• The Trump administration has elevated critical minerals to a core national security priority, backing it with the $12 billion Project Vault and new initiatives like FORGE to build a geopolitically selective mining ecosystem with allies.
• Chatham House warns that the biggest risk isn’t production capacity but policy credibility across administrations—mines take 10-15 years to mature, and investors need assurance that strategies will outlive presidencies.
• Proposed price floors and preferential trade zones aim to protect allied producers from predatory pricing, creating a hierarchical system favoring close security partners like Japan and Australia over higher-risk resource-rich nations.

The United States has launched its boldest effort yet to break dependence on China’s critical minerals, but a new analysis (opens in a new tab) from British thinktank Chatham House argues the real challenge is time. Speaking after the February 4 Critical Minerals Ministerial in Washington, senior fellow Christopher Vandome says the Trump administration has proved it is serious—but not yet that its policy will last long enough for investors to commit billions to projects that take 10–15 years to mature.

What the U.S. Is Getting Right

Vandome’s assessment is clear-eyed on one point: this is not a race to out-produce China. The U.S. is instead trying to build a geopolitically selective mining and processingecosystem, prioritizing access over volume. Invitations at the summitexplicitly urged allies to join a preferential trade zone guaranteeing American access to critical minerals across the bloc.

That framing reflects reality. With more than 30 national critical-minerals strategies worldwide, the U.S. is the first to elevate minerals to a core foreign policy and national security priority, backing rhetoric with real money—most notably the $12 billion Project Vault stockpile and expanded use of export-credit and development finance.

Where the Risk Creeps In

The article’s central warning is about credibility across administrations. Mines and separation plants outlive presidencies. Vandome argues that public criticism by J. D. Vance and Marco Rubio of Biden-era policies risks signaling that a future government could unwind Trump’s interventions—exactly thescenario that spooks capital and strands assets.

 This is not speculation; it is standard mining economics. Investors price political durability as heavily as geology.

FORGE, Price Floors, and a ‘Club’ with Rules

The new FORGE initiative (Forum on Resource Geostrategic Engagement) and proposed mineral price floors as reported by Rare Earth Exchanges™ aim to stabilize flows and protect allied producers from predatory pricing. Vandome rightly notes this will create a hierarchical club: closest U.S. security partners—Japan, Australia, South Korea—will see deeper processing investment than higher-risk jurisdictions like the DRC, even if the latter hold vast resources.

That may offend purists. It may also be unavoidable.

 Why This Matters for Rare Earths

Rare earths are downstream-dominated. Redirecting supply without building separation, metals, and magnet capacity simply reshuffles dependency. Vandome’s analysis reinforces a core REEx view: policy scale matters, but bureaucratic permanence matters more. Agencies, mandates, and interlocking interests are what make strategies survive elections.

REEx Take

The U.S. has moved from talk to architecture. The next test is endurance. In rare earths, credibility compounds—or collapses—slowly. Washington has lit the furnace. Investors are watching to see if it stays on.

Profile

Chatham House—formally The Royal Institute of International Affairs—is a century-old London think tank founded in 1920 and headquartered at 10 St James’s Square. It is best known globally for the “Chatham House Rule,” a non-attribution convention designed to encourage frank discussion by allowing participants to use information shared in meetings without identifying speakers. Today it operates as a membership-based institution (roughly 6,000 members) with research programs spanning global economy and finance, international security, international law, climate/environment, and regional geopolitics. It is widely regarded as an influential convening platform for government, business, and civil-society leaders—while also drawing periodic criticism for perceived establishment alignment and questions about funding transparency.

Source: Chatham House (UK)

• Landmark Nature Communications study overturns long-held assumption: magnetic strength in rare-earth magnets is governed by atomic-scale structures within crystal grains, not grain boundaries as previously believed.
• Researchers discovered ultra-thin copper-rich layers (1-2 atoms thick) act as 'perfect defects' that enhance magnet performance under extreme heat and stress, informing development of more powerful VACOMAX® samarium-cobalt alloys.
• Findings underscore that rare-earth magnet dominance depends on atomic-scale manufacturing intelligence rather than raw material access alone, with implications for U.S.-China technological competition and industrial policy.

In a landmark paper published in Nature Communications (opens in a new tab), lead author S. Giron and an international team spanning German universities, UK collaborators, and industrial partner VACUUMSCHMELZE GmbH & Co. KG (VAC) (opens in a new tab) overturn a long-held assumption about high-performance rare-earth magnets. Working within Germany’s Collaborative Research Center SFB/TRR 270 (opens in a new tab) (“HoMMage”), the researchers show that magnetic strength and thermal stability are governed less by grain boundaries—and more by atomic-scale structures and elemental distributions inside the grains themselves. The insight has already informed the rollout of more powerful VACOMAX® samarium-cobalt (SmCo) alloys, with implications that extend from factory floors to geopolitics.

The CRC 270 HoMMage team in Germany

How the Study Worked

Rare-earth magnets are the quiet workhorses of electric vehicles, drones, wind turbines, and defense systems. The team focused on a high-temperature SmCo magnet—Sm₂(Co, Fe, Cu, Zr)₁₇—and combined advanced magnetic measurements with multiple electron-microscopy techniques and micromagnetic simulations. This toolkit allowed the scientists to visualize how atoms are arranged and how magnetic domains behave at the nanoscale.

Crucially, they compared magnets that appeared similar under conventional microscopes but performed very differently in practice—differences that only emerged when examined atom by atom.

Stefan Giron, First Author, Institute of Materials Science, Technische Universität Darmstadt

What They Found: The Power Is in the “Defects”

The discovery is counterintuitive. Grain boundaries—the borders between crystal regions—were long thought to be the weak points where demagnetization begins. This study shows they are not the primary culprit.

Rather, the strongest magnets contain ultra-thin, copper-rich layers just one to two atoms thick embedded within the crystal grains. These features act as pinning centers, impeding the motion of magnetic domains and preserving performance even under extreme heat and stress.

The team describes these as “perfect defects”: imperfections so precisely arranged that they enhance performance. Tiny shifts in atomic placement or elemental distribution can yield outsized gains in strength and reliability.

Why This Matters for the China Question

China’s dominance in rare-earth magnets is not just about access to ore; it reflects mastery of process know-how—the industrial craft of translating materials science into repeatable, high-yield production. This study underscores that the true bottleneck is no longer mining alone, but atomic-scale manufacturing intelligence, protected by patents, talent pipelines, and close industry–academia integration.

For the U.S. and its allies, the implication is stark: stockpiles and trade deals are necessary but insufficient. Durable advantage will accrue to those who own the science of nanostructure design—and can industrialize it at scale.

Limitations and Open Questions

The work centers on samarium-cobalt magnets, prized for thermal and chemical stability but used in more specialized applications than mass-market NdFeB magnets. Extending these insights across magnet classes will require further research. Questions of scalability, cost, and intellectual-property access also remain—and could become points of contention in a more competitive global landscape.

Conclusion

The study makes a simple truth unavoidable: rare-earth sovereignty is engineered, not excavated. Control at the atomic level may prove more decisive than access to raw materials, reshaping how nations think about industrial policy, alliances, and technological independence.

Citation

Giron et al., Nature Communications 16, 11335 (2025). DOI: 10.1038/s41467-025-67773-7

• The UK hosts rare earth mineral deposits but remains functionally dependent on Chinese midstream processing—a vulnerability confirmed by both the British Geological Survey and a government-commissioned Frazer-Nash study.
• In January 2026, the UK government offered £12 million to support Ionic Technologies' Belfast facility, designed to produce 400 tonnes annually of separated magnet rare earth oxides using recycling technology.
• This marks Britain's shift from geological surveys to industrial midstream capability—demonstrating that control over separation, metals, and magnet production, not mineral deposits, determines supply-chain sovereignty.

This updated Rare Earth Exchanges™ analysis revisits the United Kingdom’s rare earth dilemma by integrating two authoritative assessments—the British Geological Survey’s geology-first review and a UK government–commissioned paper on recycling and midstream processing—alongside newly announced government-backed magnet-recycling capacity. We separate enduring structural constraints from genuine progress and explain why midstream capability, not mineral occurrence, defines supply-chain sovereignty.  Thanks to community members for sending updated information as well.

Britain Has Rocks—Now It’s Building Circuits: The Rare Earth Bottleneck Revisited

British Geological Survey (BGS) study delivered an uncomfortable truth: while the UK hosts rare earth occurrences, it lacks commercial-scale separation and refining, leaving it functionally dependent on foreign—predominantly Chinese—midstream supply. That diagnosis remains correct. What has changed in 2025–2026 is the policy response—and, finally, industrial assets moving beyond the laboratory.

Authored by David Currie and Holly Elliott, The Potential for Rare Earth Elements in the UK dismantles a persistent illusion: geology alone does not equal security. Leverage accrues to those who control separation circuits, metals and alloys, and magnet production—not to those who merely extract rock.

That conclusion is now reinforced by a second, policy-driven analysis.

Two Studies, One Verdict: The Midstream Decides

A UK government–commissioned paper, UK Critical Minerals Recycling and Midstream Processing (opens in a new tab), authored by Frazer-Nash Consultancy (for the Department for Business and Trade), reaches the same destination from a different route. Rather than geology, it interrogates processing, recycling, skills, scale-up timelines, and market readiness—and finds the UK’s principal exposure sits squarely in the midstream.

Together, the BGS and Frazer-Nash papers converge on a single conclusion: without domestic separation, metal-making, and magnet-grade pathways, mineral endowment offers little strategic insulation.

What the Geology Gives—and Withholds

The BGS mapped REE-bearing formations in Wales, northwest Scotland, and parts of England. Localized samples can approach ~2% total rare earth oxides, but deposits are small, discontinuous, and uneconomic under current conditions. The UK has never produced rare earths at a commercial scale. On this point, the evidence is settled.

Downstream vulnerability persists. Even as China’s mining share trends toward ~65%, its dominance in separation, metals, and permanent magnets continues to anchor global leverage.

From Reports to Reality: Processing and Magnets Arrive

Here is the material update. In January 2026, the UK government issued an Offer in Principle for a £12 million capital (opens in a new tab) grant to support a commercial rare earth permanent-magnet recycling facility in Belfast, led by Ionic Technologies, a wholly owned subsidiary of Ionic Rare Earths. The proposed plant is designed to produce ~400 tonnes per annum of ≥99.5%-purity separated magnet rare earth oxides (Nd, Pr, Dy, Tb) using patented long-loop recycling technology, with targeted first production within ~two years, subject to final investment decision and due diligence

Ionic.

This isnot mining—and that is precisely the point. It is midstreamcapability, directly aligned with the UK’s Critical Minerals Strategy target of 10% domestic supply and 20% via recycling by 2035. Demonstration-scale operations have already produced separated dysprosium and terbium oxides, validating magnet-grade pathways beyond proof-of-concept.

Progress, With Proportions

Scale still matters. Recycling is additive, not substitutive. Volumes remain modest relative to national demand, and the UK still lacks primary separation from mixed concentrates. Yet Belfast breaks a long-standing binary: it demonstrates that Britain can host industrial REO separation for magnets, not just studies and strategy papers.

REEx Verdict

The diagnosis from both the BGS and Frazer-Nash stands: rocks alone do not confer power. But Britain is finally addressing the correct bottleneck. If Belfast reaches FID and ramps as planned, the UK moves from pure dependency to partial agency—not independence, but momentum. In rare earths, momentum is how leverage is rebuilt.

Sources: Currie & Elliott (2024), The Potential for Rare Earth Elements in the UK, British Geological Survey; Frazer-Nash Consultancy, UK Critical Minerals Recycling and Midstream Processing (UK Government-commissioned); Ionic Rare Earths ASX Announcement (27 Jan 2026).

• Advanced Electric Machines announces partnership with Asian automotive OEM for magnet-free electric motors.
• Partnership aims to eliminate dependency on neodymium and dysprosium, reducing exposure to China's supply chain.
• AEM's reluctance-based motor technology is credible but still unproven at scale.
• Efficiency data for the technology remains undisclosed.
• AEM is facing financial struggles, including declining revenues and widening losses after a major customer collapse.
• Automakers are funding rare-earth alternatives as a strategic hedge rather than an imminent replacement.
• This strategic move creates optionality, weakening the demand concentration of rare earths at the margin.

