under uncertainty.

Investors should expect more of it.

At a minimum, this episode confirms something long overdue: the U.S. government has finally woken up to the strategic reality of rare earths and China. After decades of neglect, Washington now understands that rare earth supply chains are not abstract commodities markets but hard infrastructure systems—dominated, engineered, and disciplined by Beijing. Federal capital, loan guarantees, and industrial policy signalingreflect a recognition that market forces alone will not dislodge China’s grip on separation, metals, and magnets. Whether this awakening translates into durable, execution-grounded supply chains remains an open question—but the era of pretending rare earths are someone else’s problem is clearly over.

• The Trump administration appears to be moving away from direct price floor guarantees for critical minerals.
• The MP Materials $110/kg NdPr price floor deal has created uncertainty for domestic rare-earth project financing in a Chinese-dominated market.
• This policy shift may represent a narrowing of one instrument rather than a complete abandonment.
• Washington is potentially pivoting toward trade-enforced pricing norms, stockpiles, equity stakes, and selective capital instead of taxpayer-backed price guarantees.
• Section 232 authority still considers negotiated price floors as part of trade architecture.
• The approach suggests the playbook isn't abandoned but is being revised to utilize more politically palatable tools.
• These tools include tariffs and local-content rules instead of direct federal price insurance.

Is Washington really walking away from the one tool that looked to be instrumental in America catching up with China? In a market defined by Chinese price suppression, capital starvation, and chronic Western project failure, the idea that the United States would now abandon minimum-price mechanisms borders on strategic whiplash.

Yet that is the signal suddenly rippling through the critical-minerals sector: that project developers should stand on their own balance sheets, not expect government-backed pricing, and prove they can survive without a safety net. If true, it raises uncomfortable questions. Was the MP Materials price floor a one-off anomaly—or a policy experiment now being quietly disowned?

What about the words expressed in White House announcements? Can domestic rare earth projects clear financing without some form of price discipline when China still sets the marginal price? And if price floors are politically radioactive, what replaces them—equity stakes, tariffs, stockpiles, or something more subtle? Those questions surfaced this week after reports that senior Trump administration officials conveyed this message in a closed-door meeting with industry executives, according to multiple sources cited (opens in a new tab) by Reuters.

That headline reads like a policy U-turn—but it clashes with the administration’s own Section 232 posture, which explicitly contemplates negotiated “price floors” as a tool in critical mineral trade arrangements. Investors should treat this as a narrowing of one instrument (direct federal price guarantees), not necessarily the burial of the broader concept.

What Reuters Gets Right (and Why It Matters)

Two things can be true at once: price floors are politically attractive, and they are fiscally/legally messy.

Reuters is solid on the core factual architecture: the MP Materials package included a $110/kg NdPr price floor, and officials now appear reluctant to replicate that structure elsewhere. The MP deal is not a rumor—it is in the SEC filings and MP’s own materials.

In supply-chain terms, this matters because rare earth pricing is not a “free market” when a dominant actor can sustain uneconomic pricing to defend share. A floor is one way to underwrite bankability when China’s cycle turns predatory.

The Quiet Leap: From “Sources Say” to “Policy Reversal”

Here’s the speculative jump: Reuters frames the shift as a broad move away from price floors due to a lack of congressional funding/authority and the complexity of setting market pricing. That may be accurate—but it’s also not on-the-record policy, and it doesn’t negate other levers: stockpiles, equity, loans, local-content rules, or trade-negotiated pricing disciplines.

Also, Section 232 doesn’t require Washington to cut “contract-for-difference” style checks to miners. It can pursue price floors as trade architecture—a very different animal than a taxpayer backstop.

REEx Take: The Playbook Isn’t Torn Up—It’s Being Edited

The notable signal isn’t “no price floors.” It’s this: Washington may be shifting from domestic price insurance (hard, appropriations-sensitive) toward trade-enforced pricing norms and selective capital (more legible under 232 and less like a blank check). The rare earth supply chain remains the same chessboard—only the pieces are being repainted.

Citations: Reuters (Jan 28, 2026). White House Section 232 Proclamation (Jan 14, 2026) + legal analysis of contemplated “price floors.” MP Materials/DoD transaction filings and exhibits (July 2025).

• China's Rare Earth Price Index reached 247.4 on January 28, 2026—147% above the 2010 baseline—signaling decisive upward pricing momentum after stabilization through 2024 and acceleration into early 2026.
• Rising Chinese rare earth prices directly impact Western manufacturers in EVs, wind turbines, defense, and AI infrastructure, triggering higher magnet input costs, tighter contracts, and reduced spot-market availability.
• Despite billions invested in ex-China supply chains, Chinese pricing remains the global benchmark because China controls majority separation, metal-making, and magnet capacity—functioning as the marginal supplier that sets market prices worldwide.

The China Rare Earth Industry Association released its latest Rare Earth Price Index on January 28, 2026, reporting a reading of 247.4—more than 2.4× the 2010 baseline and the strongest signal yet that pricing momentum inside China’s rare earth market has decisively turned upward.

What the Index Actually Measures

This is not a single commodity price. The index is a composite benchmark calculated from daily, real-time transaction data reported by 20+ rare earth companies across China. Those data are averaged and fed into the Association’s price-index model, then normalized against a base period of calendar year 2010 (index = 100). In practical terms, today’s reading indicates that aggregate rare earth transaction prices in China are running roughly 147% above the 2010 reference level.

Why This Print Matters Now

The accompanying trend chart—spanning early 2023 through January 2026—tells a clear story. Prices fell sharply through 2023, reflecting post-pandemic demand normalization and inventory liquidation. The market stabilized across much of 2024, then re-accelerated through late 2025 into early 2026, culminating in the current 247.4 reading. That trajectory points to tightening domestic conditions, firmer pricing power among producers, and renewed procurement urgency within China’s rare earth ecosystem.

Implications for U.S. and Allied Supply Chains

For Western manufacturers, the signal is actionable even without element-by-element detail. A rising China-linked index typically precedes higher magnet input costs—especially for NdPr-dependent supply chains—along with tighter contract terms, reduced spot-market availability, and less flexibility for smaller buyers. Industries most exposed include EV drivetrains, wind turbines, industrial robotics, aerospace systems, AI infrastructure, and segments of the U.S. defense industrial base.

The Strategic Subtext

Beyond pricing, the index underscores China’s structural influence over market psychology. When domestic Chinese benchmarks move higher, export pricing and availability often follow. In effect, Beijing doesn’t just control much of the physical supply—it increasingly shapes expectations, which ripple outward into global contracting behavior.

For U.S. policymakers and procurement leaders, the message is consistent with recent developments in standards-setting and export management: price risk, specification risk, and timing risk remain intertwined. Diversification efforts may reduce dependence, but they have not yet insulated Western markets from China’s internal pricing cycles.

Why Chinese Rare Earth Pricing Still Matters—Even in an “Ex-China” Supply Chain Era

The United States and its allies are investing billions to build an “ex-China” rare earth supply chain, but Chinese pricing remains the gravitational center of the global market and will continue to do so for the foreseeable future. This is not a political argument; it is a structural one.

Why? China still controls the majority of global rare earth separation, metal-making, and magnet production capacity, which makes it the marginal supplier—the producer that ultimately balances global supply and demand. In commodity markets, the marginal supplier sets the price. Until non-Chinese capacity can meet global demand reliably and at scale, Chinese domestic pricing will continue to anchor global benchmarks in myriad ways.

Even projects marketed as “China-independent” remain deeply price-indexed to China. Most Western offtake agreements, project financings, and downstream contracts are explicitly or implicitly tied to Chinese reference prices, with premiums or discounts layered on top. This is even with price floors now emerging, such as the U.S. Pentagon deal inked with MP Materials ($110 kg NdPr). Bankability, valuation models, and internal rates of return are still built around China-derived pricing signals. When China’s price index rises, the global floor rises with it—regardless of where the material is mined or processed.

China also controls supply elasticity in a way no emerging Western supply chain can yet match. Chinese producers can ramp output up or down far faster than new projects in the U.S., Australia, or Europe, which face permitting delays, environmental review, capital constraints, and workforce shortages. This gives China unmatched influence over short-term pricing dynamics: when Chinese supply tightens—whether deliberately or organically—prices move quickly, long before alternative supply can respond.

Rare earth pricing is further reinforced downstream. It is not just about oxides, but about magnets, motors, and finished components and assemblies. China continues to dominate NdFeB magnet manufacturing and motor integration. Western automakers and defense contractors may source oxides elsewhere, but many still re-import China-priced components, effectively pulling Chinese cost structures back into ostensibly diversified supply chains.

Beyond physical supply, China shapes market psychology. Its price indices function as leading indicators watched by procurement teams, traders, and investors worldwide. Rising domestic prices trigger inventory hoarding, contract renegotiations, and preemptive buying across global markets. Even buyers that never touch Chinese material are reacting to Chinese price signals because their suppliers, financiers, and competitors are.

Finally, Western rare earth supply chains—while real and improving—remain young, capital-intensive, and operationally fragile. They lack the depth, redundancy, and shock-absorption capacity of China’s integrated ecosystem. In this phase, Chinese pricing acts as a stress test: when prices rise, weak projects fail; when prices fall, capital retreats.

Bottom line: until Western supply chains mature across mining, separation, metals, and magnets, Chinese pricing will remain an unavoidable reference point, risk signal, and psychological anchor of the rare earth market. Building supply outside China is essential—but pretending Chinese prices no longer matter is not a strategy. It is wishful thinking.

Disclaimer: This item is sourced from state-linked Chinese industry media associated with the China Rare Earth Industry Association. Index values, methodology, and inferred market impacts should be independently verified using third-party pricing services, customs and export data, and non-Chinese market intelligence before informing investment or procurement decisions.

• The U.S. government is acquiring a 10% equity stake in USA Rare Earth for $1.6 billion.
• This includes $1.3 billion in CHIPS Act debt financing and discounted shares at $17.17.
• The move represents a strategic shift from grants to direct ownership in critical mineral assets.
• USA Rare Earth's Round Top deposit in Texas targets heavy rare earths such as dysprosium for defense and EV magnets.
• The production is planned to start in 2028.
• USA Rare Earth plans to have integrated magnet manufacturing in Oklahoma by late 2024.
• This deal is similar to equity investments in Lithium Americas, Trilogy Metals, and MP Materials.
• The strategy is part of a new U.S. industrial policy playbook leveraging balance sheets and cap table positions.
• The goal is to secure supply chains that are currently dominated by China.

The deal, translated and stripped of drama. According to Chinese-language reporting published by the China Rare Earth Industry Association and covered by Rare Earth Exchanges™, the U.S. government plans to acquire an approximately 10% equity stake (on a fully diluted basis) in USA Rare Earth (USARE). The move sits within a $1.6 billion federal support package intended to stand up a domestic mine-to-magnet supply chain.

Citing as well the Financial Times, Washington is to receive 16.1 million common shares plus warrants for an additional 17.6 million shares, both priced at $17.17 per share—roughly a 25% discount to USARE’s prior $22.71 close. The implied equity valuation is ~$3.4 billion.

In parallel, the government is offering $1.3 billion in debt financing through a Commerce Department facility enabled by the CHIPS and Science Act. Investor briefings are expected, and another $1 billion may be earmarked for similar critical minerals investments.

