• 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)

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

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

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

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

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

Import Reliance Fell—Then Rose Again

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

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

The Hard Wall: Heavy Rare Earths

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

Concentrate Records Aren’t the Finish Line

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

A Reality Check from the Ore Body

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

REEx Take

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

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

• U.S. proposes multilateral price floors for critical minerals to keep non-Chinese producers viable after China's 2024 export restrictions exposed supply chain vulnerabilities across defense, automotive, and semiconductor sectors.
• China controls over 90% of global rare earth processing capacity, with refining infrastructure requiring 5-7 years to build—making price defenses a time-buying measure rather than a structural solution.
• A temporary accommodation between U.S. and China on rare earth access is approaching expiration, with uncertain prospects for extension as Washington pushes allies like South Korea toward a more binding commercial framework.

After China temporarily restricted rare earth exports last year—jolting U.S. defense, automotive, semiconductor, and battery supply chains—Washington is proposing a multilateral trade bloc to blunt Beijing’s leverage. At a February 4 ministerial hosted by Secretary of State Marco Rubio, U.S. officials outlined a plan to defend minimum prices for critical minerals among allies, using tariffs or other measures if China undercuts markets. The objective is straightforward: keep non-Chinese producers economically viable long enough to scale.

What’s Firm—and What’s Still Vapor

Vice President J. D. Vance was unusually direct, arguing that volatile prices and alleged predatory underselling have made Western investment uneconomic. The proposal envisions price floors across production stages, triggered when market prices fall below agreed thresholds. Rubio linked the idea to complementary tools—strategic stockpiles such as Project Vault and coordinated public finance—to give the concept institutional weight.

These signals are real. So is the motivation: China’s export controls exposed how dependent the U.S. remains on rare earth inputs. What remains undefined are the mechanics—specific floor levels, enforcement rules, loss-sharing, and timelines aligned with industrial reality.

The Choke Point Everyone Knows—but Few Can Fix

Hankyoreh gets the central constraint right: refining and separation, not mining. China controls over 90% of global rare earth processing, built on decades of solvent-extraction expertise, precise temperature control, and skilled labor. The reporting notes that building refineries and achieving consistent yields typically takes five to seven years, making hopes for rapid stabilization optimistic at best. Price defenses can buy time; they cannot substitute for chemistry, engineers, and IP.

Allies in the Middle

South Korea’s position (opens in a new tab) captures the dilemma. Closer alignment with a U.S.-led bloc could reduce dependence on China and add resilience, but it carries economic and diplomatic trade-offs. Rubio praised Seoul’s leadership in the Minerals Security Partnership (MSP)—now potentially giving way to a more binding commercial framework—signaling Washington’s intent to move from coordination to enforcement.

About the Source

Hankyoreh is a major South Korean daily newspaper known for detailed foreign policy reporting and a progressive editorial stance. Its coverage often reflects allied concerns while scrutinizing U.S. strategy—useful context for readers weighing tone and emphasis.

REEx Take

This initiative is a credible counterpunch—but it risks overestimating what pricing policy can achieve without midstream muscle. Price floors buy time; processing capability wins markets. Until the West closes the refining gap, China’s dominance remains structural, not tactical.

At present, the United States and China are operating under a temporary accommodation on rare earths, following a limited reprieve granted by Beijing after last year’s export controls disrupted global supply chains. This arrangement has eased immediate pressure on select U.S. industries, but it is explicitly time-bound. As the deadline on this reprieve approaches, the path forward remains uncertain. Whether China extends, modifies, or withdraws this accommodation will have significant implications for pricing, availability, and downstream manufacturing resilience. Rare Earth Exchanges™ will monitor developments closely as the expiration window narrows and strategic signals from both governments emerge.

Source: Hankyoreh (South Korea)

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

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

Why This Deal Matters

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

From China to the Western Stack

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

What the U.S. Gets

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

Context: China Still Moves the Board

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

REEx Take

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

• U.S. partners with the EU, Japan, and Mexico on coordinated trade rules and price floors to reduce critical minerals dependence on China for defense and tech manufacturing.
• Vice President JD Vance acknowledges 'the market is failing,' signaling a shift toward binding plurilateral agreements and rule-based mineral coordination.
• Price floors could de-risk Western mining projects, but success requires synchronized midstream build-out, workforce programs, and allied financing beyond stockpiles.