Advanced Electric Machines (AEM), (opens in a new tab) a UK startup positioning itself at the center of the rare-earth-free electric motor narrative, has announced another development partnership—this time with an unnamed Asian automotive OEM—following a previously disclosed seven-figure deal with a Tier-1 supplier. The headline is attractive: magnets out, rare earths out, supply-chain risk reduced. The details, however, deserve careful parsing.

This is meaningful news—but not quite the breakthrough some readers may assume.

What Holds Up Under Scrutiny

The core claim is sound. Advanced Electric Machines develops magnet-free electric motors that eliminate neodymium and dysprosium—two rare-earth elements closely linked to Chinese processing dominance. That aligns with well-established industry facts: permanent-magnet motors remain one of the most China-exposed components in EV drivetrains.

AEM’s focus on reluctance-based motor architectures is also credible. These designs are known, manufacturable, and already deployed at scale in certain industrial and automotive contexts. The company’s SSRD (Super Speed Reluctance Drive) targeting passenger vehicles by decade’s end fits realistic automotive development timelines.

The strategic motivation cited by OEMs—reducing exposure to concentrated supply chains—is legitimate and consistent with broader industry behavior.

Where the Story Starts to Stretch

Several claims lean forward of the evidence. AEM has not disclosed its full operating principle, efficiency curves, or cost parity versus permanent-magnet motors at scale. That matters. Magnet-free motors historically trade material security for lower power density or higher system complexity.

The push to replace copper windings with compressed aluminium is also speculative at this stage. Aluminium windings are feasible, but they introduce conductivity penalties, thermal challenges, and packaging trade-offs. No public data yet shows this approach outperforming copper in automotive duty cycles.

The suggestion of “queues of global manufacturers” should be read as optimism, not proof. Development contracts are not production commitments.

The Financial Subtext Investors Should Not Ignore

AEM’s financials add context. Revenues declined sharply after 2022, and 2024 losses widened materially, driven in part by the collapse of a major customer. This does not invalidate the technology—but it reinforces that commercial execution remains unproven.

These announcements signal interest, not inevitability.

Why This Matters for the Rare Earth Supply Chain

The notable point is not that rare-earth-free motors are imminent replacements for permanent-magnet systems. It is that automakers are actively funding optionality. Even partial substitution weakens rare-earth demand concentration at the margin—especially in Europe and Asia.

This is not the end of rare earth magnets. It is the beginning of strategic hedging.

Source: Information via email (German); reporting by Cora Werwitzke, 28 Jan 2026

• Europe's strategic push for minerals independence is real but overstates speed—rare earth supply chains require long lead times, technical expertise, and capital discipline that the continent has historically struggled to deliver.
• While EU enlargement and partnerships with Ukraine and Greenland offer strategic mineral access, execution remains uncertain as political unity doesn't automatically translate into industrial capability or bankable production.
• Until Europe proves it can permit, finance, and operate rare earth projects at scale without relying on China, 'strategic autonomy' remains aspirational rhetoric rather than supply chain reality.

When geopolitical ambition meets the unforgiving physics of supply chains in the era of Great Powers Era 2.0. Europe’s renewed push to become a unified geopolitical heavyweight makes for muscular reading. Emergency summits, talk of “European sovereignty,” accelerated enlargement, and sharper trade tools all signal intent. But beneath the rhetoric, the rare earth and critical minerals story reveals a stubborn truth: power is not declared—it is built, molecule by molecule, mine by mine.

The Parts That Hold Up Under Scrutiny

There is nothing fanciful about the EU’s strategic anxiety. Dependence on China for rare earth elements used in EVs, wind turbines, and defense electronics is real and well-documented. Efforts to diversify—partnerships with Ukraine, Greenland, and internal projects such as a rare-earth processing facility in Estonia—reflect genuine policy shifts. The logic is sound: without secure access to NdPr, Dy, Tb, and separation capacity, “strategic autonomy” remains a slogan.

The recent British media’s account (opens in a new tab) is also correct that enlargement matters economically. A larger single market does increase regulatory gravity and negotiating leverage. From a minerals perspective, Ukraine’s titanium, graphite, and potential rare earth resources are strategically relevant, even if underdeveloped.

Where the Narrative Starts to Float

What the piece overstates is speed and cohesion. Europe is portrayed as if it can simply will a minerals-industrial base into existence. In reality, rare earth supply chains require long lead times, environmental permitting, technical separation expertise, and capital discipline—areas where Europe has historically struggled. Opening a factory is not the same as mastering solvent extraction at scale or securing feedstock outside China’s orbit.

Greenland is treated as a geopolitical prize without sufficient attention to the commercial, environmental, and social constraints that have stalled projects there for years. The minerals exist; bankable production is another matter entirely—frankly, a decade plus away, all things being equal.

The Quiet Bias: Power by Declaration

There is an unmistakable Brussels-centric bias toward institutional solutions—more members, more rules, more coordination—while underplaying execution risk. The assumption that political unity translates cleanly into industrial capability ignores past failures in both defense and materials policy.

Notably absent is any hard comparison to China’s vertically integrated model or the United States’ growing use of price floors, offtake guarantees, and defense-backed financing. Strategy without industrial incentives is aspiration, not competition.

Why This Matters for Rare Earth Investors

The EU’s ambitions are real, but the minerals clock is unforgiving. Until Europe proves it can permit, finance, and operate rare earth projects at scale—without outsourcing risk back to China—“Super Europe” remains a geopolitical concept, not a supply chain reality. And as Rare Earth Exchanges™ recently chronicled with funding totals, the European Continent remains at a distinct disadvantage due to the politics and administrative weight. This could change, but it will take a Sputnik moment followed by vision, strategy, industrial policy, and relentless execution.

Source: reporting by James Crisp and Joe Barnes, The Telegraph, January 26, 2026.

• Cobra Resources completes assignment of exploration licenses 6742, 6774, and 6780 at Boland Project.
• Drilling and metallurgical testing are being accelerated with ISR results expected in February 2026.
• The company pursues a first-of-its-kind in-situ recovery (ISR) method for ionic rare earths, offering a potentially low-cost, low-disturbance alternative to Chinese operations amid tightening export controls.
• Stock trades at 4.2p as a high-risk exploration play with near-term catalysts expected in Q1-Q2 2026.
• Key risks include the absence of a JORC resource and an unproven field-scale ISR pilot until late 2026.

Cobra Resources PLC ( (opens in a new tab)LSE: COBR, 4.21 GBX) has completed the formal assignment of new exploration tenements at its Boland Ionic Rare Earth Project in South Australia, removing a key regulatory bottleneck and enabling the company to accelerate drilling, metallurgical testing, and pilot-scale planning. The update lands amid heightened global concern over China’s tightening control of heavy rare earth supply, making any credible ex-China ionic rare earth pathway strategically relevant for investors.

What’s New—and What’s Material

The completion of Exploration Licenses 6742, 6774, and 6780 materially expands Boland’s land position and consolidates Cobra’s control over priority targets, including Head, Gillespie, and Stokes. Native title agreements are already in place, and environmental and regulatory applications are being expedited to allow drilling ahead of the late-April cropping season—reducing a common source of timeline risk for Australian juniors.

On metallurgy, Cobra reports that ISR (in-situ recovery) diagnostic tests on historical samples have been completed, with results expected in February 2026. A 65-kg ISR column leach study is advancing toward an optimized Mixed Rare Earth Carbonate (MREC) product, also targeted for February, to support preliminary offtake discussions. The development sequence—tenure → drilling → metallurgy → offtake—is coherent and technically logical.

ISR Claims: Credible, but Still Unproven at Scale

Boland’s core thesis is that a confined aquifer ISR model, adapted from uranium mining, could enable low-cost, low-disturbance recovery of heavy rare earth–rich ionic clays, potentially differentiating it from environmentally problematic Chinese operations. Bench-scale ISR test work supports the concept, and the focus on controlled aquifer chemistry is technically sound.

However, key risks remain:

• No JORC-compliant resource estimate yet
• No field-scale ISR pilot until late 2026 (target)
• Metallurgical results pending, not finalized

This is best viewed as optionality on technical success, not a de-risked development asset.

Stock Context: Optionality, Not Fundamentals—Yet

At roughly 4.2p, Cobra trades as a high-risk exploration stock rather than on reserves or cash flow. The market appears to ascribe limited value to the ISR thesis pending hard data on grades, recoveries, and hydrology. Near-term catalysts are clear (Q1–Q2 2026 drilling and metallurgy), but dilution risk remains typical for this stage.

Why This Matters for the U.S. and Allies

With China controlling roughly 90% of the heavy rare earth supply and tightening export oversight, any scalable, environmentally defensible ionic REE pathway outside China is strategically important. Boland does not yet solve the supply-chain challenge, but it aligns directionally with what the U.S. and allies must rebuild: allied-nation heavy rare earth production using lower-impact methods.

Critical Questions Investors Should Ask

• Can ISR deliver commercial recoveries across variable clay chemistry?
• Will regulators approve a world-first rare earth ISR pilot without delay?
• How competitive can MREC pricing be versus Chinese supply in weaker pricing cycles?

Source: Cobra Resources PLC RNS, 26 January 2026

• A new study shows circular server design—featuring longer life, modular repair, and easier recycling—reduces environmental impact by ~29% over 16 years and lowers demand for critical raw materials including rare earths.
• Life cycle assessment reveals electronics assemblies drive most embodied impacts, and life extension paired with design for disassembly delivers immediate gains even when recycling infrastructure lags.
• Circular design offers a faster geopolitical lever than new mines: it reduces material throughput, slows replacement cycles, and lowers vulnerability to concentrated rare earth processing—one modular upgrade at a time.

A new open-access paper by Deborah Andrews (opens in a new tab) and Kristina Kerwin (opens in a new tab) of London South Bank University (opens in a new tab), published in Mineral Economics, makes a practical point with geopolitical weight: if the world wants to reduce vulnerability to highly concentrated rare earth and critical mineral processing, it should not focus only on new mines.

It should also redesign the machines that consume these materials. Using a detailed life-cycle case study, the authors show that designing servers for circularity—longer life, modular repair, easier refurbishment, and better end-of-life recovery—can materially reduce environmental impacts and curb demand for virgin critical raw materials (including rare earths widely used across electronics and magnets).

Design Beats Digging: What They Actually Tested

The study compares a prototype “circular” server against a standard enterprise server. Across multiple modeled life-cycle scenarios, the circular server shows consistently lower environmental impacts, with the largest headline advantage appearing over a 16-year service period: the prototype circular server’s overall impact is ~29% lower on average than a standard approach that effectively requires two standard servers over the same 16 years (given typical refresh and replacement patterns).

This does not “solve” rare earth concentration risk by itself. But it reduces exposure by lowering total material throughput and slowing replacement cycles—two levers that matter when supply chains are brittle.

Methods: Full Life Cycle Assessment, Not Marketing Claims

The authors use a comprehensive Life Cycle Assessment (LCA) rather than corporate sustainability reporting. They built a baseline model by reverse-engineering widely used servers (including those from major OEMs) and then modeled the prototype circular server using primary data where possible, supported by established databases for secondary inputs. They ran scenarios covering product life extension (refurbishment/upgrade) and two recycling pathways: a business-as-usual (BAU) recovery case (focused on a limited set of widely recycled metals) and a more advanced multi-material recovery case.

They also emphasize that many server components contain Critical Raw Materials (CRMs); even when CRM mass fractions are small, supply risk can be high. The paper cites low recycling input rates for several CRMs—often around 0–1%—which is central to the “circularity gap” argument.