Industrial Policy by Capitalization Table

This is not a one-off. It follows earlier government-linked transactions involving Lithium Americas and Trilogy Metals, and a multibillion-dollar arrangement with MP Materials at Mountain Pass. The pattern is clear: equity + debt + offtake-adjacent support to de-risk assets Washington deems strategic. This is industrial policy executed through balance sheets, not just grants.

Round Top: Why This Asset Matters

USARE’s Round Top deposit near Sierra Blanca, Texas—targeting late-2028 production—is unusually rich in heavy rare earths, notably dysprosium, essential for high-temperature permanent magnets used in EVs, wind turbines, and defense systems.  A 2019 technical report projected a 20-year mine life and ~2,213 tpa of rare earths, including ~1,900 tpa of heavy rare earths. In January last year, the project produced 99.1%-pure dysprosium oxide—a real, if early, milestone.

The broader vision includes a 5,000-tpa magnet plant in Stillwater, Oklahoma, targeted for initial commercialization this year, and a processing and separation lab in White Ridge, Colorado.

What’s Solid—and What’s Framed to Persuade

Solid: pricing discount, CHIPS-enabled debt, Round Top’s heavy-REE profile, and Washington’s expanding equity playbook.

Speculative: timelines. Mine-to-magnet integration at scale remains chemically, capital-, and talent-intensive. Equity does not erase those constraints.

Narrative framing to note: state-linked Chinese reporting casts U.S. action as reactive; the structure suggests a deliberate shift from subsidies toward partial ownership.

Why Investors Should Care

This is precedent, not just funding. The U.S. is signaling a willingness to sit on the cap table to secure critical materials—especially heavy rare earths that China still dominates midstream. That changes risk calculus, valuation logic, and exit assumptions.

Sources: China Rare Earth Industry Association, citing Mining.com, Financial Times, and Reuters.

Rare Earth Exchanges™

• USA Rare Earth received a non-binding $1.6B CHIPS Act package, which includes a $277M grant and a $1.3B loan.
• The company also received $1.5B in private PIPE funding to build America's first mine-to-magnet heavy rare earth supply chain, with a target for commercial production by 2028.
• Despite having a $3.99B market cap, the company remains pre-revenue with zero cash flow, trading on the assumption that it can compress 30 years of Chinese heavy rare earth refining expertise into a 4-year Western timeline.
• Success is not based on matching China's scale by 2030, which is considered unlikely.
• The goal is to break China's 95%+ monopoly by establishing a capacity of even 3,000-5,000 tpa (tonnes per annum).
• It also focuses on training the workforce and proving a repeatable Western pathway for strategic materials like dysprosium and terbium.

The latest announcement (opens in a new tab) from USA Rare Earth (opens in a new tab) (NASDAQ.USAR) landed less like a financing event and more like a declaration of intent. A non-binding Letter of Intent under the CHIPS Act ($277 Million of Federal Funding and a $1.3 Billion Senior Secured Loan from the CHIPS Act), paired with a $1.5 billion private PIPE, has been framed as a turning point for U.S. rare earth independence.

That framing is understandable. It is also incomplete.

This is not a finalized $1.6 billion federal rescue, nor proof that the United States has “solved” heavy rare earths. It is something more subtle—and arguably more consequential. Washington has crossed a psychological threshold. Federal capital is now being explicitly mobilized toward heavy rare earth midstream capacity, not just light rare earth mining or neodymium-iron-boron (NdFeB) magnets.

That distinction matters. But it does not suspend physics, chemistry, or capital discipline.

Why WashingtonStepped In—and Why It Makes Sense

From a government and industrial-policy perspective, USA Rare Earth is being positioned to address gaps that remain unresolved across the U.S. supply chain. To be clear, MP Materials is not standing still. The U.S. Department of Defense has already backed a roughly $150 million loan to MP Materials to develop heavy rare earth separation capability—a tacit admission that NdPr alone does not secure defense, semiconductor, or aerospace supply chains.

Even with that support, however, the United States still lacks commercial-scale production of dysprosium, terbium, yttrium, gallium, and hafnium—materials embedded deep inside semiconductor process nodes, jet engines, radar systems, and advanced weapons platforms. USA Rare Earth’s pitch targets precisely those choke points.

Its ownership of Less Common Metals (LCM) brings metal- and alloy-making capabilities that the U.S. largely lacks, while planned expansion in France quietly aligns with allied resilience objectives across Europe and the Five Eyes (less Canada?). Structurally, the proposed federal support—$277 million in grants and a $1.3 billion senior secured, milestone-gated loan—avoids the optics of open-ended subsidies. Politically, it is sellable. Strategically, it is overdue.

Where the Market—and the Narrative—Run Hot

From a contrarian capital-markets lens, however, optimism is already outrunning the math. At roughly $28.72 per share at the time of this writing, USA Rare Earth carries a market capitalization north of $3.99 billion and an enterprise value around $3.2 billion—despite zero revenue, negative EBITDA, and persistent operating losses.

The valuation implicitly assumes that the Round Top deposit reaches commercial production by 2028, that heavy rare earth separation scales smoothly onfirst pass, and that magnet margins hold even under potential Chinese price retaliation. That is a heroic stack of assumptions.

Dilution is also real, not theoretical. The PIPE alone adds nearly 70 million shares, layered with government equity and warrants. Even flawless execution caps per-share upside unless cash flows arrive quickly—something mining, separation, and refining almost never do.

Comparisons sharpen the contrast. Lynas Rare Earths already operates separation at scale, generates diversified revenue, and trades on demonstrated throughput rather than promise. USA Rare Earth remains pre-revenue, pre-mine, and pre-scale—yet is being priced like a late-stage industrial platform.

Optics Matter—Especially When Billions Are at Stake

There is also an optics layer Washingtoncannot afford to ignore. The PIPE was led by Cantor Fitzgerald, now run by the son of Commerce Secretary Howard Lutnick, who previously led the firm for decades. Separately, recent reporting has highlighted hundreds of millions of dollars in federal-adjacent support for Vulcan Elements, involving an investment firm linked to Donald Trump Jr.

None of this implies impropriety. But in an era where industrial policy, capital markets, and political alignment increasingly intersect, perception becomes a policy variable. The success or failure of these projects will shape not just supply chains, but public trust in the re-industrialization agenda itself.

The Unsettled Core—and the Hard Math

The most underappreciated risk remains fundamental: feedstock sustainability and separation at scale are not yet proven. Round Top’s flowsheet has advanced, but commercial-scale heavy rare earth separation in the U.S. remains largely untested. Recycling and third-party feedstock help on paper; long-term, secure supply is still aspirational.

Measured against history, chemistry, and geopolitics, USA Rare Earth’s 2030 targets are ambitious to the point of being historically unprecedented in the West. Reshoring 10,000 tonnes per annum of heavy rare earth metal and alloy capacity within four years would require compressing into a single half-decade what China built deliberately over three decades—under conditions of price control, state coordination, and learning-by-doing that no Western firm has yet replicated.

China today controls a near-monopoly over heavy rare earth refining—often cited at 90%+, and in many industry assessments 95–98% for the heaviest elements—not because others lack deposits (although Myanmar is ranked number one on the REEx rankings), but because separation chemistry, impurity control, solvent extraction mastery, and downstream metallurgical integration form one of the most complex industrial stacks in modern materials science. Against that backdrop, the probability that a first-of-a-kind U.S. platform reaches full 10,000 tpa of heavy REE metal output by 2030 is low. Partial success—phased ramp-ups and selective element production (Dy, Tb, Y before the full suite)—is far more realistic.

And yet, that reality does not diminish the strategic importance of the attempt. It clarifies it.

Food for Thought

USA Rare Earth should not be judged as a binary wager on perfection, but as a capability-building campaign. Even achieving 3,000–5,000 tpa of heavy rare earth metals and alloys, paired with 10,000 tpa of NdFeB magnets and early-stage swarf recycling, would materially shift U.S. and allied leverage in defense, semiconductors, and advanced manufacturing. The real question is not whether the United States can fully match China’s scale by 2030—it cannot—but whether it can break the monopoly, train the workforce, harden the chemistry, and establish a repeatable Western pathway within the next five to seven years as we have continuously emphasized.

If USA Rare Earth succeeds even imperfectly—alongside MP Materials, ReElement Technologies, and allied efforts onshore and abroad—the mission heads toward success in the coming decade. Because in heavy rare earths, resilience is not declared with press releases or price targets. It is built incrementally, painfully, and over time.  But we must remember the Chinese are not sitting still, rapidly moving to own the standards and the innovation downstream. And the U.S. industrial policy must factor in parallel research and development.

Yes, finally, heavy rare earth sovereignty is being taken seriously.

Themath—and the metallurgy—still have to catchup.

• China's official Rare Earth Price Index rose to 242.7 on January 26, 2026—more than 2.4× the 2010 baseline—signaling a structural repricing driven by tighter export controls, producer consolidation, and accelerating global demand for magnet-intensive technologies.
• Heavy and magnet-critical rare earths lead price momentum:
  • Terbium remains extremely tight at ¥13,950–14,350/kg
  • NdPr showed incremental strength to ¥677–697/kg for mixed oxide
  • Dysprosium softened slightly due to inventory normalization rather than weakening demand
• The index trajectory reinforces urgent supply chain risks for Western OEMs dependent on Chinese rare earths, particularly for high-performance permanent magnets used in EVs, wind turbines, defense, and aerospace—highlighting the critical need for ex-China processing, recycling, and manufacturing capacity.

China’s official Rare Earth Price Index (opens in a new tab) rose to 242.7 on January 26, 2026, according to data released by the Association of China Rare Earth Industry. The index—benchmarked to a 2010 base year of 100 and calculated from daily transaction averages across more than 20 Chinese rare earth producers—continues an upward trend that began in mid-2025. The pattern increasingly resembles a structural re-pricing rather than a short-term cyclical rebound.

Price Momentum: Heavy Rare Earths Lead

Product-level pricing confirms that heavy and magnet-critical rare earths remain the primary drivers, while light rare earths are broadly stable:

• Dysprosium (Dy) softened slightly:
  • Dy₂O₃: ¥6,245–6,305/kg (≈ $867–876/kg)
  • Dy metal: ¥7,730–7,830/kg (≈ $1,074–1,088/kg)
    This appears driven by short-term inventory normalization rather than weakening demand.
• Terbium (Tb) remains extremely tight:
  • Tb₄O₇: ¥13,950–14,350/kg (≈ $1,937–1,993/kg), underscoring continued scarcity in ultra-critical magnet inputs.
• Holmium (Ho) and Erbium (Er) prices were largely unchanged, signaling stable demand from specialty magnet, laser, and electronics applications.
• Neodymium–Praseodymium (NdPr) showed incremental strength:
  • Mixed rare earth oxide (Nd₂O₃ 75%): ¥677–697/kg (≈ $94–97/kg)
  • Nd-rich alloy: ¥825–845/kg (≈ $115–117/kg)
    Gains reflect sustained downstream magnet demand tied to EVs, wind turbines, robotics, and automation.
  • Note: The USA federal government established $110 per/kg for NdPr for MP Materials—the Trump administration has signaled that other companies may benefit from such a pricing floor.
• Gadolinium (Gd) products and samarium/cobalt-linked materials also firmed, reinforcing a key REEx theme: defense, aerospace, nuclear, and high-temperature magnet applications are exerting outsized pricing influence.