The U.S. says itwill work with the European Union, Japan, and Mexico to reduce dependence on China for critical minerals used in defense, energy, and high-tech manufacturing. Announced at a Washington ministerial hosted by JD Vance and Marco Rubio, the plan includes coordinated trade rules, possible price floors, and fast-tracked agreements—building on President Trump’s proposed $12 billion minerals stockpile. The goal: stabilize prices, unlock investment, and rebuild supply chains outside China.

Solid as a Rock—and Why It Matters

According to Rare Earth Exchanges™ (REEx) yesterday, plus Reuters and Bloomberg, U.S. Trade Representative Jamieson Greer confirmed plans with the European Commission and Japan to develop “action plans” for resilience, including border-adjusted price floors. This is notable. REEx has long argued that price volatility—not geology—is the main killer of Western projects. Price floors, if real, could finally de-risk capital across mining, processing, and manufacturing.

Vice President JD Vance—Recognizing the “Market” is Not Enough

Equally important is the language around a binding plurilateral agreement. That signals a shift from ad-hoc deals to rule-based coordination—something China has practiced for decades.

Where the Fog Creeps In

Details remain thin. Which minerals? What floor levels? Who funds losses if markets fall? Mexico’s 60-dayaction plan gestures toward joint projects but names none. Canada’s absence—despite attending—raises questions about North American coherence ahead of the USMCA review.

There’s also a subtle media bias toward treating the stockpile as a solution. REEx’s view: stockpiles buy time; industrial policy builds power. Without synchronized midstream build-out, workforce programs, IP protection, and allied financing, price floors risk becoming political slogans.

Why This Moment Is Different

Vance’s blunt admission—“the market is failing”—matters. It legitimizes intervention. If followed by enforceable pricing mechanisms and multinational execution, this could mark the real start of a Western critical-minerals bloc.

• Chengdu Ascend Magnetic Technology has suspended SmCo magnet production due to China's tightening export controls on rare earths, including samarium, which has required government export permission since April 2025.
• SmCo magnets are critical for aerospace, defense, and high-temperature applications due to their exceptional thermal stability (300-550°C) and corrosion resistance.
• There is far more limited global capacity for SmCo magnets compared to NdFeB magnets.
• The production halt highlights the urgent need for Western defense and aerospace industries to:
  • Diversify suppliers
  • Develop non-China SmCo capacity
  • Establish long-term offtake strategies outside China's dominance

Chengdu Ascend Magnetic Technology & Products Co., Ltd., a specialized producer of samarium cobalt (SmCo) permanent magnets, has halted its SmCo operations, according to industry sources, including Asian Metal and regional rare-earth market trackers. The suspension, reported February 5, 2025, comes amid a broader tightening of China’s export controls on rare earths—including samarium, which has required government permission for export since April 2025.

Chengdu, China

Chengdu Ascend focuses on the R&D, production, and sales of SmCo magnets, a niche but strategically important class of magnets prized for exceptional thermal stability (typically 300–550°C), corrosion resistance, and performance in harsh environments. These characteristics make SmCo magnets indispensable for aerospace, defense, oil & gas, and high-reliability industrial applications, where neodymium magnets often fall short.

Industry sources indicate the production halt aligns with wider adjustments across China’s magnet and new-energy sectors, where export licensing, compliance costs, and policy uncertainty have reshaped operating decisions. SmCo production is capital-intensive and relies on specialized furnaces and processing equipment, amplifying sensitivity to regulatory friction.

Why this matters: SmCo capacity is far more limited globally than NdFeB. Any disruption—especially from China, which dominates rare-earth processing—can tighten supply, extend lead times, and raise prices for Western buyers already navigating export controls.

Implications: Does this purported halt reinforce the case for non-China SmCo capacity, recycling, and long-term offtake strategies in allied markets? We think so. For defense and aerospace primes, it underscores the urgency of supplier diversification and qualification outside China.

Company Profile

Headquarters:                 Chengdu, Sichuan Province, China
Founded:                          Estimated 2015 (exact year not publicly disclosed)
Ownership:                      Privately held Chinese company (not publicly traded)
Corporate                        Structure: Independent operating company (not a listed subsidiary of a major SOE)

Core Business & Specialization

Chengdu Ascend Magnetic Technology & Products Co., Ltd. (often referred to as CAM-Magnet) is a specialist manufacturer of high-performance rare earth permanent magnets, with a particular focus on Samarium Cobalt (SmCo) materials. The company positions itself as a dedicated factory serving technically demanding applications that require high thermal stability, corrosion resistance, and long service life.

SmCo magnets produced by CAM-Magnet are typically used in aerospace, defense-related components, high-temperature industrial motors, oil & gas tools, and precision instrumentation, where NdFeB magnets are unsuitable due to heat or environmental constraints.