Key Findings: Why Circularity Matters for CriticalMinerals

1. Electronics dominate the embodied burden. Impacts are heavily driven by electronics assemblies (motherboards/PCBs and associated components). This is where many CRMs—including certain rare earths—hide in plain sight.
2. Life extension delivers immediate gains. Refurbishment and reuse scenarios lower impacts materially; the study reports that life-extension strategies (paired with recycling) reduce impacts versus “replace quickly” strategies.
3. Recycling helps—but design enables recycling. Even improved recovery pathways deliver limited benefit if products are hard to disassemble, components are non-modular, or materials are locked into complex assemblies. Circular design increases the chance that better recycling infrastructure can actually translate into higher recovery.
4. Circularity is a near-term lever. New mining and processing capacity can take many years. Design changes (modularity, reduced fasteners, standardized parts, reduced plastics, chassis reuse) are implementable sooner—especially if procurement and standards push in that direction.

What’s Controversial or Easily Misread

• This paper is not a China-specific processing study. It does not quantify China’s share of rare earth processing or model export controls. The geopolitics enter as an implication: when upstream processing is concentrated globally, reducing throughput and extending product life lowers downstream vulnerability.
• Circular electronics are hard. The authors are candid: many electronic components are intrinsically difficult to reclaim economically. The strongest lever today may be life extension, not “perfect recycling.”

Limitations

The prototype is a non-AI server; future AI-optimized hardware could change material intensity and refresh dynamics. Results are modeled using a European-average electricity mix and recycling assumptions, so impacts vary by region and grid. The authors also note uncertainty from reliance on some secondary datasets and recommend sensitivity analyses and further work (including circular AI servers and broader social/economic assessment).

REEx Takeaway

Rare earth security is usually framed as a mine-and-refinery contest. Andrews and Kerwin show a quieter truth: design choices that are upstream of e-waste determine downstream dependence. Circular servers won’t replace the need for diversified processing. But they can buy time, reduce demand pressure, and shrink the strategic penalty of concentrated supply chains—one chassis, one fastener, one modular upgrade at a time.

Citation: Andrews, D., & Kerwin, K. (2026). Design for circularity – a data centre equipment case study. Mineral Economics. https://doi.org/10.1007/s13563-025-00587-7 (opens in a new tab)

• SOLVOMET at KU Leuven is Europe's most technically mature solvent-extraction and circular hydrometallurgy center.
• The center specializes in the critical midstream separation and refining of rare earth elements that Western supply chains lack the most.
• Unlike typical academic centers, SOLVOMET demonstrates continuous counter-current solvent extraction at pilot scale (TRL-5).
• SOLVOMET integrates metallurgical chemistry with organic synthesis to design scalable flowsheets for separating chemically similar REEs.
• SOLVOMET's 12 Principles of Circular Hydrometallurgy provides a chemistry-grounded framework for low-energy, waste-minimizing metal recovery.
• Positioning the center as foundational infrastructure for breaking China's midstream dominance in rare earth processing.

SOLVOMET (opens in a new tab) is not a startup, pilot curiosity, or policy think tank. It is one of the most technically mature solvent-extraction and circular hydrometallurgy centers in the world, and it sits at the exact choke point of the rare earth supply chain that Europe and the U.S. lack most: midstream separation and refining.

Embedded within KU Leuven and its Institute for Sustainable Metals and Minerals (SIM²), SOLVOMET (opens in a new tab) functions as both a research engine and an industrial deployment platform, operating credibly from fundamental chemistry through TRL-5 mini-pilot validation.

Why SOLVOMET Matters for the Rare Earth Supply Chain

Rare earth supply chain discussions often fixate on mines or magnets, skipping the hardest step: separating chemically similar REEs at an industrial scale. SOLVOMET specializes precisely here.

Their core competency is continuous, counter-current solvent extraction (SX)—the only proven industrial method capable of economically separating Nd, Pr, Dy, Tb, Y, and Eu at scale. Unlike many academic centers, SOLVOMET does not stop at batch tests. They routinely demonstrate multi-stage SX flowsheets using mixer-settlers, centrifugal contactors, and extraction columns, validating designs up to TRL-5.

This makes SOLVOMET directly relevant to:

• European rare earth separation independence
• Ex-China heavy REE processing
• Recycling-driven (“urban mining”) REE recovery
• Defense- and energy-transition-grade material qualification
• American government is giving it’s leading the ex-China rare earth supply chain charge

A Chemistry-First Advantage (Not Hype-Driven Metallurgy)

What differentiates SOLVOMET globally is its integration of metallurgical chemistry with organic synthesis. Located within KU Leuven’s chemistry department, the group can:

• Design and synthesize new extractants
• Characterize organic phases using NMR, FT-IR, LC-MS, GC-MS
• Model multi-phase equilibria thermodynamically (>90% accuracy)
• Translate molecular-level insights into scalable SX flowsheets

This is a sharp rebuttal to the fashionable—but often non-scalable—focus on ionic liquids or deep-eutectic solvents. As Professor Koen Binnemans (opens in a new tab), SOLVOMET’s founder and scientific lead, has argued publicly: breakthroughs will come from deep molecular understanding, not exotic solvents alone.

From Lab to Industry: A Rare Academic-Industrial Bridge

SOLVOMET’s industrial relevance is not theoretical. The center has executed contract research and EU projects involving:

• REE separation and recycling
• Battery metals (Li, Ni, Co)
• PGMs and industrial residues
• Tailings and end-of-life material recovery

Projects are structured to deliver industrial IP, with options ranging from short-term services to multi-year framework agreements—exactly the kind of translational capacity missing in most Western critical-minerals ecosystems.

The 2023 “12 Principles of Circular Hydrometallurgy”: Why It Matters

SOLVOMET’s 2023 paper (opens in a new tab) on the 12 Principles of Circular Hydrometallurgy provides a rare, chemistry-grounded framework for designing metal recovery systems that are:

• Low-energy
• Reagent-efficient
• Waste-minimizing
• Recycling-first, not mining-only

For rare earths, the implication is profound: future supply security will be won not only through new mines, but through better separation chemistry applied to complex, low-grade, or recycled feedstocks. SOLVOMET supplies the intellectual and practical blueprint for doing exactly that.

Rare Earth Exchanges™ Takeaway

SOLVOMET is a strategic midstream asset masquerading as an academic center. As Western governments talk about price floors, offtakes, and reshoring, SOLVOMET already possesses what policy cannot fabricate quickly: decades of solvent-extraction mastery, pilot-scale credibility, and molecular-level control over rare earth separation.

If Europe—or its allies—seek to accelerate the breaking up of China’s midstream dominance, centers like SOLVOMET are not optional infrastructure. They are foundational and will need to be at the policy table. Frankly, Washington, D.C., should be consulting SOLVOMET as well as the Europeans.

A recognition that commercial centers of excellence for European midstream activity include Solvay (Belgium), Carester (France), Neo Performance Materials (Estonia), and Less Common Metals—now part of USA Rare Earth. (UK). A new recycling facility was launched in the UK, sponsored by Mkango Resources (Maginito) in partnership with the University of Birmingham's Magnetic Materials Group (MMG).

• University of Birmingham-linked facility at Tyseley Energy Park revives UK rare-earth magnet manufacturing using Hydrogen Processing of Magnet Scrap (HPMS).
• Scaling from pilot batches to 100+ tonnes annually with 90% CO₂ savings compared to virgin production.
• Operated by HyProMag (majority owned by Mkango Resources).
• The facility restores the complete domestic supply chain, including recovery, alloying, sintering, and reuse.
• Establishes UK's first industrial-scale sintered magnet production in over 25 years.
• While output remains modest relative to global EV and wind turbine demand, the facility provides strategic resilience.
• Serves as a proving ground for traceable, low-carbon magnets aligned with the UK's Vision 2035 Critical Minerals Strategy.

A new rare-earth magnet recycling facility linked to the University of Birmingham has opened at Tyseley Energy Park (opens in a new tab) in the West Midlands, reviving a capability the UK effectively lost more than 25 years ago. Using hydrogen-based magnet recycling, known as Hydrogen Processing of Magnet Scrap (HPMS), the facility extracts and reprocesses rare-earth magnets from end-of-life products—often without full mechanical disassembly—turning waste into a domestic source of neodymium-iron-boron (NdFeB) magnets. For a country heavily dependent on imports, particularly from China, this is more than a laboratory milestone. It is a strategic industrial signal.

Tyseley Energy Park

What Holds Up Under the Microscope

Several claims are well supported. HPMS is a validated UK-developed technology, originating from long-running research at the University of Birmingham, that can substantially reduce environmental impact versus primary mining, separation, and magnet production. Reported ~90% CO₂ savings relative to virgin production are consistent with published life-cycle assessments, assuming suitable recycled feedstock.

The scale-up reported in multiple media, including Machinery Market, (opens in a new tab) is also real in the UK context. Moving from 50–100 kg pilot batches to ~100 tonnes per year on a single shift—with potential to exceed 300 tonnes on multi-shift operation—represents a meaningful re-entry into sintered magnet manufacturing. Importantly, this facility is not limited to powders; it restores finished magnet production, a capability absent in the UK for decades.

This aligns directly with the UK’s Vision 2035 Critical Minerals Strategy, which prioritizes resilience, circular supply chains, and domestic processing over speculative mining.

Where the Narrative Leans Forward

This facility does not make the UK magnet-independent. Even at full utilization, output represents a small fraction of global NdFeB demand, which is expanding rapidly with EVs, wind turbines, robotics, and automation. Recycling is inherently feedstock-limited; without sufficient end-of-life magnets, throughput cannot scale indefinitely. Political claims around “hundreds of jobs” and sweeping supply-chain de-risking should be viewed as aspirational, not yet proven.

Another quiet constraint remains: heavy rare earths such as dysprosium and terbium, critical for high-temperature magnets, are structurally scarce and far harder to recover at scale from scrap alone.

Who Owns the Facility and the Technology

The facility is operated by HyProMag, (opens in a new tab) a UK-based company that has licensed the HPMS technology from the University of Birmingham. HyProMag is majority owned by Mkango Resources (opens in a new tab), a rare earths developer advancing both primary mining and recycling assets across the UK, Europe, and North America. HyProMag’s strategy centers on building a commercial circular magnet supply chain that combines recycling, alloying, and sintered magnet manufacturing, with Tyseley serving as its first scaled industrial anchor.

Why This Still Matters

What’s notable is not raw tonnage—it’s capability. The UK now has every major link of a rare-earth magnet supply chain onshore: recovery, alloying, sintering, and reuse. As an open-access facility, it also functions as a proving ground for OEMs, defense suppliers, and clean-tech firms seeking traceable, low-carbon magnets.

In a world where rare-earth risk is less about geology and more about processing choke points, this facility is a modest but serious step toward strategic adulthood.

Citation: University of Birmingham announcements; Innovate UK; UK; Government Vision 2035: Critical Minerals Strategy (Nov 2025); Machinery Market (Jan 20, 2026); Mkango Resources (opens in a new tab) (Jan 15, 2026)

• China has significantly tightened its rare earth export review process for Japan, now requiring detailed disclosures on buyers, end-use, transportation routes, and re-export destinations, marking a shift to transaction-level oversight.
• Chinese state-owned suppliers have informed Japanese firms they will not sign new contracts and may terminate existing ones—the first confirmed instance of outright denial of rare earth purchases to Japanese companies.
• Despite diversification efforts, Japan remains 71.9% dependent on Chinese rare earth imports, with potential disruptions estimated to cost up to ¥2.6 trillion (~$17 billion) annually, while Japan accelerates deep-sea mining alternatives.

According to Japanese media reports China has significantly tightened its review process for rare earth and rare metal exports to Japan, requiring Japanese companies to submit far more detailed documentation than before. Multiple trade sources told outlets, including Japan Today and Kyodo News, that the new requirements could slow shipments of materials critical to electric vehicles, semiconductors, and advanced manufacturing.

Under the revised review process, Chinese authorities are now demanding comprehensive disclosures covering the qualifications of Japanese buyers, the end-use of the rare earths, transportation routes, downstream customers, intermediaries, and—most notably—whether products made with these materials will be re-exported to third countries. For U.S. and Western observers, this marks a shift from quantity-based export controls to granular, transaction-level oversight, significantly increasing Beijing’s leverage over downstream supply chains.

The move follows earlier Chinese actions. On January 6, China’s Ministry of Commerce announced tighter export controls on certain dual-use items involving Japan, citing national security concerns. Chinese media further claim the latest measures were triggered by comments from Japanese Prime Minister Sanae Takaichi on Taiwan in late 2025—underscoring how geopolitical signaling is now directly influencing critical mineral trade.