What the Index Is Signaling

At 242.7, the index implies that average rare earth prices are more than 2.4× their 2010 baseline, even before inflation adjustment. The steady climb since late 2025 aligns with:

• tighter export and compliance controls,
• consolidation among licensed producers,
• accelerating global demand for magnet-intensive technologies, and
• early signs of strategic and precautionary stockpiling.

Why This Matters for Western Markets

For U.S. and allied supply chains, the signal is unambiguous: China’s domestic pricing power is strengthening, particularly in Dy, Tb, NdPr, and mixed oxides essential for high-performance permanent magnets. OEMs dependent on spot or short-term contracts face rising cost volatility and supply leverage, while the index trajectory reinforces the urgency of ex-China processing, recycling, and magnet manufacturing capacity.

Disclaimer: This price review is based on data published by the Association of China Rare Earth Industry, a China-based, state-influenced industry body. Prices, FX assumptions, index methodology, and market interpretations should be independently verified using third-party, non-Chinese sources before being relied upon for investment, procurement, or policy decisions.

• Tim Willoughby's essay romanticizes Western mining history but overlooks the critical reality: rare earths require complex downstream processing, not just extraction, and China controls the separation, refining, and magnet production that truly matter.
• Mountain Pass Mine produces 16% of global rare earth concentrate, but most material historically went to China for processing—mining isn't the bottleneck, chemistry and manufacturing at scale are.
• The piece succeeds as cultural history but fails as supply-chain analysis, reinforcing a dangerous narrative that mining more solves America's structural dependency on Chinese-dominated rare earth processing and magnet supply chains.

When history becomes comfort food—and the supply chain slips away. Tim Willoughby’s essay (opens in a new tab) in Aspen Times is elegantly written, historically grounded, and deeply affectionate toward the mineral heritage of the American West. He recounts the arc of Western resource extraction: gold rushes, silver booms, copper’s rise with electrification, and the slow industrial layering of zinc, lead, molybdenum, tungsten, and uranium. These details are largely correct and thoughtfully narrated.

The American West and Mining go Hand in Hand

Some gaps are not in what the author reports, but rather in what is avoided. The article frames rare earth elements (REEs) as a continuation of a familiar Western mining story. That framing is comforting, literary, and incomplete.

The One Mine That Keeps Getting Mentioned

The Aspen Times piece correctly notes that the U.S. has a single major rare earth mine: Mountain Pass Mine. He also cites a widely repeated statistic—that roughly 16% of global rare earth production came from Mountain Pass in 2020. That figure is directionally accurate for mined concentrate, but it quietly masks the real dependency problem.

What is left unsaid: up until the Department of War made the capital injection, a good amount of the material was shipped to China for separation, refining, and magnet-grade processing. Mining is not the choke point. Chemistry at scale is. Magnets at scale are. And China dominates both.

When History Becomes a Hall of Mirrors

The essay’s long detour through Aspen, Leadville, borax, mercury, and silver photography is engaging—but it subtly implies that rare earths will follow the same pattern: discover, extract, adapt, prosper. That is speculation by analogy.

Rare earth elements and, for that matter, select critical minerals are not gold or silver. They are chemically complex, capital-intensive, environmentally constrained, and strategically controlled. The West’s historical agility in mining does not automatically translate into competitiveness in solvent extraction, separation trains, or sintered magnet manufacturing. An important point to ponder.

What’s Missing—and Why It Matters

Furthermore, there is no discussion of downstream processing, magnet supply chains, defense dependence, or industrial policy. No mention of China’s decades-long coordination between geology, chemistry, manufacturing, and vast amounts of allocated state capital. No acknowledgment that nostalgia is not a strategy. 

Of course, this omission isn’t malicious—but it is consequential. It risks reinforcing a media narrative that the U.S. simply needs to “mine more” to solve a far deeper structural challenge.

Why This Piece Still Matters

As cultural history, Willoughby’s article succeeds. As a supply-chain analysis, it stops short. And that gap is precisely why this piece is notable: it reflects how much of the Western conversation on rare earths remains anchored in the past while the real contest is happening downstream, offshore, and at an industrial scale.

Citation: Willoughby, T. “Minerals and the West.” News, Jan 25, 2026.

• The U.S. government plans to invest $1.6 billion in USA Rare Earth for a 10% equity stake at a $16 billion implied valuation—nearly 5× its current $3.45 billion market cap.
• The company currently has no revenue, $285 million in losses, and unproven midstream separation capabilities.
• The investment targets critical midstream gaps in rare earth processing, including separation, oxide-to-metal conversion, and alloy production.
• The U.S. remains heavily dependent on China for these processes.
• Execution risk of the investment now largely shifts to taxpayers, while existing shareholders capture disproportionate upside.
• Strategic concerns include technical challenges and the involvement of Cantor Fitzgerald, chaired by Commerce Secretary Howard Lutnick's son.
• More than $1 billion has been raised, raising transparency questions in a sector already shaped by industrial policy and national security imperatives.

According to reporting by Reuters, citing the Financial Times, the U.S. government plans to inject $1.6 billion into USA Rare Earth in exchange for a 10% equity stake, alongside a separate $1 billion private raise. If confirmed, this would rank among the largest direct federal equity interventions in the U.S. rare earth sector—following earlier stakes in MP Materials, Lithium Americas, and Trilogy Metals.

Officially, the deal is framed as “onshoring critical and strategic minerals essential to the semiconductor supply chain and U.S. national security.” Unofficially, it reflects a more urgent reality: the U.S. still lacks reliable midstream rare earth separation and refining capacity, and time is no longer on Washington’s side.

What the Money Is Likely For—And Why It Matters

Despite the headline focus on mining and magnet manufacturing, the real gravity of this investment sits between the mine and the magnet.

USA Rare Earth’s most acute challenges are not branding or demand—they are feedstock security, separation scale-up, and oxide-to-metal conversion. The company’s Sierra Blanca, Texas, deposit is heavy rare earth–leaning and technically complex, meaning consistent, economic production is not a given. Even if the ore performs as hoped, proving out midstream separation at commercial scale remains the gating risk.

This is where partnerships matter. The involvement of Less Common Metals is strategically notable. Oxide-to-metal and alloying capabilities are among the least replicated, most China-dependent segments of the supply chain. Funding will almost certainly be directed toward validating these steps on U.S. soil—because without them, magnets remain theoretical.

The Comparison Investors Should Make

Compared with MP Materials, which already operates an integrated mine-to-separation pathway at Mountain Pass (albeit still reliant on downstream partners), USA Rare Earth is considerably earlier in the execution curve. MP’s risk today is margin and geopolitics; USA Rare Earth’s risk is technical and operational proof.

Importantly, that distinction matters. Capital can accelerate timelines, but it cannot shortcut feedstock security, metallurgy, permitting, or workforce depth. $1.6 billion buys time—not certainty.

Politics, Proximity, and Perception

Investors should not ignore the optics. The reported role of Cantor Fitzgerald, (opens in a new tab) chaired by the son of Commerce Secretary Howard Lutnick, in raising over $1 billion in private equity invites scrutiny—even if no rules are broken. In a sector already shaped by a form of industrial policy, perceived conflicts matter almost as much as real ones. Transparency will be essential. Anything less risks undermining the very credibility Washington is trying to build around its rare earth strategy.

The Real Test Ahead

This deal, if finalized, signals seriousness. But seriousness is not the same as success. The U.S. rare earth problem is not capital alone—it is execution across geology, chemistry, and manufacturing. USA Rare Earth now has a rare asset: patience backed by public money. What it must deliver next is proof.

Follow the Money: What the Balance Sheet Really Says

At roughly $24–25 per share, USA Rare Earth carries a market capitalization of about $3.45 billion, up sharply from under $500 million earlier in 2025. Yet the fundamentals remain unmistakably pre-revenue and loss-making. The company reports no meaningful revenue, negative EBITDA of $39 million, and net losses of ~$285 million TTM, with a return on assets of –12%. Cash on hand ($258 million) is solid for now, and debt is minimal—but this is still a capital-consuming development story, not an operating business. In other words, today’s valuation is pricing in future execution across mining, separation, refining, and magnet manufacturing, not current cash flows.

Is Washington Overpaying—or Buying an Option?

If the reported deal is accurate—$1.6 billion for 10%—the implied valuation is ~$16 billion post-money, nearly 5× the current public market cap. On a pure financial basis, that looks rich—arguably very rich—for a company with no revenue, negative cash flow, and unproven midstream scale. But this is not a conventional financial investment. What the government would be buying is a strategic option: time, control, and a seat at the table in a fragile supply chain segment the U.S. cannot afford to lose.  Plus, the Trump administration would be able to, in theory, run a separate supply chain.  That said, even strategic capital should demand discipline.

At this implied valuation, execution risk shifts almost entirely onto the taxpayer, while equity upside disproportionately benefits existing shareholders.  And without a more comprehensive industrial policy of the type Rare Earth Exchanges™ has called for, such risks amplify. The burden is now on USA Rare Earth to prove that this capital converts into secured feedstock, working and scalable separation lines, oxide-to-metal capability at scale, and, of course, commercial magnets—not just a higher ticker.

Source

Reuters. US to inject $1.6 billion into rare earths miner for 10% stake, FT reports. Jan. 24, 2026.

• Governments across the U.S., Canada, Australia, Japan, and Europe invested over $3 billion in rare earth supply chains from January 2025 through January 2026, with the U.S. leading at $1.4 billion—marking an unprecedented shift toward reshoring and diversifying away from Chinese dominance.
• Despite record public funding, allied nations still lack a unified industrial strategy, with critical gaps in:
  
  
  
  • Permitting reform
  
  
  • Demand signaling
  
  
  • Workforce development
  
  
  • Integrated Five Eyes cooperation
  
  
  
  

  needed to compete with China's control of 85% of global refining capacity.

  
  
• China is aggressively consolidating its rare earth dominance through tightened export controls and industrial policy.
• Experts estimate the West needs $10-20 billion and systemic reform to build a resilient supply chain within five years, making the current window to act critically narrow.

Over the past year, governments around the world have dramatically increased their investments in rare earth supply chains in a bid to reduce reliance on China and secure critical materials essential for electric vehicles, wind turbines, and defense technologies.

From January 2025 through January 2026, the United States, Canada, Australia, Japan, and the European Union announced and allocated hundreds of millions of dollars toward mining, refining, and magnet production projects. This surge in public funding marks a pivotal shift toward reshoring and diversifying the rare earth ecosystem—once dominated by a single supplier—and signals a new era of industrial policy focused on strategic minerals.

hese figures reflect only government allocations and do not include substantial private capital being deployed, particularly in the United States, Europe, and Japan. Notably, Europe’s public investment lags far behind the scale and urgency demonstrated by the U.S., underscoring disparities in policy commitment across the allied industrial economies.

United States

Summary: The U.S. significantly expanded its rare earth element (REE) investment strategy through the Department of Defense and Department of Energy. Investments spanned upstream mining to downstream magnet production, with the Pentagon leading large-scale equity and loan programs.

Total Outlay: >$1.3 billion USD in direct awards, plus >$1 billion in pledged project financing

Canada

Summary: Canada emphasized long-term strategic capital through a newly established sovereign fund while directly committing to select R&D and international partnerships. Direct project spending included investments in REE processing and recycling, with several major financing commitments under review.