Products & Capabilities

• Primary products:
  • SmCo 1:5 and SmCo 2:17 permanent magnets
  • Custom-shaped and application-specific magnet assemblies
• Key performance attributes:
  • Operating temperatures commonly 300–550°C (grade dependent)
  • Strong resistance to oxidation and corrosion
• Manufacturing scope:
  • Powder metallurgy, sintering, machining, and magnetization
  • Small-batch, high-spec production rather than mass-volume output

Sources: Asian Metal; regional rare-earth industry trackers (Feb. 2025).

• VACUUMSCHMELZE secured EN910 certification for its Horna Streda, Slovakia facility, expanding its aerospace and space-grade manufacturing footprint beyond Hanau, Germany.
• The EN910 certification validates VAC's quality management system for the demanding aviation, space, and defense industry, enabling access to aerospace procurement pathways and prime contractor credibility.
• Plans to extend certification to permanent magnets built by VAI, building an audit-ready aerospace capability outside China’s magnet ecosystem as it moves towards a launch in an American facility.

Germany-based magnetic materials and permanent magnet producer VACUUMSCHMELZE (VAC) announced it has successfully achieved EN 9100:2018 certification for its Horna Streda, Slovakia operations, expanding its certified aviation and space manufacturing footprint beyond its longstanding certified base in Hanau, Germany. The certification, conducted by DEKRA Certification GmbH, (opens in a new tab) validates that VAC’s quality management system meets the demanding requirements expected across aerospace and space supply chains.

EN 9100:2018 (equivalent to AS9100D) is the premier international quality management system (QMS) standard for the aviation, space, and defense (ASD) industry. Based on ISO 9001:2015, it adds critical requirements for safety, reliability, and regulatory compliance, ensuring rigorous control over design, production, and supply chain processes. 

VAC reports that the Hanau scope includes development, application support, product design, production, and sales of special magnetic materials spanning crystalline and permanent magnet value chains. The newly certified Horna Streda site currently covers the crystalline value chain, with plans to extend certification to the permanent magnet value chain by 2028.

For Rare Earth Exchanges™ subscribers, the signal is clear: EN 9100 is more than a plaque—it is a gate pass. It helps a magnet manufacturer qualify for aerospace and defense procurement pathways, tighten traceability and process control, and win credibility with prime contractors.

As VAC moves toward launching a major facility in America, this certification strengthens its narrative: building not just capacity—but aerospace-grade, audit-ready capability outside China’s magnet ecosystem.

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

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

Howard Lutnick, Secretary of Commerce

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

The Part That Rings True: Chokepoints Are Real

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

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

The Leap of Faith: From Rhetoric to Capacity

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

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

Reading Between the Lines

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

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

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

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

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

Source: The Washington Times, Feb. 5, 2026

• The House passed H.R. 4090, the Critical Mineral Dominance Act, with a vote of 224-195.
• The act aims to accelerate domestic mining of critical minerals on federal lands.
• It requires the Interior Department to identify priority projects within 10 days and streamline permitting processes.
• The mining industry and labor groups view the bill as essential for national security and reducing foreign dependence.
• Republicans argue the bill maintains necessary oversight despite faster approvals.
• Democrats and environmental groups oppose the measure, citing potential undermining of environmental protections and a lack of tribal consultation.
• There are warnings that the bill could benefit foreign mining corporations without ensuring minerals remain in U.S. supply chains.

The U.S. House of Representatives on Wednesday approved sweeping legislation aimed at accelerating domestic mining on federal lands, marking a major step in Congress’s push to secure U.S. supplies of minerals critical to energy, defense, and advanced manufacturing.

Lawmakers voted 224–195 to pass H.R. 4090, the Critical Mineral Dominance Act, sponsored by Rep. Pete Stauber (R-Minn.), chair of the House Natural Resources Subcommittee on Energy and Mineral Resources. Ten Democrats joined Republicans in supporting the bill; one Republican voted against it. The legislation previously advanced out of committee last year on a 26–16 vote.

What the Bill Does

The measure would codify elements of President Donald Trump’s executive actions on critical minerals and direct the Department of the Interior to aggressively identify, prioritize, and expedite mining projects on federal land, including National Forest System lands and other public lands eligible for hardrock mineral development.