More consequentially, Kyodo News reported that Chinese state-owned rare earth suppliers have informed some Japanese firms they will not sign new contracts, and are even considering terminating existing ones. Japanese media describe this as the first confirmed instance of Japanese companies being denied rare earth purchases outright.

What About Japanese Diversification?

Despite Japan’s diversification efforts since 2010, official data show that 71.9% of Japan’s rare earth imports still came from China in 2024, with near-total dependence for certain heavy rare earths used in permanent magnets for EV and hybrid motors. Nomura Research Institute estimatesthat a three-month disruption could cost Japan ¥660 billion ($4.4 billion) and shave 0.11% off GDP; a year-long disruption could push losses to ¥2.6 trillion ($17 billion). Not good scenarios for the Japanese economy.

In response, Japan is accelerating alternatives. The deep-sea drilling vessel Chikyu has begun test drilling near Minami-Torishima Island to evaluate rare–earth–rich seabed muds, as cited by the Australian Broadcasting Corporation (opens in a new tab).  Project leaders say commercial production could begin as early as February 2027 if tests succeed.

China’s Foreign Ministry defended the measures as lawful and necessary for national security, while stating it remains committed to global supply chain stability.

Why this matters for the U.S. and the West

This episode highlights how China’s dominance in rare earth processing can now be exercised through administrative controls, not just quotas, reinforcing supply chain vulnerability for allies—and underscoring the urgency of Western investment in non-Chinese refining and processing capacity.

• UK's first rare earth magnet recycling facility in 25 years opens at Tyseley Energy Park in Birmingham.
• The facility uses hydrogen-based HPMS technology to recover over 400 kg of alloy per batch.
• The plant can produce up to 300 tonnes of recycled magnets annually.
• HyProMag plant strengthens supply-chain resilience by recycling NdFeB magnets used in EVs, wind turbines, and electronics.
• Reduces UK dependence on imported critical minerals while significantly lowering carbon emissions.
• Supports the UK government's Vision 2035 Critical Minerals Strategy.
• Enables domestic recovery of rare earth materials through circular, sustainable production methods.

A rare earth magnet recycling and manufacturing facility has opened in Birmingham, UK, at Tyseley Energy Park — the first such plant in the country in 25 years. The project is led by HyProMag Ltd (opens in a new tab), a company commercializing hydrogen‑based recycling technology developed with the University of Birmingham and now owned by Maginito (opens in a new tab), a subsidiary of Mkango Resources Ltd (opens in a new tab). and CoTec Holdings (opens in a new tab). The plant uses Hydrogen Processing of Magnet Scrap (opens in a new tab) (HPMS) to break down old magnets into reusable rare earth alloy without fully disassembling devices. This process can recover over 400 kg of rare earth alloy per batch and produce up to 100–300 tonnes of recycled sintered magnets per year, depending on operating shifts.

Rare earth magnets — especially NdFeB types — are vital components in electric vehicles, wind turbines, robotics, electronics, and defence systems. Recycling them helps the UK reduce dependence on imported critical minerals and aligns with the government’s Vision 2035: Critical Minerals Strategy, which targets meeting part of the country’s critical mineral needs from domestic and recycled sources.

Using recycled magnets instead of newly mined rare earths also significantly lowers carbon emissions and environmental impact.

While this doesn’t replace the need for mining or full downstream processing, it strengthens supply‑chain resilience and helps shift toward more circular, sustainable production.

• LKAB's Kiruna mine progress masks the real challenge: Europe lacks large-scale separation chemistry, metal-making, and magnet manufacturing infrastructure needed for true independence from China.
• Moving from deposit to refined rare earth products takes 10-15 years—not quarters—making headlines about Europe's imminent liberation from Chinese dominance strategically premature.
• LKAB's decision to build a demonstration separation plant in Luleå before mining fully begins signals the critical shift: refining is the real mine, and midstream capacity determines independence.

The Western media loves a mine in winter. A recent dispatch (opens in a new tab) from LKAB’s Kiruna operation descends into Arctic tunnels bathed in blue twilight and returns with a familiar promise: Europe is finally digging its way out from under China’s rare earth dominance. The reporting is vivid, careful, and—on the surface—largely fair. Europe has no operating rare earth mines. The EU remains deeply dependent on China for permanent magnets and processed materials. LKAB is tunneling toward the Per Geijer deposit and pushing harder than Europe’s usual geological clock allows.

But here the story quietly slips.

Upstream in Kiruna, Midstream to Luleå

“Faster,” in rare-earth time, still means years, not quarters. Even The Guardian’s (opens in a new tab) own experts admit that moving from deposit to refined products routinely takes 10 to 15 years. This is not a footnote. It is the story. Yet the narrative momentum pulls forward, as if drilling itself were destiny.

The Mine Beneath the Mine

The most important sentence in the recent piece in the British media is the least cinematic: you have to have the entire supply chain. That is the correct diagnosis—and the point most headlines skip. Europe can map deposits. It can tunnel and blast, and photograph rock faces. What it does not yet have is large-scale separation chemistry, metal-making, or magnet manufacturing.

LKAB’s decision to build a demonstration separation plant in Luleå and partner with REEtec (opens in a new tab) matters precisely because it acknowledges this uncomfortable truth: ore does not equal independence. Refining is the real mine. Without it, every heroic shaft is just a longer road back to China.

Liberation as Mirage

The framing—_Freedom from China?_—is emotionally satisfying and strategically premature. A Swedish mine, even a large one, does not break China’s leverage if Europe still lacks midstream scale and downstream industrial depth. The article is strongest when it admits this; weaker when it flirts with liberation narratives that compress timelines and romanticize extraction.

The risk here is not misinformation. It is an illusion.

What Actually Matters

For investors and policymakers, the signal is not the deposit. It is that LKAB is building the midstream before mining fully begins and aligning itself with Brussels’ de-risking agenda. That is rare. That is real.

And that, more than any photograph taken at 1,300 meters below ground, is where the future of Europe’s rare earth strategy will be decided.

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• No credible evidence supports claims of imminent U.S. invasion of Greenland—only rhetorical escalation amplified by tabloids and fragmented media coverage.
• Greenland's rare-earth deposits are overstated; without U.S. midstream refining capability, controlling territory doesn't equal supply-chain sovereignty.
• The real strategic contest in the Arctic is who controls separation, refining, and processing—not landmass acquisition through military force.

What happens when invasion chatter collides with supply-chain physics?  Consider the rumors of a U.S. invasion of Greenland ricocheting across tabloids and legacy media alike. From Daily Mail’s (opens in a new tab) breathless talk of secret JSOC planning to The New Yorker’s (opens in a new tab) somber chronicle of Danish betrayal, the media ecosystem is vibrating with anxiety. Rare Earth Exchanges™ steps back from the noise to ask the harder question: what is structurally true—and what is strategic theater amplified by clicks?

The Tabloid Drumbeat

Fear, fury, and comment-section thermometers

The Daily Mail leans on unnamed sources and maximalist framing. Its comments section—thousands deep—tells a clearer story than the headline. Three themes dominate:

1. Skepticism (“according to sources,” “paper talk,” “no other outlets reporting this”),
2. Outrage and apocalypse (NATO collapse, Article 5 spirals), and
3. Deal-making cynicism (“it’s all talk to force a negotiation”).

This is not consensus; it is polarization. The bias is evident: personalize power, compress geopolitics into a morality play, and reward escalation. Crucially, no corroboration from U.S. institutions or allied governments supports claims of imminent invasion planning. At best, this is coercive rhetoric reframed as fact.

Establishment Lenses

Betrayal vs. capability

The Copenhagen Post (opens in a new tab) and The New Yorker shift the frame from invasion to erosion of trust. Denmark and Greenland feel bullied—but both outlets highlight a contradiction often missed in tabloids: the U.S. already has legal access to Greenland and has reduced, not expanded, its footprint over decades. That undercuts claims of sudden security desperation.

The Telegraph (opens in a new tab) adds steel, not melodrama—detailing Denmark’s delayed rearmament and Greenland’s thin defenses, while conceding the obvious: no Danish build-out could deter the U.S. itself. The signal is political, not operational.

The Mineral Mirage

Resources without industry are just rocks

Greenland’s rare-earth potential exists—but it is overstated in popular discourse. Deposits are remote, capital-intensive, and largely undeveloped, many under ice. More decisive: the choke point is midstream—separation, refining, metals, and magnets. Without a comprehensive U.S. industrial policy, Greenland does not enable a leapfrog over China. It merely shifts upstream optics. Territory is not supply-chain sovereignty.

Rare Earth Exchanges Verdict

Noise high, leverage low

There is no credible evidence of an imminent U.S. invasion. There is ample evidence of rhetorical escalation, media bias, and reader fragmentation. When it comes to economic war from the REE and critical mineral vantage, the real contest is not Greenland’s landmass—it is who controls midstream capability in the Arctic age. Until that gap closes, invasion talk is theatrics, not strategy.

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• Britain is strategically rebuilding defense supply chain independence by focusing on midstream rare earth processing—separation, alloys, and recycling—where China controls 85-90% of global capacity.
• UK firms like Less Common Metals, Ionic Technologies, and Metalysis are developing defense-grade alloy and magnet recycling capabilities, with USA Rare Earth's LCM acquisition signaling allied integration.
• The shift represents Western realism: not competing with Chinese mining dominance, but building critical midstream chokepoint resilience for long-term strategic security.

Is London driving the rebuilding of midstream capacity for the UK, right as China tightens the valve? Britain’s effort to rebuild a China-independent defense supply chain for rare earth elements (REEs) is not headline-grabbing—but it is strategically real according to reports. The article under review correctly frames the central risk: Western defense systems rely on REEs for magnets, alloys, and sensors, while China dominates refining and alloying, the true choke point. That diagnosis is accurate and overdue. What makes this moment notable is not rhetoric, but midstream intent—the hardest layer to replicate outside China.

Where the Facts Hold Firm

Reality checks that survive scrutiny.  The recent Defense24 article (opens in a new tab) is strongest when it describes midstream vulnerability. Mining is global; magnet assembly is spreading. Separation, metals, and alloys remain concentrated in China—roughly 85–90% depending on element and year. That is the real bottleneck.

The focus on Less Common Metals, Ionic Technologies, and Metalysis is grounded. LCM’s alloy capability, Ionic’s magnet recycling pathway, and Metalysis’ scandium-aluminum powders all address defense-relevant gaps where purity and reliability matter more than tonnage.

The mention of USA Rare Earth acquiring LCM is, of course, strategically meaningful. Thi signals allied integration, not just national resilience.

Where the Narrative Runs Ahead of Evidence

The tone leans toward existential alarm, sometimes overstating immediacy. China’s export controls have tightened, yes—but they remain selective, license-based, and politically calibrated, not a full embargo. Claims that the UK is “rebuilding sovereignty” should be read as early-stage capability seeding, not near-term independence.

Likewise, recycling is presented as a buffer. It is—but recycling cannot yet supply heavy rare earths (Dy, Tb) at scale. It reduces risk; it does not eliminate it.

Most of the time, no outright misinformation appears; most certainly, there is a compression bias. That is, timelines, scale, and geopolitical certainty are sometimes collapsed for effect. And this mindset can bias the work that truly lies ahead.

Why This Actually Matters for the REE Supply Chain

This story matters because it highlights a Western shift from mining theatrics to midstream realism. Britain is not trying to out-China China. It is trying to outlast chokepoints—with alloys, recycling loops, and defense-grade certification.

For investors, the signal is clear: midstream capability, not ore, is where strategic premiums accrue.

Sources referenced: Daily Telegraph (Dec 2025); UKCMIC/BGS (2024); Mining.com.au (Jul 2025); company disclosures.

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• Investment analyst Amanda van Dyke argues that China's rare earth export controls no longer intimidate Japan or the West, citing diversification since 2010, yet this confidence may be premature.
• Japan has reduced exposure to rare earths through substitution and recycling.
• China retains critical leverage in heavy rare earths processing, refining, and magnet manufacturing, where alternatives remain years away.
• Van Dyke's thesis confuses trajectory with arrival—China's rare earth weapon is no longer decisive but remains disruptive.
• Leverage only fades when substitutes are operating, not just promised.