Total Outlay: ≈US$51.6 million (C$36.3M + US$25M), plus billions in declared critical minerals funding capacity

Australia

Summary: Australia aggressively expanded public financing of REE projects, especially around Arafura's Nolans project. Government support included equity stakes, loans, and grants. Australia has positioned itself as a major non-Chinese source of rare earths.

Total Outlay: ≈A$400 million in direct rare earth funding (≈US$260 million), with A$1B+ in new capacity announced in Jan 2026

Japan

Summary: Japan reinforced its whole-of-supply-chain strategy by increasing JOGMEC's funding and co-investing internationally. Major highlights include a joint heavy REE plant in France and a ¥39 billion reserve fund to support upstream projects overseas.

Total Outlay: ¥39 billion + €110 million (≈US$380–400 million combined)

Europe (EU & Key Member States)

Summary: Europe ramped up support for REE through the Critical Raw Materials Act and major national projects. While full funding disbursement is unfolding, key early investments focus on recycling and downstream capacity (e.g., magnets). Public funding remains fragmented and lower in volume relative to U.S. and Australian efforts.

Total Outlay: ~€3 billion earmarked; ~€150–200 million in confirmed REE project disbursements in 2025

Investment Table Sampling for last year.

Note, we include a sampling and may not capture all allocations.

USA

*not disbursed yet

** note pre-2025 Vacuumschmelze (VAC) has received significant U.S. public funding and financial support to establish a rare earth magnet manufacturing facility in Sumter County, South Carolina, through its U.S. subsidiary, e-VAC Magnetics.

***Niron Magnetics has received gov funding since at least 2022 and in 2025 a $52.2 million tax credit for non-REE magnets.

****Noveon Magnetics has received significant U.S. government funding, including over $11 million in federal contracts and nearly $30 million in federal grants as of early 2026, with specific major awards including a $28.8 million DoD agreement (around 2022) and a separate $35 million DoD award for developing domestic rare earth magnet sources, boosting their total federal support towards potentially over $70 million alongside private funding

Canada

*  Saskatchewan Research Council (SRC) receives significant public funds, primarily from the Government of Saskatchewan, as it is a Treasury Board Crown Corporation. It also receives funding from the Government of Canada.

Australia

Japan

* Carester's subsidiary, Caremag, secured up to €110 million in financing (equity & loans) from Japanese entities, the Japan Organization for Metals and Energy Security (JOGMEC) and Iwatani Corporation, as part of a larger €216 million funding package for their rare earth recycling plant in France. This Japanese investment, along with significant French government support, funds the construction of Europe's major rare earth refining facility. 

Europe

All USD values are approximate and based on the average 2025 FX rates.

Big Troubles Remain

While the past year has seen an unprecedented uptick in rare earth investment across the United States, Europe, Japan, and their partners, with America leading the way thanks to the Trump administration, the overall picture remains troubling.

These funding commitments, while politically meaningful, still fall short of a coherent industrial policy commensurate with the scale and complexity of the global rare earth challenge. In the United States, cumulative federal investments across mining, processing, and magnet manufacturing now exceed $1.4 billion, but remain fragmented among discrete grants, loans, and conditional programs. Coordination among the Department of Defense, Department of Energy, and Department of Commerce has improved—and recent senior hires in the administration signal progress in the right direction—but a unified national strategy has yet to emerge.

Missing are the essential pillars: accelerated permitting reform, durable demand signaling, broad-based pricing floors, guaranteed offtake, and sustained workforce development, which the administration really does not address as of yet (note this involves major recruitment drives for metallurgists, for example, from Turkey to Iran to central Europe). As REEx has consistently argued, competing with China also requires deep integration across the Five Eyes (opens in a new tab), Europe, Japan, and South Korea—an effort that must be far more deliberate, synchronized, and multilateral than current approaches allow.

In Europe, the gap is even wider. While the EU has announced multibillion-euro critical minerals initiatives, the actual disbursed funding to rare earth projects has been minimal in 2025, estimated at under $200 million. Europe’s industrial policy framework remains fragmented across member states, with few integrated projects targeting the full mine-to-magnet chain. As a result, EU industry continues to rely on imports of both separated oxides and finished magnets, often from China or Chinese-linked suppliers, thereby undermining its sovereignty ambitions. Europe is frankly being left out at this pace, except for midstream brilliance.  The continent has heavy rare-earth deposits in Sweden, for example, but not the political wherewithal to drive development.  But from an industrial standpoint, Europe has truly lost its way.

Japan, although strategically experienced and active in global partnerships, still faces severe exposure to Chinese export policy—especially for heavy rare earths like dysprosium and terbium. JOGMEC’s recent ¥39 billion reserve fund is promising, and the France-based Caremag refinery backed by Japanese capital is a key milestone. But these projects will take years to mature, and Japan has yet to secure diversified heavy REE sources at a meaningful scale.

The underlying issue is one of time and dependency. Despite over $3 billion in announced public funding across allied economies in 2025, actual supply chain security—particularly for heavy rare earths—remains years away. China continues to control over 85% of global refining capacity and dominates heavy REE markets through both production and export controls.

With no fully integrated, scaled alternative outside China yet online, the U.S., EU, and Japan remain highly exposed. Barring urgent, integrated policy interventions—such as demand aggregation, processing subsidies, and strategic stockpiles, Five Eyes, Japanese and European pact, and aggressive workforce moves—REEx analysts widely expect the next 3–7 years to carry acute vulnerability for defense and clean energy sectors dependent on rare earth components.

China is Not Sitting Still

No otherplatform tracks China’s rare earth activity with the depth, granularity, and consistency of REEx. While the West races to rebuild basic REE and critical mineral supply chains, China is not standing still. Behind the scenes, Beijing is rapidly recalibrating its next five-year planning cycles to tighten its grip on rare earth and critical mineral dominance. This includes intensified industrial policy across provincial and national levels—integrating rare earths into broader tech, commercial vertical, and defense strategies, accelerating consolidation among state-backed firms, and ramping up export control enforcement. China's clear objective: fully exploit its existing market power while shaping global pricing, standards, and downstream value chains to its long-term advantage.  The battle from the Chinese view moves to the downstream and into the innovation of tomorrow. Is the West ready for this?

Food for Thought

For America and its allies, the question is no longer whether to act—but whether they can act fast enough. Without a unified industrial strategy, committed funding at scale, and enduring political will, the West risks falling irreversibly behind in the most strategically vital resource contest of the 21st century.

About $1.4 billion in direct U.S. government investment is a start, but it falls far short of what’s needed to build a resilient, fully integrated rare earth supply chain within five years. Multiple industry estimates and internal government assessments suggest $10 to $20 billion (or even considerably more) in public and private capital would be required to:

• Establish commercial-scale mining, refining, and separation facilities (especially for heavy REEs)
• Build at least 3–5 domestic magnet plants with secure offtake firing on all cylinders
• Fund redundant processing capacity across allied nations (it will need to be publicly subsidized)
• Create a strategic reserve of refined REEs and magnets
• Deploy sustained demand guarantees, permitting reforms, and price-floor mechanisms
• Develop and sustain talent development and capture across the value chain
• Reassess current economic and geopolitical strategies—including tariff policies—and prioritize deeper integration among Five Eyes nations, the European Union, Japan, South Korea and Australia to build a unified, resilient critical minerals and rare earth element supply chain alliance

The U.S. and its partners have identified the vulnerability—but resilience will require sustained, multi-agency and multi-national coordination, private-sector alignment, and a long-term industrial policy with scale far beyond today’s fragmented investments and our own limited paradigm constraints. Without that, even well-intentioned projects will struggle to reach critical mass against China’s deeply entrenched dominance. The window to course-correct is narrow, and without bold, systemic action, the West risks ceding permanent control of one of the most strategically decisive sectors of the 21st century.

• Turkey's Beylikova rare earth deposit contains 694 million tons of ore, but the complex, low-grade polymetallic system faces major processing challenges without proven separation technology—the critical step China dominates.
• Eti Maden's 1,200-ton pilot plant produces mixed concentrate, not separated oxides; scaling plans to 570,000 tons by 2027 remain aspirational without solving midstream separation and magnet-grade refinement.
• Turkey's rare earth ambitions underscore a key investor lesson: geological abundance doesn't equal supply security—dominance requires control of separation, metals, and magnets, not just ore.

A report circulated by Nordic Monitor (opens in a new tab) and amplified across regional media casts Turkey as a rising rare earth contender stalled by foreign technology controls.  The core facts are solid. Turkey does host a very large, complex rare earth–bearing deposit in Beylikova, Eskişehir, anchored by state-owned Eti Maden (opens in a new tab) as Rare Earth Exchanges™ has reported.  Exploration totals—hundreds of drill holes, tens of thousands of samples, and an estimated 694 million tons of ore—are not in dispute. What matters for investors, however, is what kind of ore this is and what comes next.

Beylikova is not a clean bastnäsite or monazite story. It is a polymetallic, low-grade system intertwined with barite, fluorite, and thorium. That complexity raises costs, regulatory hurdles, and—most critically—processing risk.

See Rare Earth Exchanges’ “_Turkey’s Rare Earth Ambition—Promise and Projection._”

Pilot Plants Are Not Supply Chains

Turkey’s 1,200-ton-per-year pilot plant produces a mixed rare earth concentrate. That is an early milestone, not a commercial breakthrough. The hardest, most valuable step—individual oxide separation—remains unresolved. This is where the recent account is most accurate: separation chemistry, solvent extraction cascades, and magnet-grade refinement are closely guarded capabilities dominated by China and a small ex-China club (e.g. Lynas Rare Earths, MP Materials).

Plans to scale Beylikova to 570,000 tons of ore per year by 2027 should be read as aspirational engineering timelines, not bankable supply. Without proven separation, metal-making, and magnet integration, tonnage targets are political signals, not market ones.

Sovereignty Talk Meets Physics

Yes, Ankara’s insistence on “national control” over rare earths, echoed by Recep Tayyip Erdoğan and Energy Minister Alparslan Bayraktar, raises the level of interest. That rhetoric resonates domestically but collides with reality. Rare earth supply chains are not plug-and-play. Technology transfer is slow,conditional, and often incomplete—even amongallies.

Opposition claims that Turkey is preparing to “hand over” its rare earths to the United States appear overstated and political. No binding offtake or technology agreements are disclosed. At the same time, the government’s narrative understates how dependent Turkey remains on external know-how if it wants magnets, not just ore.

Why This Matters for the Global REE Market

Turkey’s situation reinforces a core lesson investors should internalize: geological abundance does not equal supply security. China’s dominance persists not because of ore alone, but because it controls separation, metals, and magnets, all the result of deliberate industrial policy over the last couple of decades.  Turkey may eventually join the producer map—but only if it cracks midstream processing and downstream manufacturing.

Until then, Beylikova is best understood as a long-dated option, not an imminent disruptor.

Profile: Eti Maden

Eti Maden (Eti Maden İşletmeleri Genel Müdürlüğü) is a Turkish state-owned mining and chemicals company and the undisputed global leader in boron. Founded in 1935 as Etibank and restructured in 2004, Eti Maden is headquartered in Ankara and owned by the Turkey Wealth Fund (opens in a new tab). It holds a government monopoly over borate mining in Turkey, which containsroughly 73% of the world’s known boron reserves, giving thecompany an estimated 60–61% share of the global boron market. Its core products include borax pentahydrate and decahydrate, boric acid, boron oxide, zinc borate, and ground colemanite, serving industrial markets ranging from glass and ceramics to agriculture and energy.