Under the bill, Interior Secretary Doug Burgum would be required to:

• Report all federal mining permit applications to Congress
• Identify “priority projects” within 10 days that can be fast-tracked for approval
• Survey and prioritize federal lands with high potential for rapid, high-impact mineral development
• Suspend, revise, or rescind regulations deemed “unduly burdensome” to mining projects
• Accelerate geologic mapping to better identify domestic mineral resources

The department would also be tasked with reporting on the economic cost of U.S. dependence on imported mineral commodities, a provision supporters say underscores national security risks tied to foreign supply chains.

Support from Industry and Labor

Mining industry groups welcomed the vote, arguing the bill brings long-needed urgency to U.S. mineral policy.

Rich Nolan, CEO of the National Mining Association, said the Trump administration has already taken steps to bolster domestic mining and that congressional action is needed to lock those policies into law. Rep. Stauber framed the legislation as a signal that Congress intends to move faster on critical minerals without abandoning oversight. “Nothing in this bill greenlights any mining project without necessary scrutiny,” he said during floor debate. “We need to get serious about our critical mineral strategy.”

Sharp Opposition from Democrats and Environmental Groups

Democrats and conservation organizations blasted the bill as a rollback of environmental safeguards and public-land protections. Critics argue it prioritizes speed over consultation with tribes, local communities, and environmental stakeholders.

Ashley Nunes of the Center for Biological Diversity called the measure “a blank check to foreign-owned mining corporations,” warning that raw materials could still be exported for processing abroad, particularly to China.

Rep. Jared Huffman (D-Calif.), ranking member of the House Natural Resources Committee, argued the bill would enrich mining giants while failing to ensure domestically mined minerals remain in U.S. supply chains. He also criticized the absence of stronger guardrails to prevent foreign adversaries from benefiting from accelerated permitting.

What Comes Next

With House passage secured, the bill now heads to the Senate, where its prospects remain uncertain amid narrower margins and continued debate over environmental review, tribal consultation, and downstream processing requirements.

Still, Wednesday’s vote underscores a bipartisan—if deeply contested—recognition that critical minerals have become a central pillar of U.S. industrial and national security policy, and that Congress is increasingly willing to intervene to reshape how mining is permitted on federal land.

Source: E&E News (opens in a new tab) by POLITICO

Bill text and CRS summary: https://www.congress.gov/bill/119th-congress/house-bill/4090 (opens in a new tab)

• China signals measured opposition to EU-U.S. critical minerals partnership while maintaining 'market principles' rhetoric, avoiding direct threats or escalation despite tracking Western diversification efforts closely.
• The one-year reprieve on rare earth export restrictions China granted the U.S. in 2025 is nearing its end, with American supply chains still years away from achieving resilience in separation, metals, and magnet manufacturing.
• Beijing's calm diplomatic tone may reflect confidence rather than concession, as it holds leverage over critical minerals while the U.S. and allies race to accelerate midstream capacity before potential supply disruptions.

China’s Foreign Ministry signaled (opens in a new tab) firm but measured opposition on Tuesday to reported discussions between the European Union and the United States over a proposed critical minerals partnership aimed at reducing reliance on Chinese supply chains. And of course, the USA on Wednesday, February 4th, hosted the 2026 Critical Mineral Ministerial (opens in a new tab) involving many dozens of nations.

Speaking at a regular press briefing, Foreign Ministry spokesperson Lin Jian was asked by a Bloomberg reporter to comment on news that several foreign ministers were meeting in Washington to consider an also the EU-backed framework for cooperation on critical minerals.

Lin responded that China’s position “has not changed,” emphasizing that all countries share responsibility for maintaining the stability and security of global critical-mineral supply and industrial chains. He added that China believes parties should play a “constructive role” in safeguarding those systems.

Addressing references to a possible EU–U.S. memorandum of understanding, Lin reiterated Beijing’s long-standing stance: countries should adhere to market-economy principles and international trade rules, strengthen communication and dialogue, and work together to keep global industrial and supply chains “stable and unimpeded,” in order to support steady global economic growth.

Notably, Lin did not directly criticize the EU or the United States, nor did he threaten retaliation or name China explicitly as the target of diversification efforts—an omission that appears deliberate.

Why This Matters for Business and the West

The significance here is not what China said—but how it said it.

• Acknowledgment without endorsement: Beijing implicitly confirms it is tracking—and taking seriously—EU–U.S. coordination on critical minerals.
• Rules-based framing: By invoking “market principles” and “international trade rules,” China positions itself as a defender of the existing trade order, even as Western policymakers argue that the current system is structurally distorted by state-directed capacity.
• No escalation—for now: The absence of threats or new export measures suggests Beijing is observing first, not reacting publicly.

For U.S. and European firms, this reinforces that supply-chain diversification is being interpreted as a geopolitical signal, not a neutral industrial policy.