An investment analyst’s recent thesis (opens in a new tab) is compelling—here’s where it holds, and where it overreaches. In the widely shared Substack essay, Amanda van Dyke—a seasoned mining investor analyst, founder of the Critical Minerals Hub, and board advisor across commodity-focused funds—argues that China’s renewed use of rare earth export controls no longer intimidates Japan or the West. The claim is confident, elegantly argued, and grounded in history. It also warrants a closer look. Remember, for investors, confidence is not evidence.

Van Dyke’s credentials matter. With experience spanning junior mining, capital markets, and policy advocacy, she is no armchair analyst. Her thesis draws a straight line from China’s 2010 rare earth squeeze on Japan to Tokyo’s subsequent diversification—and concludes that Beijing’s favorite lever now delivers diminishing returns. There is real substance here. But there is also narrative compression that markets should unpack.

What She Gets Right—And Why It Matters

Van Dyke is right about how coercion works today. China rarely announces blunt embargoes. Instead, it tightens supply via licensing delays, regulatory ambiguity, and expansive “dual-use” definitions that quietly constrict flows. This is modern tradecraft, not theater.

She is also right that Japan learned the 2010 lesson. Tokyo invested in substitution, recycling, selective stockpiling, and niche processing. The strategy emphasized control and resilience over scale—and that has meaningfully reduced exposure compared with a decade ago. Historically, China’s 2010 move did backfire by accelerating diversification rather than securing capitulation.

Where Confidence Outruns Reality

The assertion that rare earth leverage “no longer scares Japan, or the West” is directionally optimistic but strategically premature. Japan is less exposed—but not immune. Its processing footprint is advanced yet narrow. Heavy rare earth separation, high-performance magnet manufacturing, and scalable non-Chinese alternatives remain globally constrained despite recent Lynas Rare Earth shipments via Sumitomo.

The essay leans heavily on future optionality—deep-sea mining near Minamitorishima, allied supply chains, and Western industrial policy momentum. These are real and important. They are not, however, commercial buffers today, and as we have attempted to educate at _Rare Earth Exchanges_™, not sufficiently comprehensive nor enduring. Markets price what operates, not what is announced, or what’s in the works years from today.

China’s leverage may be weakening over time—but it persists precisely where it matters most: heavy rare earths sourcing, refining, and magnets, not bulk oxides. And alternatives, while promising, are years away as we have chronicled.

The Rare Earth Exchanges Takeaway

Van Dyke’s thesis (opens in a new tab) is directionally credible but chronologically aggressive. China’s rare earth “weapon” is no longer completely decisive—but it remains disruptive to say the least. Japan is better prepared than in 2010. The West is more serious than ever. Declaring victory now, however, confuses trajectory with arrival. It also serves to bolster overconfidence, which, when turning to hubris, becomes dangerous.

In critical minerals, leverage fades only when substitutes are operating—not when they are promised.

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• A Chinese rare earth firm has halted new contracts with Japanese buyers following PM Takaichi's Taiwan contingency remarks, marking the first confirmed refusal under latest export controls.
• Beijing is collapsing the boundary between civilian and military technologies, making rare earth access conditional, revocable, and politically mediated rather than market-driven.
• The move demonstrates that diversification stopping at mining is insufficient—refining capacity and allied industrial coordination remain critical vulnerabilities in the U.S.-China economic confrontation.

A report from The Mainichi Shimbun, one of Japan’s oldest and most credible dailies, captures (opens in a new tab) a seemingly contained, but telling escalation in East Asian geopolitics: a Chinese state-owned rare earth firm has halted new contracts with Japanese buyers and is reviewing existing agreements. The timing is not accidental. The move follows Beijing’s tightening of export controls after remarks by Prime Minister Sanae Takaichi on a potential Taiwan contingency.

This is not a technical trade dispute dressed up as politics. It is politics conducted through supply chains—and in that sense, the framing largely holds.

What the Signal Gets Right

The reporting accurately reflects how Chinese export controls now extend well beyond explicitly military end uses. Officials have widened the definition of “military-related” to include civilian technologies that could enhance defense capabilities. In practice, that collapses the boundary between EV motors, semiconductor tooling, and weapons platforms—exactly where high-performance rare earth magnets live.

The article is also correct to emphasize that this represents the first confirmed refusal of new rare earth contracts for Japanese firms under the latest controls. That matters. Markets move not only on tonnage, but on precedent. Administrative friction, licensing delays, and “stricter reviews” often function as de facto restrictions long before any formal ban appears.

What the Article Leaves Unsaid—but Investors Should Hear

This episode is less about near-term shortages than about option value. China does not need to shut off the supply to exert leverage. It merely needs to remind buyers that access is conditional, revocable, and politically mediated. That reminder alone can reshape boardroom risk models.

To Mainichi’s credit, the reporting avoids alarmism. A pause in new contracts is not a collapse in supply. But for heavy rare earths—where China dominates separation and refining—the signal carries more weight than the headline suggests. Once contracts become politicized, long-term planning becomes fragile, financing becomes more expensive, and diversification harder.

Where Readers Should Stay Skeptical

The article relies heavily on unnamed sources, which is understandable given the sensitivity, but it limits its scope. There is no evidence yet of a coordinated, system-wide cutoff, nor confirmation that existing contracts will be broadly terminated rather than selectively renegotiated. Of course, this could be unfolding, but I am looking for more validation.  This is pressure, seemingly not panic—and readers should resist assuming inevitability.

Why This Matters in the U.S.–China Economic War

This episode sits squarely inside the widening U.S.–China economic confrontation, where rare earths function less as a blunt weapon and more as a persistent strategic lever. It reinforces a hard truth Rare Earth Exchanges™ has stressed since our launch in late 2024: diversification that stops at mining is cosmetic. Japan reduced dependence after 2010, yet it remains exposed because refining capacity, skilled workforce, and allied industrial coordination have lagged.

Rare earths are not being “weaponized” suddenly.

They are being remembered—as leverage accumulated patiently, and now exercised selectively.

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• DEScycle is a UK cleantech company.
• The company secured €1.5M initial funding (up to €6M total) from Germany's SPRIND.
• The funding is for developing next-generation circular metals infrastructure.
• The project targets the recovery of critical and precious metals from e-waste and industrial residues.
• This award indicates Europe's strategic shift toward process-level innovation for ex-China supply chain resilience.
• The project uses low-temperature chemistry-driven recovery methods for decentralized, onshore metal extraction.
• Key challenges include:
  • Industrial-scale economics
  • Feedstock security
  • Regulatory navigation
  • Integration into European and U.S. defense and electronics supply chains
• SPRIND's staged funding model aims to address these challenges.

€1.5M initial award targets disruptive recovery of critical and precious metals as Europe accelerates ex-China supply chains. Rare Earth Exchanges (REEx) is tracking a notable development in Europe’s push to de-risk critical mineral supply chains: DEScycle (opens in a new tab), a UK clean-technology company building next-generation circular metals infrastructure, has been selected for the Tech Metal Transformation Challenge run by SPRIND (opens in a new tab)—Germany’s Federal Agency for Disruptive Innovation.

The program includes an initial €1.5 million award, with potential total funding of up to €6 million, contingent on technical and commercial milestones. SPRIND’s challenge-based model is explicitly designed to move beyond incremental R&D, pushing technologies through scale-up, validation, and deployment—exactly where Europe’s critical raw materials strategy has historically faltered.

Why This Matters for Europe—and Its Transatlantic Partners

Europe faces a dual constraint: growing demand for copper, gold, and specialty metals embedded in electronics and energy systems, alongside heavy dependence on long, geopolitically concentrated supply chains—many still anchored in China. DEScycle’s selection signals German federal interest in process-level disruption, not just substitution of suppliers.

DEScycle’s platform focuses on low-temperature, chemistry-driven metal recovery from complex secondary feedstocks such as e-waste and industrial residues. If scalable, such approaches could shorten value chains, enable decentralized onshore recovery, and complement both European and U.S. efforts to build ex-China metals resilience.

Importantly for Rare Earth Exchanges™ (REEx) readers, this is not framed as a lab-scale “green chemistry” experiment. SPRIND’s mandate is industrial capability creation—suggesting Germany sees potential pathways from demonstration to commercial throughput.

The Promise—and the Hard Questions

DEScycle will collaborate with Seloxium (UK) (opens in a new tab), University of Nottingham (opens in a new tab), and Esy Labs (opens in a new tab) (Germany) under the challenge framework. The ambition is clear. The unresolved questions are tougher—and necessary:

• Throughput & economics: Can low-temperature processes compete with smelting on cost per tonne at industrial scale, not just on emissions?
• Feedstock security: Will Europe generate sufficient, predictable volumes of suitable secondary materials to support decentralized plants?
• Permitting & integration: Can modular recovery systems navigate Europe’s fragmented permitting regimes faster than traditional metallurgical assets?
• Strategic alignment: How will outputs integrate into downstream European and U.S. magnet, electronics, and defense supply chains?

SPRIND’s staged funding suggests these questions are not ignored—but they remain decisive.

A Broader Signal from Berlin

Germany’s decision to back DEScycle aligns with its evolving posture under the EU Critical Raw Materials Act (opens in a new tab): resilience through process innovation, circularity, and domestic capability—not merely stockpiling or trade diplomacy. For U.S. stakeholders, this is also a reminder: Europe is actively funding alternatives that could become partners—or competitors—in the race to build ex-China metals infrastructure.

REEx will continue to monitor DEScycle’s progress under the SPRIND Tech Metal Transformation Challenge, with a focus on scalability, commercial validation, and relevance to transatlantic critical mineral strategies.

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• USA Rare Earth's UK subsidiary, Less Common Metals, will supply rare-earth alloys to Arnold Magnetic Technologies for aerospace and defense magnets.
• Contract volumes, pricing terms, or duration have not been disclosed.
• The deal offers incremental supply assurance, not transformational capacity creation.
• Key questions remain about feedstock scalability, China dependency, and government support.
• USAR shares rose 19% over six months, trading on policy optionality rather than operating fundamentals.
• The partnership is a necessary but incomplete step towards Western magnet supply chain independence.

USA Rare Earth’s latest downstream move—linking its newly acquired alloy business to a U.S. magnet manufacturer—revives a familiar question for investors: is this real supply-chain progress, or another incremental step framed as transformation?

The arrangement connects USA Rare Earth (opens in a new tab) (USAR), its UK-based subsidiary Less Common Metals (LCM) (opens in a new tab), and Arnold Magnetic Technologies (opens in a new tab), a portfolio company of Compass Diversified. Under the arrangement, LCM will supply rare-earth metals and alloys used in permanent magnets serving aerospace and defense markets.

At a strategic level, the message is appealing: strengthen U.S. and allied supply chains while reducing reliance on China. From a _Rare Earth Exchanges_™ (REEx) investor lens, however, the substance matters more than the storyline.

Deal Context: Incremental, Not Transformational

LCM is a credible asset. It has decades of operating history producing samarium, samarium-cobalt, and NdPr alloys, with established relationships across defense and automotive supply chains. USAR’s November 2025 acquisition of LCM meaningfully improved its downstream exposure relative to peers that remain largely upstream or oxide-focused.

Still, this agreement represents supply assurance, not capacity creation. No contract volumes, pricing terms, or duration have been disclosed. There is no announcement of new alloy capacity, magnet manufacturing expansion, or secured non-China separation feedstock. Arnold is diversifying inputs—prudently—but this does not mark a step-change in Western magnet independence.

Investor Lens: What Remains Unanswered

Promotional coverage frames the deal as strengthening U.S. and European supply chains. REEx views that as directionally correct but incomplete. Key questions investors should track include:

• What tonnage and term lengths underpin the relationship?
• How scalable is LCM’s non-China feedstock access at a competitive cost?
• To what extent do LCM inputs still rely on Chinese separation?
• Are government offtake agreements, price floors, or defense-linked guarantees involved?

Absent clarity, the partnership remains strategically interesting but economically uncertain.