Eti Maden operates at a large industrial scale, employing around 6,000 people and producing more than 2.5 million tons of refined boron products annually across major facilities in Bandırma, Kırka, Emet, Bigadiç, and Kestelek. The company supplies over 10,000 customers in more than 100 countries across six continents.

Financially, it posted record revenue of approximately $1.32 billion in 2024, following reported 2023 revenues between roughly $1.0–1.8 billion depending on accounting scope, with operating income of ₺16.27 billion. Strategically, Eti Maden is leveraging its boron dominance to diversify into lithium recovery from boron-processing waste streams while shifting toward higher value-added boron products to reinforce Turkey’s position in advanced materials and energy-related supply chains.

Source: Nordic Monitor, Jan. 21, 2026

• China controls Africa's critical minerals supply chain through early-stage financing, construction, logistics infrastructure, and downstream processing capacity, capturing value while African nations export raw materials.
• The DRC, Zimbabwe, Guinea, and Zambia are China's strategic anchors, securing cobalt, lithium, copper, and bauxite through integrated investments from mine to port to refinery.
• The West cannot compete on mines alone; winning requires matching China's financing scale, building domestic processing capacity, and delivering faster project execution with credible ESG standards.

Africa is a resource superpower in the making—rich in lithium, cobalt, graphite, manganese, nickel, and rare earth elements (REEs) used in EVs, wind turbines, electronics, and defense systems. China’s advantage is not just “mines.” It is control of the chain: early access, financing, construction, offtake, and (most importantly) processing capacity—often outside Africa. The result is a supply system where many African countries export raw or semi-processed material and import higher-value products back at a premium.

Africa controls a disproportionate share of the world’s critical mineral endowment

Making the continent central to global supply chains for clean energy, advanced manufacturing, and modern electronics. Estimates commonly suggest that roughly 30% of global critical mineral reserves are located in Africa. The Democratic Republic of Congo alone accounts for more than 70% of known cobalt reserves, while the continent also hosts major concentrations of manganese, platinum-group metals, and chromium, alongside rapidly expanding lithium discoveries.

These mineral concentrations position Africa as a keystone supplier for the energy transition, electric vehicles, battery storage, hydrogen technologies, and high-performance electronics. In addition, Africa is estimated to hold approximately 15% of global rare earth element resources, further strengthening its strategic importance as demand accelerates for magnets, electronics, and defense-related technologies.

Taken together, Africa’s resource base gives it outsized influence over the future of critical mineral supply—provided extraction, processing, and governance challenges can be effectively addressed.

China’s playbook, end-to-end

1. Get in early (exploration + stakes + offtake):

China often enters at the exploration or “late exploration / early feasibility” stage—buying stakes in juniors, negotiating joint ventures, and securing offtake rights (sometimes with ROFR clauses). These arrangements can lock in future supply long before production.

2. Bring the money and the builders (banks + EPC):

Chinese policy banks and state-linked firms can finance projects others can’t—then deliver construction via Chinese engineering and procurement contractors. This compresses timelines and reduces dependence on Western capital markets.  Note Chinese firms are used to the so called “gratitude” payments early on—the ones Western firms traditionally avoid.

3. Control the exit route (ports + rail + logistics):

Mines are only as valuable as their export routes. China often pairs mining with logistics—railways, roads, ports, power—so the product reliably flows into Chinese trade networks.

4. Win the choke point (processing):

Processing and refining are where pricing power lives. One U.S. government framing cited in the book notes heavy U.S. import dependence and vulnerability in critical minerals supply chains, including rare earths. Even when African governments demand local beneficiation, Chinese firms may build partial processing (e.g., concentrate → intermediate chemical) while keeping the highest-value steps tied to China.

5. Outcompete on risk tolerance:

China can operate in harder places (political instability, fragile institutions), and is often more flexible on deal terms. That can be attractive for cash-strapped governments—but it also raises ESG and governance controversy.

Where China’s biggest bets are (by country)

1. Democratic Republic of Congo (DRC): cobalt + copper, now lithium

Why it’s strategic: DRC is the epicenter of cobalt and a top-tier copper producer—both essential for batteries and electrification.

China’s position: Deeply entrenched across industrial mines and trading channels.

Key names & projects (high level):

• CMOC Group Ltd (opens in a new tab) – Tenke Fungurume (opens in a new tab) (copper-cobalt)
• Zijin Mining – major copper exposure via Kamoa-Kakula stake (opens in a new tab) (with Ivanhoe)
• Multiple Chinese-backed mid-tier operators and traders feeding China’s cobalt/copper refining base

What to watch: Price leverage (flooding supply), renegotiation pressure from Kinshasa, and growing scrutiny over value capture.

2. Zambia: copper belt leverage, selective processing

Why it’s strategic: Zambia anchors the copper belt; copper is the backbone metal for grids, EVs, and electrification.

China’s position: Significant but more contested than DRC (Western miners remain active).

Key names & assets:

• CNMC – Chambishi mining/smelting footprint
• JCHX – Lubambe stake acquisition (opens in a new tab) (turnaround play)

ESG flashpoints: Historical labor controversies in Chinese-linked operations in Zambia have fueled union suspicion and periodic political backlash.

3. Zimbabwe: hard-rock lithium buildout (plus chrome/nickel)

Why it’s strategic: Zimbabwe became a key hard-rock lithium pipeline for China.

China’s position: Dominant in lithium mining investment.

Key names & moves:

• Huayou (opens in a new tab) – Arcadia/Prospect Lithium Zimbabwe; scaling intermediate processing
• Sinomine (opens in a new tab) – Bikita, plus refinery plans—see link. (opens in a new tab)
• Chengxin Lithium Group / Yahua Group / Tsingshan Holding Group – broader lithium positioning

Policy pressure: Zimbabwe and peers are tightening rules to push local processing—forcing some in-country conversion plants while still leaving high-value refining and cathode supply chains centered in Asia.

4. Guinea: bauxite (and Simandou iron logistics)

Why it’s strategic: Bauxite is critical for aluminum supply; Simandou matters for iron ore and logistics control.

China’s position: Very strong in bauxite export flows; heavy role in infrastructure buildout (rail/port).

Key names:

• SMB-Winning (consortium) – bauxite export engine
• Chalco – bauxite stakes
• Simandou consortium arrangements tie future export flows to Chinese-linked infrastructure

Controversy: Guinea illustrates the classic “export bulk raw material” trap—high volumes, limited domestic refining.

5. Mali: lithium in a high-risk jurisdiction

Why it’s strategic: New lithium supply front.

China’s position: Strong partner financing and offtake, despite political volatility.

Key names:

• Ganfeng – Goulamina lithium partnership (the Goulamina lithium project in Mali is one of the world's largest spodumene hard-rock lithium deposits and represents the 4th largest spodumene resource globally)
• Hainan Mining (opens in a new tab) – Bougouni financing link (via Kodal)

Watch: Security instability + sanctions risk + governancechange, all of which can disrupt timelines.

6. Tanzania: graphite + rare earths (Ngualla)

Why it’s strategic: Graphite is a battery anode staple; Ngualla is a notable REE development story. Note Shenghe Resources (China) now controls via Peak Rare Earth acquisition.

China’s position: Strong influence via offtake and equity stakes.

Key names:

• Shenghe – Ngualla rare earth project stake/offtake trajectory
• Chinese-linked interest across graphite projects

Strategic note: This is the pattern: secure future REE concentrate outside China, then route into processing dominance.

7. Madagascar: graphite + clay-hosted REEs

Why it’s strategic: High-quality graphite; a notable ionic clay rare earth prospect.

China’s position: Material in graphite; REE ambitions have faced local friction.

ESG sensitivity: Ionic clay REEs can involve damaging leaching methods—raising environmental opposition risks. Several companies are prospecting for rare earths in Madagascar, notably Energy Fuels Inc. (developing the large Vara Mada project) and Harena Metals, which focuses on the Ampasindava project for heavy rare earths, aiming for low-impact heap leaching and supporting U.S. supply chains. Other players include those previously involved with the Ampasindava area, like Tantalus Rare Earths (German) and potentially entities linked to Singapore's ISR Capital, though focus is now shifting towards these newer, well-funded efforts. 

8. Namibia: lithium policy pushback + China’s uranium footprint

Why it’s strategic: Critical minerals plus uranium.

China’s position: Strong in uranium (energy security); mixed in lithium due to export-ban enforcement and local pushback.

Flashpoint: Export of unprocessed ore controversies and licensing disputes show African governments can constrain Chinese operators when political will aligns.

Chinese companies heavily invest in Namibia's uranium sector, primarily China General Nuclear Power Group (opens in a new tab) (CGN), which owns the massive Husab mine (via Swakop Uranium) and has stakes in Rössing Uranium, while China Uranium Corporation (CNUC) (opens in a new tab) also explores uranium; for lithium, Xinfeng Investments (opens in a new tab) (a Tangshan Xinfeng subsidiary) operates processing plants and mines, though faced export challenges. 

9. Mozambique: graphite supply and “disruption risk”

Why it’s strategic: One of the world’s biggest graphite sources (and a strategic input for anode supply).

China’s position: Often indirect—through being the dominant buyer and financier of downstream chains.

ESG/political risk: Civil unrest and security issues can halt supply, reminding markets that “resource-rich” doesn’t mean “reliably shippable.”

Mozambique is emerging as a potential REE hub, driven by promising discoveries like Altona Rare Earths' Monte Muambe project (opens in a new tab) (Tete Province) and MRG Metals' (opens in a new tab) finds in Sofala, with exploration revealing significant REE-bearing minerals and potential for byproduct gallium, positioning the country to contribute to global supply alongside graphite and heavy mineral sands. Key ventures involve advanced exploration, resource definition, and developing local processing, with companies like Altona moving toward pre-feasibility studies and government interest in regional processing facilities, highlighting Mozambique's growing critical minerals sector. 

10. Nigeria + Ghana: early-stage critical minerals and illicit mining tension

Nigeria: Lithium/coltan potential with heavy informal trading dynamics.

Ghana: Bauxite ambitions collide with environmental and political resistance; illegal mining (“galamsey”) has created severe ecological damage and public anger—often linked in public discourse to foreign (including Chinese) actors.

Nigeria possesses significant REE potential, with large untapped deposits like monazite, but its REE mining is underdeveloped, characterized by informal small-scale operations and a lack of large-scale mines, hindered by poor data and funding. Rare Earth Exchanges has been developing relationships with local traders—intermediaries between the small mines and markets. The government is now aggressively pursuing development through major initiatives, including a new regional $400M processing plant, aiming to transform the sector, add value locally, and become a global player, addressing historical underinvestment and illegal mining issues.  Rare Earth Exchanges has some significant questions about the processing plant.

Note a mention for an important REE mine for the USA under construction in Angola—sponsored by Pensana Plc traded via the London exchange. The company plans on benefiting from the Lobito Corridor project.  The Lobito Corridor is a major African infrastructure project centered on a railway and port connecting the Atlantic coast of Angola (Port of Lobito) to the mineral-rich Copperbelt regions of the Democratic Republic of Congo (DRC) and Zambia, serving as a crucial trade route for critical minerals like cobalt and copper, and agricultural goods, supported by the EU, US, and African Development Bank to boost regional integration and global trade. 