The One-Year Reprieve: A Quiet Clock Is Ticking

What went unsaid at the podium—but looms large for industry—is that China effectively granted the United States a one-year reprieve on rare earth access following the tightening of export licensing and controls in 2025. While never branded as a formal exemption, licensing flexibility and continuity of shipments functioned as a temporary pressure release valve, allowing U.S. defense (at least partially), automotive, and advanced-manufacturing supply chains to avoid immediate disruption.

That window is now nearing its end.

Despite unprecedented policy activity in Washington and allied capitals, the U.S. is not close to resilience across the rare earth value chain—particularly in separation, metals, alloys, and magnet manufacturing. New projects remain years from scale. Recycling helps at the margin. Stockpiles buy time—but do not replace production.

The Strategic Question No One Wants to Answer—Yet

As the reprieve winds down, a set of uncomfortable questions emerges:

• Will China quietly tighten licensing again, using “market rules” rather than bans?
• Will pricing, delays, or compliance frictions become the preferred pressure tools?
• Can the U.S. and its allies accelerate midstream capacity fast enough to avoid a supply shock?

Beijing’s calm tone may signal confidence—notconcession.

Bottom Line

China is publicly urging cooperation and market discipline while privately holding the most powerful lever in the system. As EU–U.S. coordination accelerates, Beijing is signaling it intends to contest the mechanics of diversification without triggering an immediate confrontation.

Time, however, is not neutral—and the grace period is almost over.

Disclaimer: This news item originates from reporting by Sina Finance, a media outlet in China owned by New Wave Holdings Limited (controlled by Charles Chao (Cao Guowei)). The information and official statements cited should be independently verified and interpreted within the broader context of trade, export-control, and diplomatic developments.

• Italy has been shortlisted to host one of Europe's first two strategic storage hubs for critical raw materials, positioning northern Italy at the center of the EU's emerging resilience strategy.
• The initiative represents Europe's pragmatic pivot toward strategic stockpiling as a faster, cheaper alternative to domestic mining amid long permitting timelines and public resistance.
• Italy is pushing recycling and circular economy approaches as complementary solutions, though stockpiles serve mainly to buy Europe time rather than break China's material dominance.

Italy has been shortlisted to host one of Europe’s first two strategic storage hubs for critical raw materials, a move that reflects how quickly minerals security has shifted from industrial policy to national security.

Much like America,  Europe wants to stockpile key minerals and rare earths so factories don’t shut down during wars, trade disputes, or supply shocks—and Italy may become one of the continent’s main vaults.

The announcement amplified by decode39 (opens in a new tab) made by Industry Minister Adolfo Urso (opens in a new tab), places northern Italy—close to major logistics corridors—at the center of Europe’s emerging resilience strategy.

Stockpiles Before Shovels: Europe’s Pragmatic Turn

Urso framed the initiative bluntly: Europe is increasingly surrounded by conflict, and strategic autonomy is no longer optional. In that context, stockpiling critical raw materials and rare earths becomes a defense tool, not a green talking point.

Adolfo Urso, Industry Minister

This is a realistic pivot. Europe faces long permitting timelines, public resistance to mining, and limited domestic ore quality. Warehousing materials already produced elsewhere is faster, cheaper, and politically feasible.

That logic mirrors moves in Washington, where the U.S. has just launched Project Vault, a $12 billion effort to buffer supply chains against geopolitical shocks.

Recycling Over Mining: The Italian Angle

Between the lines, Italy is pushing a second message: recycling beats mining on speed. Urso argued that building a recycling and circular-economy ecosystem—especially retaining ferrous scrap within the EU—can support steelmakers transitioning to electric arc furnaces and accelerate decarbonization. This is directionally sound. Secondary supply can come online years before a new mine.

However, recycling does not replace the primary supply for rare earths. It supplements it. Europe still imports the bulk of refined material.

What’s Solid—and What’s Still Soft

Grounded reality:

• Strategic stockpiling reduces short-term vulnerability.
• Northern Italy is logistically credible.
• Recycling scales faster than mining in Europe.

Still unresolved:

• Which materials, volumes, and specifications will be stored?
• How stockpiles interact with EU export controls and market pricing.
• Whether storage becomes a bridge or a crutch, delaying upstream investment.

REEx Takeaway

Italy’s bid is less about geology and more about governance, logistics, and timing. Europe is choosing the fastest lever available to buy resilience in a fractured world.

Stockpiles won’t break China’s dominance. But they can buy Europe something just as valuable: time.