Stock Check: Fundamentals vs. Momentum

USAR shares have risen 19% over six months, broadly in line with the sector. Fundamentals remain challenged. Negative forward earnings, limited cash-flow visibility, and weak valuation scores suggest the stock trades more on policy optionality than operating execution—an REEx-flagged pattern across much of the rare earth equity universe.

Peers such as MP Materials and Energy Fuels benefit from clearer government-linked demand signals, though each carries its own geopolitical and execution risks.

REEx Bottom Line

This is a credible but incremental development. It reinforces USAR’s downstream intent and defense-adjacent positioning, but it does not yet resolve the structural bottlenecks—heavy rare earth separation, feedstock security, scale (including refining), and cost competitiveness—that continue to constrain Western magnet supply chains. Investors should treat this as a necessary step, not an end-state.

Source: Zacks Equity Research (opens in a new tab), December 31, 2025

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• Metalysis now operates four Gen 2 units capable of producing over 1 tonne of Al₃Sc alloy annually, significant in a global scandium alloy market estimated at only 3-4 tonnes per year.
• The company has outlined a credible scaling roadmap from Gen 2 (hundreds of kg/year) to Gen 3 (tonnes/year) to Gen 4 (tens of tonnes/year), depending on customer demand and capital availability.
• Success hinges on three constraints:
  • Long-term customer contracts from aerospace and defense sectors
  • Transparent scandium oxide feedstock sourcing
  • Avoiding overbuilding in a still-tiny market

Rare Earth Exchanges recently examined whether Metalysis (opens in a new tab) could help scandium step out of China’s shadow. Following direct feedback from the company, the analysis merits sharpening—not to soften skepticism, but to clarify where scale is plausible and where it remains unproven.

From “Reliable Grams” to Measured Tonnes

In direct communication with Rare Earth Exchanges, the company’s Chief Communications & Marketing Officer rightly notes that Metalysis’s current operations already exceed laboratory novelty. Each Gen 2 unit can produce up to approximately 350 kilograms of Al₃Sc alloy per year, and the company now operates four Gen 2 units, putting theoretical annual capacity above 1 tonne. In a global scandium alloy market often estimated at 3–4 tonnes per year, this is not trivial. 

More importantly, Metalysis outlines a credible scaling ladder:

• Gen 2: Hundreds of kilograms per unit annually (development and early commercial production)
• Gen 3: Designed for tonnes per unit per year
• Gen 4: Engineered for tens of tonnes annually, should demand justify deployment

This matters. Rare earth and critical mineral discussions often collapse into a false binary—either “pilot-scale” or “China-scale.” Metalysis sits in the uncomfortable middle, where capital discipline, customer qualification cycles, and feedstock security determine success more than press releases.

What Actually Holds the Line

The core question is not whether Metalysis can scale on paper. It is how fast—and under whose balance sheet.

Three constraints remain decisive:

1. Customer pull, not policy push

Gen 3 and Gen 4 units will likely materialize only if aerospace, defense, and semiconductor customers sign long-term offtake or qualification-backed contracts. Government rhetoric alone does not finance electrolysis halls.

2. Feedstock transparency

While diversified scandium oxide sourcing is claimed, public clarity on origin, pricing stability, and impurity control remains limited. Midstream scale without upstream certainty is fragile.

3. Capital intensity versus market size

Tens of tonnes sound impressive—until measured against a market still counted in single-digit tonnes. Could overbuilding destroy returns faster than underbuilding risk irrelevance?

The Strategic Read

Metalysis is not attempting to replace China’s rare earth complex. It is pursuing something subtler—and arguably more realistic: owning a controllable Western midstream chokepoint for performance-critical alloys.

If scandium demand expands through AlScN adoption in RF filters, AI hardware, and defense systems or other relevant demands, Metalysis’s modular Gen pathway could scale with the market rather than ahead of it. That is not hype—but neither is it guaranteed.  But Rare Earth Exchanges provides important updated information.

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• Metalysis has started commercial production of high-purity aluminium-scandium alloy powder in the UK.
• This move responds to China's export controls and semiconductor industry demand for 5G RF filters and AI hardware.
• As a midstream processor, Metalysis occupies the most vulnerable link in Western critical-mineral supply chains.
• The company converts scandium oxide into alloys essential for aerospace, defense, and semiconductor manufacturing.
• The current production capacity is limited to approximately 350 kg per year per unit.
• The FFC Cambridge process by Metalysis offers a non-Chinese pathway for strategically critical materials.
• Reliable grams are emphasized over bulk tonnage in their production approach.

A short UK manufacturing update would normally pass unnoticed. This one shouldn’t. According to Machinery Market (Dec. 22, 2025), Metalysis (opens in a new tab) has begun commercial production of aluminium–scandium (Al₃Sc) alloy powder (opens in a new tab), responding to demand accelerated by China’s recent export controls on rare earth elements. That alone makes the news relevant. The deeper significance lies in where Metalysis sits in the rare earth supply chain—and what it is producing.

Scandium is not a bulk rare earth.

It is a performance multiplier, used in small quantities to improve strength, weight, and thermal and piezoelectric properties in semiconductors, aerospace, and defense systems. Supply has long been fragile and heavily concentrated.

Why This Is Not Just Another UK Factory Story

Metalysis is headquartered in South Yorkshire, operating across two UK sites, and is increasingly positioned as a midstream processor—the most vulnerable link in Western critical-mineral strategies. Unlike miners or downstream fabricators, Metalysis converts scandium oxide and aluminium oxide into high-purity alloy, precisely where China’s leverage is strongest.

The company reports producing 36 wt% aluminium–scandium alloy with low impurity levels (oxygen ~500 ppm), aimed at sputtering targets used to deposit aluminium-scandium nitride (AlScN) films. These coatings are central to 5G RF filters, AI-enabled hardware, and advanced wireless systems. This is not speculative demand; it is already part of semiconductor manufacturing roadmaps.

What Holds Up—and What to Watch

What checks out:

• Scandium demand is small but strategic (commonly estimated at 3–4 tonnes per year globally).
• AlSc alloys are increasingly evaluated as replacements for titanium and legacy aluminium in aerospace and defense.
• China’s export controls have intensified Western interest in non-Chinese midstream supply.

What deserves scrutiny:

• Current capacity is limited: Gen 2 units produce ~350 kg per year each.
• Scaling to multi-tonne output depends on Gen 3 and Gen 4 units, which are planned but not yet fully deployed.
• Feedstock relies on diversified scandium oxide suppliers—credible, but not publicly detailed.

No hype here, but no illusion of scale either.

Why Investors Should Care

This is supply-chain leverage in miniature. Semiconductor and defense systems do not need millions of tonnes; they need reliable grams, consistently. Does Metalysis’ FFC Cambridge electrolysis process offer a non-Chinese pathway to exactly that?

When midstream capability is the chokepoint, can small tonnage still move strategic needles?

Company Profile: Metalysis

• Headquarters: South Yorkshire, United Kingdom
• Employees: ~100 (est.)
• Focus: Advanced metal powders via solid-state electrolysis
• Core Technology: Patented FFC Cambridge process
• End Markets: Semiconductors, aerospace, defense

Source: Machinery Market, Dec. 22, 2025.

© 2025 Rare Earth Exchanges™ – Accelerating Transparency, Accuracy, and Insight Across the Rare Earth & Critical Minerals Supply Chain.

• Pensana Plc announces expanded support from:
  • Angola's Sovereign Wealth Fund (FSDEA)
  • M&G Investments
• Support includes a staged:
  • US$15M loan conversion
  • £5M equity commitment
• This support is tied to:
  • Longonjo rare earth project
  • Planned mid-2026 Nasdaq listing
• The Longonjo project details:
  • 22M tonnes at 3.04% TREO
  • Projected output of 20,000-40,000 tpa of magnet feedstock
  • Positioned as ~5% of global supply
  • A non-China alternative for U.S. supply-chain diversification
• Strong points:
  • Shareholder alignment
  • Asset quality
• Execution risks remain around:
  • U.S. offtake agreements
  • Lobito Corridor logistics
  • Capital costs
  • Translating downstream ambitions into operational output

Pensana Plc (opens in a new tab) (LSE: PRE | OTC: PNSNF) has announced renewed and expanded backing from its two largest shareholders—the Angolan Sovereign Wealth Fund (opens in a new tab) (FSDEA) and M&G Investments (opens in a new tab)—supporting the company’s U.S.-focused mine-to-magnet strategy and a proposed Nasdaq listing targeted for mid-2026. The update, released via a Regulatory Information Service (RIS) filing on December 18, outlines balance-sheet restructuring and fresh equity support tied to the flagship Longonjo rare earth project in Angola.

What Was Announced—and What’s Verifiable

FSDEA agreed to a staged conversion of a US$15 million bridging loan, with 50% converted immediately into equity at 24 pence per share, and the remainder structured to manage ownership levels as new institutional investors are introduced. Following admission, FSDEA’s wholly owned subsidiary (ASF Yova Mining Holding Limited) is expected to hold approximately 29.2% of Pensana’s issued share capital. Separately, M&G Investments committed an additional £5 million, announced December 16, reaffirming support for Pensana’s downstream, U.S.-aligned ambitions. These disclosures are clearly articulated in the RIS filing and comply with market rules.

Strategic Context: Why This Matters

Pensana positions Longonjo as a cornerstone asset for Western rare earth supply-chain diversification. The project hosts a JORC-compliant reserve of 22 million tonnes grading 3.04% TREO, including ~139,457 tonnes of NdPrO, with a projected mine life exceeding 20 years. Phase 1 targets 20,000 tonnes per annum of mixed rare earth carbonate (MREC), expanding to 40,000 tpa in Phase 2—roughly 5% of global magnet-capable feedstock at scale. For U.S. investors, the appeal is straightforward: non-China supply, access via the Lobito Corridor, and explicit downstream intent.

Investor Lens: Fundamentals, Technicals, and Open Questions

Fundamentally, asset quality and shareholder alignment are positives. However, financing execution, schedule certainty, and U.S. downstream integration remain decisive variables. The staged conversion eases near-term balance-sheet pressure but increases the equity count—dilution must be matched by measurable progress. From a technical perspective, based on recent trading behavior, the stock has remained range-bound, reflecting event-driven optimism without sustained volume confirmation—typical ahead of major listing milestones.

Rare Earth Exchanges™ has previously documented Pensana’s localization-focused development model, which emphasizes mine-to-magnet integration aligned with U.S. and allied supply-chain priorities.

Key investor questions remain unresolved. When will Pensana announce binding U.S. offtake agreements or downstream partnerships? How resilient is the Lobito Corridor timeline under real-world political, logistical, and financing conditions? And what are the capital expenditure and operating cost sensitivities as the project scales into Phase 2?

REEx Assessment

This announcement is accurate and material. It strengthens Pensana’s strategic narrative but does not remove execution risk. For the United States, the conclusion remains unchanged: America must rebuild its rare earth supply chain, and projects like Longonjo help—but only if financing, logistics, and downstream integration convert ambition into output.

Source: Pensana Plc, Regulatory Information Service Announcement, 18 December 2025.

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• RESourceEU Action Plan elevates healthcare to strategic sector status alongside defense and aerospace, unlocking €3 billion in de-risking capital for medical rare earths, isotopes, and closed-loop recycling infrastructure.
• From 2027, the EU bans exporting MRI and CT scanners for processing outside Europe, creating captive feedstock for domestic magnet recyclers like Neo Performance Materials and hydrogen processing innovators like Mkango/HyProMag.
• Winners include:
  • Neo Performance Materials (Estonia magnet plant)
  • Mkango/HyProMag (hydrogen decrepitation IP)
  • Solvay (gadolinium separation)
• OEMs face 20-40% cost increases short-term before recycling scales by 2030.

The RESourceEU Action Plan marks a structural shift in Europe’s critical raw materials policy by elevating healthcare to the same “strategic sector” tier as defense and aerospace, and it creates a targeted subsidy regime that will reshape profit pools across the medical device and rare earths value chain. While it brings short‑term cost pressure and operational headaches for OEMs such as Siemens Healthineers and Philips, it simultaneously opens a multi‑billion‑euro opportunity for magnet recyclers, chemical processors, and isotope producers positioned to serve a “closed‑loop” European healthcare ecosystem. The companies best placed to benefit are those that already operate EU-based magnet production and recycling assets, control key hydrogen processing IP, or provide high‑value radiopharmaceutical inputs to oncology and nuclear medicine.