Lobito Corridor

Why China is so hard to beat (for the U.S. and the West)

• Financing scale + patience: China can fund projectsthrough downturns and treat supply security as strategic, not purelycommercial.  Gratitude payments are readily available.
• Build + operate capability: Chinese firms show up with EPC, workforce, equipment, and sometimes the logistics plan.
• Processing dominance: The West can “win a mine” and still lose the war if the product must be processed through Chinese-controlled capacity.
• Offtake discipline: China locks in volume early, leaving rivals competing for leftovers—or paying higher prices later.
• Political flexibility: Fewer governance conditions can make deals easier to sign—though this can create backlash when contracts look opaque or extractive.

ESG disruptions: where projects can break

ESG issues are not “side stories”—they are operational risk:

• Environment: river pollution, tailings mismanagement, forest encroachment, unsafe chemical handling, dust impacts near bauxite corridors.
• Labor: wage disputes, safety incidents, community tensions, weak grievance mechanisms.
• Governance: opaque contracting, allegations of bribery, and nationalist backlash when value-add stays offshore.

Bottom line: the West often tries to compete on “higher standards,” but that can slow projects and raise costs—while China competes on speed, financing, and integration. The winning model in Africa likely blends both: credible ESG + bankable execution + real downstream capacity.

Country-by-country snapshot table (condensed)

Final Point

China’s Africa advantage is best understood as a system, not a set of mines. It is early access + financing + construction + logistics + offtake + processing dominance. The U.S. and allies can compete—but only if they pair capital and ESG credibility with real downstream capacity (processing, separation, magnet supply chains) and faster project execution. Otherwise, Africa will keep exporting raw value while China captures the margin.

• The U.S. paused a broad Commerce Department import ban on Chinese drones in January 2026, but FCC restrictions blocking new Chinese drone certifications remain active—reflecting a calibrated containment strategy rather than outright capitulation.
• China's near-monopoly on rare earth magnet production (85-90% globally) and drone manufacturing (DJI holds 75-80% of U.S. market share) gives Beijing structural leverage that constrains American policy options on technology bans.
• Until the U.S. builds domestic rare earth processing and magnet manufacturing capacity, drone policy—and broader tech independence—will remain hostage to Chinese supply chains, making pragmatic restraint a necessity, not weakness.

A January 19, 2026 opinion piece (opens in a new tab) in The National Interest by Brandon J. Weichert argued that President Donald Trump quietly eased off a proposed ban on Chinese drones because Beijing holds decisive leverage through rare earth dominance. The claim is provocative—and partially correct—but the framing deserves scrutiny. Below, we strengthen that analysis with verified details on what actually happened with the drone ban and why rare earth supply chains constrain U.S. policy.

The Part That’s Solid: Drones Ride the Rare Earth Spine

It is accurate that modern drones—especially commercial and dual-use platforms—depend on rare earth magnets and materials, a supply chain largely controlled by China. Most small drones use brushless electric motors that require high-performance NdFeB permanent magnets containing neodymium, praseodymium, and often dysprosium (a heavy rare earth for heat resistance).

China dominates both drone manufacturing (Chinese firms like DJI account for an estimated 80–90% of global drone production) and rare earth magnet supply, producing roughly 85–90% of the world’s rare earth magnets. This near-monopoly includes about 98% of processing capacity for heavy rare earth elements like dysprosium and terbium, which are critical for high-end magnets. In short, Chinese control of rare earth refining and magnet production gives it structural leverage over any industry that relies on these components – and drones ride on that rare earth backbone.

Chinese drone maker DJI’s dominance in the U.S. market exemplifies this leverage. DJI and other Chinese manufacturers offer integrated supply chains that Western rivals struggle to match on cost or scale. By 2025, DJI alone controlled roughly 75–80% of the U.S. drone market, far ahead of any competitor. This share is echoed by the fact that headlines often single out DJI in U.S. policy actions simply because of its market dominance. The National Interest op-ed is on firm ground, pointing out that China’s rare earth and manufacturing grip translates into real advantages for Chinese drone firms in the U.S. market.

Where the Narrative Overreaches: “Blinking” vs. Selective Containment

The op-ed frames Trump’s decision as a unilateral “blink,” implying Washington capitulated wholesale to Beijing. That is overstated. In reality, U.S. authorities have taken a more nuanced, two-pronged approach – pausing one measure while enforcing others – that amounts to selective containment rather than surrender.

Commerce Department Rule (Paused)

It’s true that the U.S. Department of Commerce withdrew a proposed rule in early January 2026 (opens in a new tab) that would have imposed broad restrictions on Chinese-made drone imports. This draft rule, first floated in late 2025, aimed to ban or limit imports of drones from China (and Russia) on national security grounds, amid fears that adversaries could exploit backdoors or “poison-pill” technology to disrupt drones mid-flight. Had it gone through, it might have even jeopardized the use of existing drones in U.S. fleets. However, Commerce never opened the proposal for public comment and quietly shelved it before finalization. Records indicate interagency discussions up through Dec. 19, 2025 – including a meeting with DJI representatives – after which the rule was pulled. The op-ed is correct that this retreat removed the threat of a sweeping import ban. But characterizing it as Trump “blinking” omits context: according to Reuters, the timing likely had as much to do with broader diplomatic strategy (avoiding inflaming tensions before an April 2026 Trump-Xi summit) as with fear of Chinese retaliation.

FCC Restrictions (Active)

Crucially, separate measures remain firmly in place. In December 2025 – just as Commerce was wavering – the Federal Communications Commission enacted rules as reported by Rare Earth Exchanges™ that block new foreign-made drones from U.S. markets by denying them radio frequency equipment certifications. The FCC added DJI and other unmanned aircraft systems to its “Covered List,” meaning no new models from those companies can receive the FCC equipment authorization required for sale. In practice, this freezes major Chinese manufacturers out of introducing new drones in the U.S. (since virtually all drones need FCC-approved radios to operate legally). Existing models that were already approved, however, are grandfathered in – they can still be sold and flown, and current drone fleets aren’t grounded. This approach targets the future supply without yanking current drones out of service.

A Calibrated Policy

Together, these actions illustrate a calibrated policy: the most draconian option (an outright import ban) was put on hold, but a tough restriction on new products remains. Even Brandon Weichert’s op-ed acknowledges that “other parts of the ban remain active, especially those from the FCC,” which focus on blocking new drone certifications while allowing existing models to continue operating. Describing Washington’s move as a pure cave-in misses this nuance – the administration has not given Chinese drones free rein, but is instead enforcing a slower choke on them. One might call it a partial blink, but it’s certainly not a full surrender.

Moreover, the article’s sensational insinuation of “poison-pilled” consumer drones (i.e. Chinese drones laced with hidden kill-switches or spyware) goes beyond publicly available evidence. Yes, U.S. officials are concerned about data security and sabotage via foreign drones – the Commerce proposal itself was driven by fears that Chinese-made drones could send data to unauthorized servers or even be remotely disabled by an adversary. And China has been accused of embedding malicious chips in other exports (the op-ed cites recent claims of Chinese-made solar inverters and other gear containing spyware). However, to date no hard proof has been presented publicly that DJI or other Chinese drones sold in the U.S. have such “kill switch” hardware. The op-ed leans on this dramatic possibility without evidence, which clouds the very real (but more mundane) issue: the U.S. reliance on Chinese technology and components. In short, the national security rationale for oversight is valid, but some of the more extreme assertions in the article remain speculative.

What’s Really Happening: Policy by Constraint, Not Cowardice

If Trump “blinked,” it wasn’t out of personal weakness but because of industrial reality. From a rare earth supply chain perspective, the U.S. faces a hard truth: a ban on Chinese drones, enacted too quickly, would cripple many sectors long before American alternatives could fill the gap. This is a classic case of policy being constrained by material dependencies.

Consider who uses these affordable Chinese drones today: farmers monitoring crops, construction firms surveying sites, police and firefighters for search-and-rescue, infrastructure inspectors, and countless small businesses. These users rely on DJI and similar drones because they offer advanced capabilities at prices no domestic supplier has matched. Yanking those products off the market without replacement would leave a huge capability gap. The Commerce Department appeared to recognize this; its pulled rule would have even prevented continued use of existing drones, an outcome that likely raised alarms among industry and government end-users. In contrast, the narrower FCC tactic avoids immediate operational disruption while still sending a message to China.

The pause also gives Washington time to nurture domestic options. Over the past few years, the U.S. government has started investing in American and allied drone companies (and the supply chains behind them) to reduce dependence on Chinese tech. For example, the Pentagon’s Blue UAS program curates a list of non-Chinese, NDAA-compliant drones approved for government use – including models from U.S. firms like Skydio and Teal, France’s Parrot, and others. The FCC even carved out an exemption so that drones on the Defense Department’s Blue UAS list are not blocked by the Covered List rules. However, these alternatives have not yet achieved the cost or scale to compete broadly with DJI in the commercial market.

Notably, Skydio (a leading U.S. drone maker) pivoted away from the consumer drone market to focus on enterprise and military sales, leaving hobbyists and many commercial users with few options. In 2023 and 2024, several U.S. states (e.g. Florida) and federal agencies also banned Chinese drones for official use, forcing public safety agencies to seek replacements – a transition that has proven slow and costly. All this underscores that a supply crunch would occur if Chinese drones vanishedovernight.

Put simply, the administration’s restraint reflects the fact that you cannot easily ban what you cannot readily replace. Until the U.S. and its allies rebuild competitive supply chains – not just for drones, but for the critical components like batteries, sensors, and especially magnets that drones require – any sweeping ban would amount to shooting oneself in the foot. Trump’s team didn’t so much blink as take a pragmatic pause. The op-ed interprets this as kowtowing to Beijing; an alternate view is that Washington is buying time to realign its industrial capacity before cutting the cord.

The Rare Earth Angle the Article Misses: It’s About Magnets, Not Drones

The National Interest piece correctly identifies rare earth minerals as the linchpin of China’s leverage, but it glosses over which part of the supply chain is most critical. The deeper issue is not about drones per se – it’s about magnets. Without secure domestic production of NdFeB magnets (and the processed oxides and alloys that go into them), U.S. drone policy will continue to face hard limits.

To illustrate: Even if Congress threw billions of dollars at American drone startups tomorrow, those companies would still need to source key components. The high-performance magnets for motors would likely come from China’s supply chain. The same goes for other electronics like controllers and cameras where Chinese manufacturing dominates. This is why rare earth experts emphasize that unless and until the U.S. builds out its own magnet manufacturing and rare earth processing capacity, policies like drone bans only address the symptoms, not the underlying dependency. Currently, China controls nearly 90% of global rare earth refining capacity and magnet production. The U.S. has zero commercial capacity to process heavy rare earths at scale – a near-total reliance that has persisted for decades.

There are some signs of progress: companies like MP Materials (reviving rare earth mining and refining in California), Energy Fuels (processing small batches of rare earth carbonate in Utah), and magnet startups like Noveon Magnetics and VAC (planning U.S.-based magnet factories) are trying to close the gap. The U.S. government is also funding projects to develop a domestic supply chain. However, these efforts will take years to scale. The Rare Earth Exchanges analysis would thus encourage readers to see the drone decision not as an isolated event but as one consequence of a decade-long industrial deficit. Had the U.S. already secured independent rare earth and magnet supplies, the policy choices might look very different.

In short, the op-ed’s alarm that China has America “over a barrel” on rare earths is justified. But focusing on one drone ban misses the forest for the trees: the real long-term challenge is achieving supply chain resilience so that any future tech ban – whether drones, EV motors, or missiles – doesn’t crash into the same materials wall.