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

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

Marco Rubio, U.S. Secretary of State

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

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

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

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

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

Allies Signal Alignment—Japan Sets the Tone

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

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

Project Vault and the “Finance + Diplomacy” Flywheel

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

Big Ambition, Real Execution Questions

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

Industry Applause: ReElement Technologies Backs the Direction

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

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

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

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

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

REEx Takeaway

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

Rare Earth Exchanges remains objective and cautiously optimistic.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The investor takeaway

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

• India's 2026/27 budget allocates:
  • $133 billion for infrastructure
  • $85 billion for defense
• The budget represents:
  • 9% increase in infrastructure spending
  • 15% increase in defense spending
• Explicit support for:
  • Rare earth mining and processing
  • Data centers
  • AI development
• The budget surge follows a deadly India-Pakistan clash in May 2025 that highlighted the importance of mineral-intensive modern warfare.
• Prime Minister Modi positions the budget as a pathway to self-reliance and a top-three global economy.
• Challenges include:
  • Long timelines to build separation plants
  • Magnet production capacity
• Execution at the processing stage is critical to achieving strategic autonomy.

India’s 2026/27 national budget marks a decisive escalation in hard-asset spending, with implications that reach well beyond railways and fighter jets into critical minerals and rare earth supply chains. According to an AFP report cited by Reference News Network (Feb. 3), Finance Minister Nirmala Sitharaman announced $133 billion for infrastructure and $85 billion for defense, representing roughly 9% and 15% increases year over year—among the largest expansions in India’s fiscal history.

What matters for Rare Earth Exchanges™ readers is not just the headline numbers, but the explicit linkage: the budget commits government support to data centers, artificial intelligence, and rare earth mining and processing. This signals recognition that modern defense platforms—drones, missiles, submarines, fighter aircraft—are inseparable from secure supplies of magnets, power electronics, and specialty alloys.

The timing is not accidental. Defense spending surged after a deadly India–Pakistan clash last May that featured drones, missiles, and artillery, underscoring how mineral-intensive modern warfare has become. Defense Minister Rajnath Singh called the spending “unprecedented,” while Prime Minister Narendra Modi framed the budget as a roadmap toward self-reliance and a top-three global economy.

A solid reality-- the funding increase is real, and India is openly aligning infrastructure, defense, AI, and rare earth processing into one industrial strategy.

What remains speculative: budgets do not equal capacity. India still faces long timelines for building separation plants, qualifying magnet production, and reducing dependence on foreign midstream supply.

REEx takeaway: India is putting serious money behind strategic autonomy—but in rare earths, execution at the processing stage will determine whether this becomes independence or just ambition.

Source: AFP via Reference News Network, Feb. 3, 2026

• China unveiled a speculative near-space aircraft carrier concept under the Nantianmen Project.
• Experts dismiss this concept as technologically implausible propaganda aimed at domestic audiences and regional signaling.
• The real strategic threat is China's monopoly control over:
  • Rare earth separation
  • Neodymium-iron-boron magnets
  • Critical minerals that power hypersonic weapons, autonomous systems, and advanced aerospace platforms
• Investors should focus on China's materials chokehold, which is a significant factor in military capability.
• There is an urgency for accelerated development of supply chains outside of China.

In one breath: China’s state media unveiled a concept for a gigantic near-space “flying aircraft carrier” that could launch unmanned fighters and hypersonic missiles. Experts call it technologically implausible and likely propaganda. But beneath the spectacle lies a serious message for investors: China is advertising downstream military ambition built atop upstream control of rare earths, magnets, and critical minerals (and the relentless research and development)—the quiet backbone of advanced aerospace and defense systems.

A Star Wars Sketch With Strategic Subtext

The concept vehicle—dubbed _Luanniao_—is described as a massive, triangular near-space platform capable of deploying dozens of unmanned fighters. It appears under China’s broader Nantianmen Project, led by the Aviation Industry Corporation of China (opens in a new tab). The announced timeline—20 to 30 years—places it firmly in speculative territory. Independent defense analysts note the absence of workable propulsion, fuel economics, and survivability at the edge of the atmosphere. On the surface, this is theater.

Yet theater can still move markets—and signal intent suggests Rare Earth Exchanges.™

Where the Physics Break (and Why That Matters)

Credible experts areright to be skeptical. Sustained hover near the Kármán line woulddemand propulsion systems that do not exist. Orbital alternatives introduce collision risks and reliance on reusable rockets China has not yet fielded at scale—unlike SpaceX. These are not minor gaps; they are foundational constraints. The article’s technical doubts are well-grounded.