From crisis to “strategic” healthcare

RESourceEU is a response to the “Contrast & Magnet Crisis” of late 2024, when shortages of gadolinium and dysprosium exposed Europe’s dependence on Chinese exports for MRI and other imaging technologies. In the new framework, healthcare is explicitly labelled a “strategic sector,” which allows medical applications of rare earths and isotopes to tap into a €3 billion de‑risking capital pool that was previously geared mainly toward energy, EVs, and defense. This fund is designed to bridge the cost gap between low‑priced Chinese materials and higher‑cost European mining and recycling, effectively socializing part of the transition cost in order to build domestic resilience.

The policy does not just aim to add capacity; it attempts to rewire flows. Instead of letting EU hospitals and OEMs rely on imported rare earths and exporting end‑of‑life equipment as scrap, RESourceEU pushes the system towards “urban mining” and closed‑loop recycling of medical hardware and consumables. In parallel, Horizon Europe’s 2025–2027 Health Work Programme is geared to support an innovative, sustainable, and competitive EU health industry that is less reliant on imports of critical health technologies, reinforcing the same strategic direction from the R&D side. Taken together, these strands signal a durable policy shift rather than a one‑off stimulus.

The closed‑loop mandate: how the rules change

The most aggressive change is the prohibition on exporting critical raw materials embedded in “complex medical assemblies” such as MRI and CT scanners for processing outside the EU or designated free‑trade partners from 2027 onwards. Historically, decommissioned MRI units, each containing roughly 500–1,000 kg of NdFeB permanent magnets rich in neodymium and dysprosium, would often be shipped to Asia for low‑value scrap treatment. Under RESourceEU, those magnets must be demagnetised, processed, and either recycled or re‑manufactured within Europe’s regulatory perimeter, creating a captive feedstock base for EU recyclers and processors.

Technically, this is non‑trivial. MRI magnets must first be “quenched” and their liquid helium handled safely before any mechanical or chemical processing can occur. The EU currently lacks large‑scale helium capture infrastructure, and industry voices already flag this “helium bottleneck” as a critical risk: recycling mandates cannot be fully implemented if venting helium remains the default practice. At the same time, RESourceEU explicitly integrates Project HARMONY, which backs hydrogen decrepitation (HD) and related hydrogen processing techniques that can pulverise magnets into reusable powder without acid leaching, preserving rare earth grain structures and meeting Green Deal environmental standards.

Gadolinium, isotopes, and the “hospital mine.”

Beyond magnets, RESourceEU attacks the “gadolinium trap.” Gadolinium‑based contrast agents used in MRI imaging are currently excreted and flushed into wastewater, creating both environmental contamination and a total loss of a strategically important element. The plan earmarks around €150 million for hospital infrastructure that can capture urine from MRI patients for up to 24 hours post‑scan, effectively turning hospitals into small‑scale gadolinium mines whose effluent becomes a recoverable resource. Chemical processors with the ability to separate gadolinium from complex waste streams at an industrial scale will be first in line for these funds.

Healthcare’s new strategic label also extends to nuclear medicine, particularly lutetium‑177, a cornerstone isotope for targeted radiotherapy in oncology. With access to the same de‑risking pool, reactor and processing capacity for Lu‑177 can be co‑funded by the EU, likely depressing long‑term marginal production prices while increasing security of supply for European pharma and radiotherapy centers. This shift redistributes value: commercial isotope producers may see margin compression on commoditised isotopes but stand to gain from higher volume and strategic funding for new facilities and processing nodes.

Who pays: OEMs and hospitals under pressure

In the short term, the cost and operational burden of RESourceEU falls on equipment manufacturers and, indirectly, hospitals. Recycled magnets that comply with EU environmental and content standards currently cost an estimated 20–40% more than virgin magnets sourced from China, raising the bill of materials for MRI and CT scanners. As OEMs reconfigure supply chains, qualify new suppliers, and integrate recycled content quotas, temporary bottlenecks and higher prices for imaging equipment are expected, particularly around 2026–2027 when the new mandates start to bite.

Hospitals, already under budget stress, face a dual challenge: higher capex for compliant equipment and the need to adapt workflows and infrastructure for gadolinium capture and, in some cases, on‑site handling of end‑of‑life magnets. Over time, however, the EU aims for 25% of medical rare earths to come from recycling by 2030, which would reduce exposure to export quotas and price spikes linked to geopolitical tensions. The policy, therefore, trades short‑term inflationary effects for longer‑term supply security and environmental gains.

Neo Performance Materials: the anchor magnet maker

Among publicly listed firms, Neo Performance Materials emerges as a clear early winner. Neo operates a rare earth magnet manufacturing facility in Narva, Estonia, which, as of late 2025, is the only plant inside the EU capable of sintered magnet production ata meaningful scale. The facility, co‑funded by EU Just Transition mechanisms, is designed to supply critical magnets to European automotive, renewable energy, and tech industries, and its role naturally extends to healthcare as RESourceEU channels recycled oxides toward EU‑based remanufacturing.

Under the closed‑loop rules, recycled MRI magnets processed in Europe will require a compliant off‑take route to become new magnets for medical devices, and Neo is positioned as that anchor customer for recycled powders and oxides. The €3 billion de‑risking fund effectively subsidises Neo’s feedstock relative to Chinese competitors by narrowing the cost gap on recycled inputs, supporting both volumes and margins. Market activity already reflects this, with increased trading volume around the announcement window as investors price in the structural European policy tailwind.

Mkango / HyProMag: the hydrogen processing edge

Mkango Resources, via its HyProMag subsidiary, controls key IP around Hydrogen Processing of Magnet Scrap (HPMS), which is effectively the hydrogen decrepitation technology highlighted in Project HARMONY briefings. This process allows magnet scrap from sources such as MRI machines to be broken down into powder in a way that preserves valuable microstructure while avoiding toxic acid baths that would breach EU green standards. Within the RESourceEU framework, HPMS is the de facto reference technology for compliant urban‑mined magnet material.

HyProMag has recently secured a new facility lease in Europe, interpreted in the policy review as a pre‑positioning move ahead of expected RESourceEU innovation grants to scale MRI magnet processing capacity in Germany and the UK. If those grants materialise, Mkango shifts from a speculative rare earth developer to a key gatekeeper in the European medical recycling chain, with upside tied to both license revenues and direct processing margins on high‑value scrap. The risk profile remains high, given execution and funding uncertainties, but the regulatory environment substantially improves the project financeability of HPMS deployment.

Solvay: the chemical heart of gadolinium capture

Solvay’s long‑standing rare earth separation plant in La Rochelle, France, makes it a central candidate to monetise the gadolinium capture push. While magnet recyclers can produce mixed rare earth oxides or powders, only a handful of global players have the industrial solvent extraction circuits to separate gadolinium, dysprosium, and other heavy rare earths from complex feeds at scale, and Solvay sits at the core of that capability in Europe. As hospitals implement urine‑capture infrastructure and magnet recyclers generate increasingly complex scrapstreams, Solvay’s role as a high‑purity separator becomes more valuable.

The €150 million earmarked for gadolinium capture infrastructure, combined with broader CRM Act and Green Deal targets, makes Solvay a likely recipient or partner in demonstration and scale‑up projects for medical waste valorisation. This can translate into expanded throughput, new long‑term contracts with OEMs and hospitals, and a differentiated product line of “EU‑certified recycled oxides” that command a green premium in a bifurcated market. While Solvay’s portfolio is diversified, the convergence of health, environment, and strategic raw materials policy gives its La Rochelle platform a renewed strategic relevance.

The private “HARMONY cohort.”

Beyond listed names, RESourceEU creates a fertile hunting ground for private equity and venture investors focusing on the medical recycling niche. CyclicMaterials, backed by investors such as BMW i Ventures and Energy Impact Partners, positions itself as an “urban mining” specialist explicitly targeting MRI and other large, dangerous magnets that traditional scrap handlers avoid. With export of MRI units for scrap now constrained, hospitals and OEMs need domestic decommissioning partners who can take liability off their balance sheets, and Cyclic is built around monetising that service gap.

In Germany, Heraeus Remloy, part of the larger Heraeus industrial group, already operates magnet recycling lines and is a natural counterpart for German OEMs like Siemens Healthineers. Policymakers view such incumbents as “safe pairs of hands,” making them strong candidates for capacity‑building grants aimed at ensuring reliable domestic recycling routes for hospitals. ITM Isotope Technologies Munich, while primarily a radiopharma company, stands to benefit from strategic‑sector funding for lutetium‑177 production and processing infrastructure, strengthening Europe’s isotopesecurity narrative and increasing the strategic premium on its oncology-linked capabilities.

A new green‑premium asset class

On the trading side, RESourceEU catalyses a “green premium” asset class centered on EU‑certified recycled oxides and magnet materials, which medical OEMs must increasingly procure to meet content mandates. Futures and off‑take contracts tied to these compliant materials command higher prices than generic oxides, reflecting both compliance value and limited supply as recycling infrastructure ramps. Exchanges and specialised platforms dealing in rare earth contracts will need to adapt contract specifications and certification criteria to reflect this new differentiation.

Healthcare’s strategic status also changes how investors price isotope assets. EU‑backed reactors and processing facilities for lutetium-177 and other medical isotopes will likely flatten long-term price curves and reduce geopolitical risk premia, even as they cap upside for high‑cost producers. For pharma and radiotherapy centers, however, lower and more predictable isotope costs reduce treatment volatility and support broader adoption of targeted radionuclide therapies across the Union. In that sense, the value created is not just financial but also clinical, as supply security underpins the expansion of advanced cancer care.

Outlook: who profits from the pivot

Over the next decade, RESourceEU will redirect value from low‑cost overseas suppliers toward a network of European recyclers, processors, and specialist technology providers integrated into a closed‑loop healthcare raw materials system. Neo Performance Materials, Mkango/HyProMag, and Solvay form the backbone of the public market opportunity set, each occupying a distinct but complementary niche in magnet manufacturing, hydrogen processing, and chemical separation. Around them, private actors like Cyclic Materials, Heraeus Remloy, and ITM stand to capture decommissioning, recycling, and medical isotope upside, respectively, with heightened potential for IPOs or strategic M&A in the 2026–2027 window as policy funding and OEM demand crystallise.

For OEMs and hospitals, the transition will feel disruptive, with higher equipment costs, new compliance obligations, and operational changes around waste and decommissioning. Yet once the helium bottleneck is addressed and recycling capacity matures, Europe’s healthcare system is likely to enjoy more robust access to critical materials, reduced exposure to external shocks, and an emerging competitive edge in “green‑compliant” medical devices that meet rising global expectations on sustainability and strategic autonomy.

1. https://ppl-ai-file-upload.s3.amazonaws.com/web/direct-files/attachments/1074713/93677360-effd-4e10-a12f-7d6f8b0fa4bc/Policy-Review.docx (opens in a new tab)
2. https://research-and-innovation.ec.europa.eu/document/download/889d60c2-3cfb-4d94-8e17-8ebdd238b0c3_en (opens in a new tab)
3. https://hydrogeneurope.eu/wp-content/uploads/2023/06/CRM-Act-Hydrogen-Europe-position-paper_clean.pdf (opens in a new tab)
4. https://finance.yahoo.com/news/neo-performance-materials-opens-state-110000111.html (opens in a new tab)
5. https://rm.coe.int/cefr-companion-volume-with-new-descriptors-2018/1680787989 (opens in a new tab)
6. https://www.arts.gov.au/sites/default/files/documents/national-indigenous-languages-report-lowres.pdf (opens in a new tab)
7. https://www.universityofgalway.ie/media/collegeofartssocialsciencescelticstudies/schools/humanities/english/3BA_4BA-Course-HANDBOOK-2025-26,-150820251020.docx (opens in a new tab)
8. https://www2.nzqa.govt.nz/assets/About-us/Official-releases/2024-2025/Development-US32406-Maths-corequisite-assessment-T2-2024OC01159-.pdf (opens in a new tab)
9. https://www.theassignmenthelpline.com/sample_computer-science-and-it.html (opens in a new tab)
10. https://aclanthology.org/2023.mtsummit-users.pdf (opens in a new tab)
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© 2025 Rare Earth Exchanges™ – Accelerating Transparency, Accuracy, and Insight Across the Rare Earth & Critical Minerals Supply Chain.