The Status of the Drone Ban (2026) – A Balanced Reality

As of early 2026, what is the net effect of U.S. policy on Chinese drones? In summary:

No blanket import ban

The Commerce Department’s proposed import ban on Chinese drones was withdrawn before implementation. There is currently no broad prohibition on importing or using Chinese drones in general. Headlines suggesting Trump “dropped the ban” are accurate in that sense.

FCC ban on new models

Yes, new Chinese drones are effectively banned from entering the U.S. market via the FCC certification process. Since late Dec 2025, companies like DJI cannot obtain FCC equipment authorizations for any new drone or drone component, which prevents new product sales. Consumers can still buy and fly older models that were already approved (you can find DJI’s existing lineup on sale as of January 2026), but future models like DJI’s next-gen drones won’t be available unless policies change.

Ongoing agency and legislative restrictions

Independent of these two measures, various U.S. government bans remain in place. For instance, the Department of Defense has banned procurement of Chinese-made drones since 2020 (by law, DoD cannot buy or use DJI drones), and the Department of the Interior grounded its fleet of Chinese drones in 2020 due to security concerns. Several states (such as Florida) now bar public agencies from using Chinese drones. Additionally, DJI was added to the U.S. Entity List in 2020, restricting exports of U.S. technology to DJI. These actions underscore that the U.S. government – across both the Trump and prior administrations – has been growing increasingly wary of Chinese drones. The paused Commerce rule was part of that continuum, not an isolated whim.

In essence, Trump didn’t “blink” so much as he narrowed his gaze. The administration is still keeping Chinese drone giants at arm’s length, but doing so through targeted measures that mitigate blowback on American users. The status quo is a kind of holding pattern: existing drones okay (for now), new drones not allowed – all while the U.S. scrambles to build capacity to one day end reliance on Chinese supply chains.

REEx Take: Constraint Isn’t Cowardice

Brandon Weichert’s article was right to spotlight China’s rare earth stranglehold, but it framed U.S. policy restraint as weakness or “cowardice.” A more nuanced interpretation is that Trump ran into the brick wall of physics, metallurgy, and supply chains. Rare earth dominance is indeed Beijing’s trump card – a reality decades in the making – and no executive bravado can wish thataway overnight.

Rather than a capitulation, the mixed outcome on the drone ban reflects a strategic triage: address the most urgent security risks (halt future Chinese drone entries) without collapsing current capabilities, and buy time to fix the supply chain vulnerabilities. Washington’s challenge is to accelerate efforts to produce things like magnets at home, so that in the future it can act decisively without shooting itself in the foot. Until that happens, expect more of this calibrated approach.

In the end, Trump didn’t truly “blink” – he flinched at the cost of going in half-cocked. The op-ed’s narrative of a weak retreat misses that the U.S. is constrained by its dependence on Chinese materials. Until America and its allies patch the rare earths and magnet gap, drones (and many other technologies) will remain hostages to this underlying supply chain reality. What looks like caution is, in fact, cold-eyed realism about the current balance of power in critical minerals.

Sources:

• Brandon J. Weichert, “Why Trump Blinked on a Chinese Drone Ban,” The National Interest, Jan. 19, 2026.
• Stephen Pope, “US drops Chinese drone import ban, but DJI still impacted,” AeroTime, Jan. 13, 2026.
• Reuters: “China expands rare earths restrictions, targets defense and chips users,” Oct. 10, 2025.
• Rare Earth Exchanges analysis, Dec. 15, 2025: “Drones Soar on Rare Earth Magnets: Market Growth and Supply Chain Shifts”.
• Wired, “Are DJI Drones Still Banned?” Jan. 19, 2026.
• ElectroIQ tech stats (2025): DJI holds ~80% of U.S. drone market.

• MP Materials benefits from Pentagon partnership with $110/kg NdPr price floor and $500M Apple deal, positioning it as strategic U.S. rare earth infrastructure despite execution risks.
• While government support provides a demand anchor, MP faces challenges ramping separation and magnet manufacturing at scale while competing against China's vertically integrated dominance.
• Investors should view MP as a policy-levered buildout story rather than a mature cash-flow generator, demanding clarity on capex timelines, China competition, and dilution safeguards.

MP (NYSE: MP) involves  policy-backed rare earth magnet independence, as well as the charts. This is a Pentagon-backstopped NdPr floor. And consequently, James Hire writing for Motley Fool argues the company still has “room to run” in 2026, citing U.S. government support, a 10-year NdPr price floor of $110/kg, and momentum after a strong 2025 rally.

Rare Earth Exchanges™ agrees that the security factor is now the core differentiator: the U.S. is actively rebuilding a domestic rare earth supply chain, and MP is being treated as strategic infrastructure—critical for defense, drones, precision munitions, and the broader industrial base.  Remember, the Pentagon now has ownership in this asset.

What’s Accurate—and What Reads Like Promotion

Several elements of the Motley Fool analysis are factually sound and deserve acknowledgment. MP Materials does benefit from a structurally significant U.S. Department of Defense partnership that includes a long-term NdPr price floor, an offtake framework designed to anchor demand, and direct government equity participation—an extraordinary signal of national security priority. In addition, the company’s $500 million partnership with Apple, centered on recycled rare earth magnets and the expansion of U.S.-based magnet manufacturing, reinforces MP’s strategic relevance within a reshoring and circular-supply narrative.

That said, the bullish framing carries notable omissions. A “guaranteed market price” does not equate to guaranteed profitability. MP Materials still faces meaningful execution risk as it ramps separation, metals, and magnet manufacturing, with cost control and commissioning timelines yet to be proven at scale. This is a serious risk Rare Earth Exchanges™ will be monitoring closely. Moreover, the analysis understates the depth of China’s vertically integrated dominance—from mining and separation through metals and finished magnets. MP is clearly building toward that end-state with government support, but it has not yet closed the structural gap, and investors should not confuse strategic intent with operational completion.

Fundamentals + Technicals: Policy Optionality vs Earnings Visibility

As of Jan. 16, 2026, MP traded around $69 with ~$12B market cap and high volatility after a wide 52-week range.

Motley Fool’s own “quote” data shows negative/weak profitability metrics—investors should treat MP as a policy-levered buildout story, not a mature cash-flow compounder.

REEx Critical Questions Investors Should Demand Answers To

• What’s the timeline and capex risk to full U.S. magnet-scale (and commissioning milestones)?
• How will the company truly overcome the Chinese monopoly over heavy rare earth element mining and refining?
• How durable is the economic moat once China adjusts pricing or policy?
• What safeguards exist to prevent taxpayer-backed upside from becoming investor dilution?

• Saudi Arabia's Ma'aden unveils a $110 billion decade-long minerals investment plan.
• The plan includes moving beyond traditional dig-and-ship mining to build a vertically integrated processing system.
• This strategy challenges China's rare earth dominance.
• The Kingdom is positioning itself as a strategic bridge between China's processing monopoly and Western supply chain rebuilding.
• Efforts involve partnerships, domestic refining capacity, and policy reforms.
• Policy reforms include tax cuts from 45% to 20%.
• Ma'aden's market cap surged to $73.8 billion.
• This growth included a 24.4% revenue increase and 127% earnings growth year-over-year.
• The company is backed by 63.9% ownership from Saudi's Public Investment Fund.
• Minerals are now treated as strategic infrastructure rather than commodity exports.

Saudi Arabia’s state-backed mining champion, Ma’aden (opens in a new tab), has unveiled an $110 billion, decade-long minerals investment plan. But describing it as “mining investment” misses the deeper story. What is unfolding in the Kingdom is not a resource boom—it is the construction of a vertically integrated minerals operating system, deliberately designed to capture value across exploration, processing, policy, and geopolitics.  Saudi Arabia wants to be able to take on China as a rare earth element and critical mineral processing hub.

For rare earths and critical minerals investors, this matters far beyond the Arabian Peninsula.

From Dig-and-Ship to Strategic Infrastructure

The familiar mining model—discover, extract, export—still dominates much of the world. It works, but it caps value at the port. Saudi Arabia is explicitly rejecting that ceiling. Instead, it is treating minerals as strategic infrastructure, not a standalone sector.

Recent partnerships illustrate the shift:

• Rare earth refining joint venture aligned with U.S. defense supply chains, structured so Ma’aden holds majority ownership.
• Exploration alliances importing Australian geological expertise at scale.
• Equity stakes in global base metals platforms, securing long-duration exposure to nickel, copper, and cobalt across top-tier jurisdictions.

This is not opportunistic dealmaking. It is system design—coordinating discovery, processing, capital, and offtake under one national framework.

What Holds Up Under Scrutiny

Several claims withstand close inspection. Saudi Arabia has materially improved market access through a new mining law, slashing headline tax rates from 45% to 20%. Exploration activity has surged. The state has clearly designated Ma’aden as a national champion, with multiple large-scale projects in the pipeline.

Saudi Public Investment Fund—Majority Shareholder

Most importantly, the emphasis on domestic processing and refining reflects a hard-earned lesson the West is still absorbing: in rare earths, separation, refining and seamless integration to magnet, assembly and component manufacturing—not mining—defines power. China’s leverage comes from chemistry and scale, not just ore.

Where Enthusiasm Outruns Evidence

That said, some assumptions deserve caution. Scaling processing—especially rare earth separation—is technically complex, capital-intensive, and environmentally sensitive. Partnerships alone do not guarantee execution. Nor does lots of capital and policy alignment eliminate market risk. Saudi Arabia is assembling the pieces, but industrial integration takes time, and rare earths are among the hardest materials to master.

There is also an implicit geopolitical bet: that allied supply chains will prioritize Saudi-based processing. That remains a strategic aspiration, not a settled outcome. Afterall companies in the U.S. are also working furiously to offer refining capacity from MP Materials and Energy Fuels to ReElement Technologies and USA Rare Earths, not to mention Lynas Rare Earths (Australia/Malaysia) and others.

Why Rare Earth Investors Should Pay Attention

What’s notable is not the $110B figure—it’s the intent. Saudi Arabia is positioning itself between China’s processing dominance and Western industrial rebuilding, offering capital, policy coherence, and geopolitical alignment.  Given the nation’s deep pockets and commitment to a diversified economy, strong, organized government and pedigree with petroleum, they should be taken seriously.  But the timeline will very likely be substantial.

Minerals have crossed a threshold. They are no longer inputs. They are constraints. And Saudi Arabia is acting accordingly.

Profile

Saudi Arabian Mining Company (Ma'aden) is showing clear signs that scale-up is translating into financial momentum. Market capitalization has risen to approximately SAR 277B (≈ $73.8B), up from about SAR 176B (≈ $46.9B) less than a year earlier, reflecting growing investor confidence in Ma’aden’s expansion strategy and its role in Saudi Arabia’s minerals agenda.

Operating performance is strong: trailing twelve-month revenue reached SAR 37.9B (≈ $10.1B) with 24.4% year-over-year revenue growth, while earnings growth has accelerated sharply, with quarterly earnings up 127% YoY. Operating fundamentals are solid for a capital-intensive miner—operating margins near 29% and EBITDA of ~SAR 14.2B (≈ $3.8B) point to improving efficiency as new assets ramp. The stock’s low beta of 0.32 and +45% 52-week performance suggest Ma’aden is increasingly viewed as a strategic infrastructure platform rather than a purely cyclical commodity producer.