The Quiet Truth Beneath the Noise

What is accurate—and strategically important—is China’s relentless integration across the defense value chain. Hypersonic weapons, stealth platforms, and autonomous systems are magnet- and materials-intensive. They rely on neodymium-iron-boron magnets, dysprosium, and terbium for high-temperature performance, advanced alloys, and precision manufacturing. China’s dominance in rare earth separation, magnet making, and downstream components is real, current, and bankable.

This is the story mainstream coverage often misses: flashy concepts are powered by boringmonopolies.

Narrative Management, Not Misinformation—With a Purpose

The presentation leans nationalist and inspirational, aimed at domestic audiences and regional signaling. It is not outright misinformation so much as narrative compression—collapsing decades of uncertain R&D into a single cinematic reveal. Investors should discount the platform—and focus on the platform beneath the platform: China’s materials chokehold.

Why This Matters for the Rare Earth Supply Chain

China is advertising future military dominance while already controlling today’s inputs. That asymmetry is both the risk and the opportunity for accelerated ex-China supply chains.

Profile

The Aviation Industry Corporation of China (AVIC) (opens in a new tab), headquartered in Beijing, is a massive state-owned aerospace and defense conglomerate founded in 2008 from the merger of previous aviation entities. As China's primary manufacturer of military and civil aircraft, UAVs, and helicopters, AVIC operates over 100 subsidiaries, employs over 400,000 personnel, and ranks in the Fortune Global 500.

Citation: Allegra Mendelson, The Telegraph, 3 Feb 2026.

• Volta Metals' drill results from the Springer project in Ontario show 116.8 meters of continuous high-grade gallium mineralization at 77 g/t Ga₂O₃, exceeding industry benchmarks and suggesting potential as North America's most significant primary gallium deposit.
• Gallium is a critical mineral essential for semiconductors, defense systems, and power electronics, with the global market projected to grow from $2.5 billion in 2024 to $21.5 billion by 2034 amid China's current supply dominance.
• The discovery has significant geopolitical implications for U.S. and allied supply-chain resilience, offering a credible North American gallium source at a time when China has demonstrated willingness to weaponize critical mineral exports.

New drill results from Volta Metals Ltd.’s (opens in a new tab) Springer rare earth–gallium project near Sudbury, Ontario, point to thick, continuous, and unusually high-grade gallium mineralization. If confirmed through further drilling and metallurgy, the project could emerge as North America’s most significant primary gallium-bearing deposit, with clear implications for U.S. and allied critical-minerals strategy.

According to Mining.com (opens in a new tab), Volta announced initial assay results from drill hole SL25-23, which intersected 116.8 meters of continuous mineralization grading 0.0077% Ga₂O₃ (77 grams per tonne). Multiple intervals exceed 100 g/t Ga₂O₃, placing them firmly in the “high-grade” category by industry standards. Mineralization begins at 58 meters depth and extends to at least 175.8 meters, with assays pending down to 372 meters, suggesting further upside.

For context, gallium is rarely mined from primary deposits; it is typically recovered as a byproduct of aluminum or zinc refining, making supply highly concentrated and opaque. Industry benchmarks define high-grade gallium mineralization as Ga₂O₃ > 0.006%—a threshold exceeded by the Springer intercepts. The reported grades and thickness, therefore, stand out not just regionally but globally.

Volta’s CEO Kerem Usenmez called the results evidence that Springer is “one of the fastest-advancing and most strategically valuable critical-mineral projects in North America,” noting that large-scale, continuous high-grade gallium mineralization is rare on the continent. The data also suggest the presence of multiple critical minerals, with gallium hosted alongside light and heavy rare earth elements.

Why this matters for the U.S. and its allies: Gallium is designated a critical mineral by Canada, the U.S., the EU, and Australia, essential for semiconductors, RF chips, power electronics, defense systems, and advanced photovoltaics. The global gallium market is projected to expand from $2.5 billion in 2024 to $21.5 billion by 2034, while China currently dominates both production and processing. A credible North American source—especially one capable of producing gallium as a primary or co-product—would directly support Western supply-chain resilience efforts.

Volta says ongoing beneficiation and metallurgical tests indicate Springer could ultimately produce gallium byproducts alongside rare earths, though no economic studies or timelines have yet been disclosed. Still, at a moment when China has demonstrated its willingness to weaponize gallium exports, these results elevate Springer from an exploration story to a geopolitically relevant asset.