• University of Birmingham researchers demonstrate hydrogen decrepitation successfully embrittles Sm₂Co₁₇ magnets in rotor assemblies, absorbing approximately 0.2 wt% hydrogen regardless of constraint—but liberation requires additional mechanical agitation and demagnetization steps.
• Scalable SmCo magnet recycling could reduce Western dependence on China-dominated samarium and cobalt supply chains by converting aerospace and defense scrap into reusable powder feedstock.
• The study reveals HD is not a one-step solution: constrained magnets don't automatically fall out as powder, and high Curie temperatures make demagnetization energy-intensive, requiring integrated processing systems for commercial viability.

A new open-access study led by James Griffiths, PhD, (opens in a new tab) University of Birmingham, with collaborators O.P. Brooks, V. Kozak, H. Kitaguchi, D. Brown, A. Campbell, A. Lambourne, and R.S. Sheridan reports that hydrogen decrepitation (HD) can meaningfully embrittle and enable powder recovery from samarium–cobalt 2:17 (Sm₂TM₁₇) sintered magnets extracted from scrap rotor assemblies.

These high-performance magnets—used in aerospace, defense, and industrial machines operating at elevated temperatures—are built on critical materials (samarium and cobalt) that sit inside geopolitically fragile supply chains. In controlled experiments, the team exposed both loose magnets and magnets still constrained inside rotors to hydrogen at 2–10 bar, 100 °C for 72 hours, then measured hydrogen uptake, lattice expansion, and magnetic property changes.

The headline result is both encouraging and sobering: constrained magnets absorb hydrogen just as effectively as loose magnets, but they do not reliably fall out of rotor housings as powder without additional mechanical agitation and a demagnetization step. Hydrogen decrepitation helps—but it is not a one-step “magic recycling” solution.

Why This Matters for Rare Earth Exchanges™ Readers

Samarium (a rare earth) and cobalt (a critical metal) underpin some of the most demanding magnet applications in the world. While this study is about recycling, not geopolitics, the strategic implication is clear: every viable recycling route that converts end-of-life magnets into usable feedstock reduces dependence on virgin supply chains, where China dominates processing, metals, and magnet manufacturing. Recycling alone will not dismantle China’s midstream leverage, but it can chip away at the “separation wall” by turning scrap into strategic inventory.

Study Methods — In Plain English

The researchers examined Sm₂TM₁₇ magnets (TM = Co, Fe, Cu, Zr) in two realistic conditions:

• Loose magnets (removed arc segments)
• Constrained magnets (still compressed inside rotor assemblies)

They subjected samples to hydrogen under controlled pressure and temperature, then used advanced materials and magnetic characterization tools—SEM/TEM microscopy, X-ray diffraction with Rietveld refinement, residual gas analysis, particle-size measurements, and vibrating sample magnetometry—to answer three practical questions:

1. Do constrained magnets still absorb hydrogen?
2. Does HD alone free powder from rotor assemblies?
3. Does HD destroy the magnet’s coercivity mechanism?

Key Findings

• Hydrogen uptake is similar whether magnets are loose or constrained (~0.195–0.233 wt%), with unit-cell volume expansion of ~1.35–1.87%.
• Physical constraint blocks crack propagation: magnets become highly embrittled but are not liberated as powder from rotors without mechanical agitation.
• Magnetized rotors do not demagnetize during HD, though magnetic properties decline—likely due to hydrogen-induced lattice strain affecting exchange coupling, not destruction of the domain-wall pinning coercivity mechanism.
• Best recovery requires a combined process: hydrogen exposure plus mechanical agitation and a demagnetization step (likely reverse-field demagnetization and/or thermal methods).

Implications: A Recycling Wedge Against Midstream Dominance

This study reinforces a core REEx theme: the West’s vulnerability is not just mining—it’s usable materials. SmCo magnets are “high-performance, high-consequence” components. A scalable recycling pathway could mean:

• Lower virgin samarium and cobalt demand per unit of output
• Greater feedstock certainty for allied magnet and motor manufacturers
• Improved lifecycle economics if recovery scales and contamination is controlled

This does not replace separated rare-earth supply, but it meaningfully reduces pressure on it—an incremental but important step in a system where China’s processing leverage can be exercised through licensing and export signaling.

Limitations and Controversial Considerations

• HD does not automatically free magnets from rotor housings, limiting throughput unless disassembly and agitation systems are engineered.
• Demagnetization is a real hurdle: Sm₂TM₁₇ magnets have very high Curie temperatures, making thermal demagnetization energy-intensive; reverse-field approaches may be more practical but add complexity.
• Coatings and adhesives in real-world rotors can contaminate powder streams and require preprocessing.
• Data availability is confidential, limiting full independent reproduction.
• Competing interest disclosure matters: the lead author reports Rolls-Royce funding and a pending patent related to SmCo magnet recycling—legitimate, and relevant for investors.

Conclusion

This study represents a credible technical advance toward converting end-of-life SmCo rotor magnets into reusable powder feedstock—an outcome that, if scaled, could modestly but meaningfully reduce Western exposure to China-dominated magnet materials. It also makes the industrial reality plain: constraint and magnetization are not edge cases; they are the real recycling challenge. Hydrogen decrepitation helps, but efficient recovery will require integrated mechanical and demagnetization solutions, not chemistry alone.

The IP

James Griffiths has a patent #Samarium Cobalt Magnet Recycling GB202408808D0 pending to Rolls-Royce Plc. If there are other authors, they declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.

Citation:

Griffiths, J. et al. “Hydrogen decrepitation of Sm₂TM₁₇ sintered magnets from scrap rotor assemblies.” Journal of Magnetism and Magnetic Materials 639 (1 Feb 2026) 173755. https://doi.org/10.1016/j.jmmm.2025.173755 (opens in a new tab)

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• USA Rare Earth holds $400M+ cash and targets 1,200 MT magnet capacity by end-2026 through its Stillwater facility.
• The company remains pre-revenue with significant operating losses.
• USA Rare Earth's integrated mine-to-magnet strategy depends on the high-risk Round Top deposit in Texas.
• The Round Top deposit is estimated to cost ~$50M for the pilot phase alone before reaching production.
• USA Rare Earth's acquisition of Less Common Metals aims to de-risk supply.
• The planned 20,000 MT strip-casting capacity aims to de-risk supply as well.
• Near-term margins remain exposed to supplier concentration and feedstock volatility.

A December 16 Zacks note (opens in a new tab) spotlights a familiar tension in the U.S. rare earth buildout: strategic urgency versus near-term financial drag. USA Rare Earth, Inc. (NYSE: USAR) is pursuing an integrated mine-to-magnet strategy anchored by the Round Top deposit in Texas and a scaling magnet plant in Stillwater, Oklahoma, while continuing to post losses as projects remain pre-revenue.

What the News Gets Right

Zacks is directionally correct: USAR is still in build mode, and rising operating expenses are pressuring near-term margins. The company’s own materials reinforce that this is a capex- and headcount-intensive ramp with material quarterly spend still ahead.

What the Company Presentation Adds

The November 2025 investor deck adds context that matters for investors: USAR highlights a $257M cash position as of Sept. 30, 2025 and a $400M+ cash position as of Nov. 3, 2025, describing itself as debt-free.

USAR also lays out concrete magnet manufacturing milestones: the Stillwater facility is designed for 5,000 MT capacity (expandable to 10,000 MT), with Line 1a (600 MT) commissioning targeted for Q1 2026 and Line 1b (additional 600 MT) targeted for 2H 2026, reaching 1,200 MT by year-end 2026.

The acquisition of Less Common Metals (LCM) is positioned as a pivotal de-risking step: USAR cites 30 years of operating history, +1,500 MT metal-making capacity, and plans for ~20,000 MT strip-casting capacity over the next decade.

The Risks Investors Must Price In

USAR’s biggest risk is still the same: durable, cost-controlled feedstock plus refining/processing execution at scale. Round Top is explicitly described as a long-term, high-risk, capital-intensive project, with a staged path through flowsheet development, PFS, and a pilot plant that management estimates could cost up to ~$50M.

Until Round Top reaches production, USAR’s magnet scale-up will likely depend on a combination of LCM metals/alloys, recycling pathways, and other non-Round Top inputs—which can expose margins to supplier concentration and price volatility.

Stock Check

Your Yahoo Finance snapshot supports the “pre-revenue,valuation-on-optionalities” profile: $2.0–$2.1B market cap, negative EBITDA (–$39M TTM), and large net losses (~–$285M TTM), with meaningful short interest—evidence that the market is split between strategic believers and execution skeptics.

Bottom Line

USAR is doing the hard work the U.S. supply chain needs—building magnet capacity and acquiring real metallurgical know-how. But investors should treat the story as execution-first: feedstock security and scaled refining will determine whether this becomes a cornerstone—or remains a well-funded development narrative.

Source: ZacksEquity Research, Dec. 16, 2025; USA Rare Earth Investor Presentation, Nov. 2025.

© 2025 Rare Earth Exchanges™ – Accelerating Transparency, Accuracy, and Insight Across the Rare Earth & Critical Minerals Supply Chain.

• Arnold Magnetic Technologies' supply agreement with Solvay and Less Common Metals secures Western-origin NdPr access from La Rochelle, with planned Dy and Tb expansion by 2026.
• The deal represents operational continuity over rhetoric, as a downstream manufacturer proactively derisk supply chains rather than waiting for government or mining solutions.
• While securing access and optionality, the agreement provides insurance not independence—Western rare earth supply remains thin, expensive, and capacity-constrained.

Arnold Magnetic Technologies’ newly announced (opens in a new tab) supply agreement with Less Common Metals (LCM) and Solvay is not splashy news. It is, however, consequential. In an era defined by rare earth fragility, this deal reflects a mature manufacturer doing what policymakers keep promising but rarely execute: locking in Western-origin inputs before the next supply shock. For investors who track the magnet value chain rather than just mining headlines, this is a sober, intelligent move.

Arnold is not a miner. It is a downstream operator with real customers in aerospace, defense, motorsport, and energy—markets that care less about rhetoric and more about delivery. Securing NdPr access now, with a credible pathway to Dy and Tb from Solvay’s La Rochelle platform, reads as operational continuity—not just a glossy announcement.

What the Release Nails—and Why Investors Should Care

The factual spine is strong. Solvay inaugurated and began ramping rare earth production capability at La Rochelle in April 2025, positioning NdPr as the near-term anchor while signaling a broader light/heavy rare earth roadmap. The company’s stated intent to add Dy and Tb within 2026 fits both its public messaging and the EU’s strategic logic—though scaling remains the hard part.

LCM remains one of the few Western specialists with genuine alloy-making know-how—an unglamorous chokepoint between oxides and magnets that matters more than most headlines admit.  LCM is now part of USA Rare Earth.

Arnold’s multinational footprint adds credibility: this is not a paper supply chain. These are facilities that already turn materials into magnet-grade products at industrial tempo, even if some exposure to China’s ecosystem remains.

Where the Poetry Gets Ahead of the Physics

The phrase “long-term stability” deserves tempering. Western supply is still thin, expensive, and capacity-constrained. La Rochelle can be strategically meaningful without being volumetrically dominant. This agreement secures access and optionality, not abundance. It is insurance, not independence.

There is also a quiet commercial truth: pricing power often sits upstream with separators and processors, especially in tight markets. Arnold may gain reliability and contracting flexibility more than it gains cost advantage—and that distinction will matter in margins.

The Signal Beneath the Signing

What’s notable is not that a deal was signed—it’s who is acting first. Downstream manufacturers are no longer waiting for governments or junior miners to “solve” rare earths. They are stitching together survivable supply chains themselves: quiet contracts, partial derisking, incremental Westernization. No silver bullets. Just industrial realism.

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