That confidence comes with elevated expectations. Valuation metrics are rich: a trailing P/E of ~46x and EV/EBITDA above 21x place Ma’aden at a premium to traditional mining peers, implying that investors are pricing in long-duration growth, downstream processing value, and geopolitical relevance rather than near-term yield. Leverage is notable but manageable, with total debt of ~SAR 35B (≈ $9.3B) versus operating cash flow of ~SAR 11.4B (≈ $3.0B), a current ratio of 1.59, and positive levered free cash flow of ~SAR 3.9B (≈ $1.0B) supporting continued expansion without immediate liquidity stress.

The absence of a dividend reinforces the reinvestment thesis: capital is being recycled into growth and capacity build-out. Taken together, the financial profile depicts a company evolving from a conventional miner into a state-backed growth and processing champion, where valuation hinges less on today’s multiples and more on execution of Saudi Arabia’s long-term minerals strategy.

The largest shareholder of Ma'aden is the Public Investment Fund (opens in a new tab) (PIF), the Saudi sovereign wealth fund, holding a significant majority, around 63.9%, with other major institutional holders including The Vanguard Group, BlackRock, and Geode Capital Management, though their stakes are considerably smaller.

• Yttrium is a critical rare earth element essential for jet engines, semiconductors, and clean energy.
• As of January 2026, severe supply constraints exist due to China's export controls, which collapsed U.S. imports and caused European prices to surge dramatically.
• China dominates over 90% of global yttrium production and processing, primarily from ion-adsorption clay deposits.
• The U.S. relies entirely on imports for yttrium, with minimal production elsewhere, exposing fragile supply chains for defense and technology applications.
• New yttrium sources in Australia, the U.S., South Africa, and the Nordics show promise but are not expected to materially impact supply until the late 2020s.
• This situation leaves a critical 3-year gap, necessitating strategic stockpiling, recycling innovation, and accelerated processing capacity development.

Yttrium (Y, atomic number 39) is a silvery metal few people recognize by name, yet it underpins some of the most advanced technologies in modern life. From jet engines and missile guidance systems to semiconductors and clean-energy infrastructure, yttrium plays a role that is both essential and hard to replace. As of January 2026, it is also one of the most supply-constrained critical minerals in the world.

What Is Yttrium — and Is It a Rare Earth?

Yes. Yttrium is classified as a rare earth element, grouped with the 15 lanthanides along with scandium. Chemically, yttrium behaves like the “heavy” rare earths, even though it sits slightly apart on the periodic table. Despite the name, yttrium is not geologically rare—it is more abundant in Earth’s crust than silver—but it is economically rare because it is difficult to extract and refine.

Yttrium is almost never mined on its own. Instead, it is produced as a byproduct of heavy rare earth mining, typically recovered as yttrium oxide (Y₂O₃), also known as yttria.

Where Is Yttrium Mined Today?

The global yttrium supply is overwhelmingly concentrated in China, with a secondary contribution from Myanmar. Most yttrium comes from ion-adsorption clay deposits in southern China—geologically unusual ores that are rich in yttrium and other heavy rare earths such as dysprosium and terbium.

Outside of China and Myanmar, production is minimal:

• Small byproduct volumes from monazite sands in India and Brazil
• Pilot-scale or early-stage output in Australia
• No meaningful production in the United States

The U.S. currently relies on imports for 100% of its yttrium supply, and until recently, more than 90% of that material originated in China.

Why Yttrium Is So Important

Yttrium earns its “critical mineral” status because it enables technologies that cannot easily function without it.

Defense & Aerospace

• Essential to thermal barrier coatings for jet engines and military aircraft (yttria-stabilized zirconia)
• Core component of high-power lasers (e.g., YAG lasers) used in targeting, range-finding, and missile defense
• Used in radar, microwave filters, and secure communications

Semiconductors & Electronics

• Yttrium oxide is used as a protective ceramic coating in semiconductor fabrication equipment, resisting corrosive plasmas
• Critical in high-frequency electronics, microwave components, and specialized optical devices
• Semiconductor manufacturers have ranked yttrium shortages among their most severe materials risks

Clean Energy & Industrial Systems

• Key material in gas turbines for power generation
• Used in solid oxide fuel cells and oxygen sensors
• Improves high-temperature ceramics, superconductors, and specialty alloys

In many of these applications, substitutes either do not exist or result in worse performance, shorter lifetimes, or higher costs.

Who Dominates Processing?

China not only mines most of the world’s yttrium—it also dominates processing and separation, which is the true choke point. Rare earth refining is chemically complex, environmentally sensitive, and capital-intensive. Over decades, China built a vertically integrated system that includes mining, separation, metalmaking, and downstream manufacturing.

Today, most Chinese yttrium production is consolidated under large, state-directed rare earth groups. Outside China, commercial-scale heavy rare earth separation remains extremely limited, though this is beginning to change.

Promising Deposits Outside China

Several non-Chinese sources show real potential but are not yet fully online:

• Australia: Ionic-clay and heavy rare earth projects with unusually high yttriumcontent
• South Africa: Recovery of yttrium and other rare earths from historic mine tailings
• United States (Texas): Large polymetallic deposits containing yttrium alongside lithium and heavy rare earths
• Nordics (Sweden, Norway): Newly identified rare earth resources that include yttrium

These deposits demonstrate that geology is not the problem; time, permitting, capital, and processing capacity are.

So to summarize promising non-Chinese yttrium sources from Japan's significant deep-sea rare earth deposits near Minami Torishima to Western Australia's North Stanmore project (Victory Metals) to Kazakhstan's new large find in the Karaganda region to the established players like Australia's Mount Weld (Lynas) and the US's Mountain Pass (MP Materials) involving heavies, with efforts in India and Greenland (Tanbreez) also showing potential for future supply diversification. 

Why Is There a Shortage in January 2026?

The current shortage traces back to China’s 2025 export controls, which included yttrium among several restricted rare earths. While Chinese domestic prices remained relatively stable, exports slowed sharply, licenses became harder to obtain, and overseas buyers were effectively cut off.

The result:

• Exports to the U.S. collapsed
• European spot prices surged dramatically, in some cases by orders of magnitude

compared with early 2025

• Manufacturers began hoarding inventory
• Aerospace, semiconductor, and energy firms flagged yttrium as a potential production bottleneck

This was not a demand shock—it was a policy-driven supply shock, exposing how little buffer exists outside China. A key point Rare Earth Exchanges™ has been declaring since this platform’s launch in October 2024.

What Can Be Done About It?

The yttrium shortage has triggered a rapid response across governments and industry:

1. Build Processing Capacity Outside China
   New separation facilities in the U.S., Europe, and Australia are under development, including projects capable of handling heavy rare earths like yttrium.
2. Accelerate Non-Chinese Mining Projects
   Governments are fast-tracking permits, offering financing support, and treating rare earth projects as strategic infrastructure.
3. Recycling and Secondary Recovery
   Historically negligible, yttrium recycling is gaining interest due to high prices—particularly from industrial waste streams and end-of-life electronics.
4. Strategic Stockpiling
   Defense agencies and manufacturers are reconsidering “just-in-time” supply models for critical minerals.
5. Efficiency, Not Substitution
   True substitutes are rare, so innovation is focused on using less yttrium per unit, not eliminating it.

The Bigger Picture

Yttrium’s story mirrors a broader truth about critical minerals: modern technology depends on obscure materials with fragile supply chains. The world is not running out of yttrium in the ground—but it is running short on secure, diversified access.

As of early 2026, yttrium remains tight, expensive, and geopolitically sensitive. But the crisis has forced long-overdue action. New supply chains are forming, processing capacity is expanding, and policymakers now understand that rare earth security is industrial security. Even under accelerated timelines, most non-Chinese yttrium projects will not materially impact supply until the late 2020s. So a big question given today’s date is January 18, 2026, where does supply come from say in the next three years?

Yttrium may never be famous—but it is indispensable. And ensuring its availability will shape defense readiness, technological leadership, and clean-energy deployment for the rest of this decade.

• Trump's rare earth strategy aims to reduce U.S. dependence on China through record funding and Pentagon investment in MP Materials.
• Building a vertically integrated supply chain will take years as China dominates critical downstream refining and magnet production.
• Media coverage overemphasizes green technology applications while underreporting that defense imperatives—radars, guidance systems, secure communications—are the primary drivers behind U.S. rare earth investment and policy intervention.
• Despite strategic progress like MP Materials' DoD deal and Apple sourcing contracts, the industry's real bottleneck is refining and permanent magnet production, not mining.
• The complexity of refining and permanent magnet production requires multi-year industrial development beyond headline capital flows.

A recent Los Angeles Times article (opens in a new tab) reports that President Trump’s strategy aims to reduce U.S. dependence on China in rare earth minerals — vital inputs for tech ranging from EV motors to fighter jet components. The story highlights record funding into U.S. rare earth startups in 2025 and a significant Pentagon investment in MP Materials. It also emphasizes private sector deals, such as Apple’s rare earth sourcing contract with MP Materials, and frames the issue through national security and green technology transition lenses.

Reality Check — What’s True and What’s Simplified

China’s Dominance Is Real and Deep:

China remains dominant not just in mining but especially in downstream refining and magnet production — the real bottleneck in rare earth supplychains. China produces the vast majority of refined elements usedglobally, a structural fact dating back decades.

U.S. Funding Is a Strategic Move, Not a Supply Breakthrough:

Record venture capital and government equity stakes (e.g., the Pentagon’s investment in MP Materials) signal strategic urgency and investor interest. But capital flows are not the same as fully scaled industrial output. Setting up refining, separation, and magnet facilities takes years, talent, and regulatory approvals — factors often glossed over in media narratives.

MP Materials and Others Are Small but Growing:

MP Materials — operating the Mountain Pass mine — is a key domestic producer and now advancing into refining and magnet making. The DoD deal couples long‑term procurement and price floors with production commitments, a significant policy signal. But even this deal is a step toward resilience, not instant supply chain independence.

Where the Article Misses or Misframes

Overemphasis on Green Tech vs. Defense Drivers:

While rare earths are essential for EVs and wind turbines, defense applications (radars, guidance systems, secure communications) remain a primary driver of U.S. strategy. Media pieces often emphasize climate narratives, which can obscure strategic defense imperatives that actually underlie much of the funding.

Downstream Complexity Is Underreported (like much of the media in the West):

Rare earth elements consist of 17 unique metals with different processing and industrial uses. The industry’s critical pinch point is refining and permanent magnet production, not mining alone — a nuance frequently missing from simplified coverage.

Industrial Reality Outpaces Headlines:

China’s dominance didn’t develop overnight, nor can it be easily unwound. Even with aggressive investment and policy tools, building a vertically integrated supply chain outside China will take years — decades in some midstream segments as Rare Earth Exchanges has delineated for all.

Why This Matters

For investors and supply‑chain watchers, understanding the difference between hype and structural change is essential. Large investment rounds and headline deals are important momentum signals, but they don’t instantly alter global market shares or processing dominance.

Key Takeaways:

• China’s rare earth market power remains entrenched, especially downstream.
• U.S. strategy combines private investment and government intervention — a shift toward industrial policy rather than pure market forces, but as Rare Earth Exchanges has proposed, not nearly sufficient on the policy front.
• Supply chain transformation is multi‑year (decade) and multi‑tiered; mining is only the first step.

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