• China Northern Rare Earth's Huamei subsidiary is expanding samarium-europium-gadolinium separation capacity and piloting high-purity samarium products.
• Huamei is moving beyond commodity outputs toward specialized, defense-relevant materials.
• The company implemented closed-loop production accountability and lifecycle equipment management to achieve stable January output.
• Huamei is targeting consistent capacity release across all production lines.
• Strategic investments are being made in rare earth fluoride technology readiness, waste-heat recovery, and continuous process improvements.
• These actions signal China's push to industrialize specialized refining capabilities and tighten supply-chain control.

A smelting subsidiary of China Northern Rare Earth Group—identified as the Smelting Division (Huamei Company)—says it began the year with stable output and higher operating efficiency, framing January as a “start strong, sprint early” moment. The company claims it is balancing safety, quality, and throughput to lock in production stability as the base for meeting full-year targets.

Operational Discipline as Competitive Strategy

The business-relevant updates are operational—and potentially strategic. Management highlights tighter safety and reliability controls (risk-prevention systems, special hazard inspections, and full lifecycle equipment management) alongside a “closed-loop” production accountability model that assigns responsibility down to specific people. The aim is straightforward: fewer disruptions, tighter execution, and more consistent capacity release across both legacy and newer production lines.

Moving Up the Rare Earth Value Chain

Two items stand out for Western and U.S. readers because they point to movement up the value chain. First, the company says it is boosting separation capacity for a samarium–europium–gadolinium (Sm–Eu–Gd) enriched concentrate—explicitly described as addressing a weakness in its product mix.

Why Samarium Matters

That matters because Sm and related materials feed higher-performance magnet and specialty applications (including segments of defense and high-temperature systems), where supply resilience and processing know-how are strategically sensitive.

Higher-Purity Products, Broader Technical Optionality

Second, it reports progress on pilot production of high-purity samarium carbonate and samarium oxide, while also “reserving” (i.e., building technical readiness for) rare earth fluoride technology—another step toward higher-end, more specialized products rather than commodity outputs.

Efficiency, Energy, and Continuous Improvement

On the efficiency side, the unit also cites early work on waste-heat recovery and energy-saving optimization, plus a series of “small innovations” driven by an in-house master technician studio—suggesting a continuous-improvement culture aimed at lowering costs and tightening process control.

What This Signals for the West

No single “breakthrough” is detailed in technical terms, but the combination—greater Sm–Eu–Gd separation capacity, high-purity samarium product pilots, and process/energy optimization—signals China’s ongoing push to industrialize specialized rare earth capabilities. For U.S. and European supply-chain planners, this is another incremental indicator that Chinese incumbents are expanding not just volume, but refining depth and product sophistication.

Disclaimer: This item is translated from reporting by media affiliated with a Chinese state-owned entity. The information has not been independently verified and should be confirmed through independent sources before being used for investment, procurement, or policy decisions.

• Ministers from the US, EU, UK, Japan, Australia, and nearly 20 allied nations convene in Washington to discuss a critical minerals alliance, addressing China's dominance in rare earth mining, refining, and permanent magnet manufacturing as a national security liability.
• Australia establishes a A$1.2 billion strategic critical minerals reserve while uncertainty persists over US price guarantees, with investors demanding pricing certainty to scale non-China refining capacity.
• The summit marks an emerging acceptance of a security premium for rare earth refining, requiring coordinated industrial policy across mining, refining, magnets, finance, and defense procurement at a scale not seen since WWII-era mobilization.

Ministers from the US, EU, UK, Japan, Australia, and nearly 20 allied nations will convene in Washington this week to discuss a critical minerals alliance, with rare earths and permanent magnets at the center. The meeting reflects a growing consensus: dependence on China for mining, refining, and magnet manufacturing is now a national-security liability—not a trade inconvenience

This moment did not arrive suddenly. Rare Earth Exchanges™ has argued since its launch in late 2024 that only a coordinated, multinational industrial alliance—not fragmented national strategies—could realistically rebalance rare earth supply chains. This week’s summit suggests policymakers are finally converging on that conclusion.

So now such topics have gone mainstream, as cited (opens in a new tab) today by The Guardian’s Lisa O’Carroll.

Yes, the Risk Is Real—and Quantified

The Guardian’s core facts hold: Europe consumes roughly 20,000 tonnes of permanent magnets annually, sourcing 17,000–18,000 tonnes from China. Domestic EU production is marginal. Similar vulnerabilities exist across the US and allied economies, as the Rare Earth Exchanges community well knows.  China’s repeated willingness to impose export controls—on rare earths, gallium, antimony, and related materials—has transformed abstract risk into lived experience.

This is not speculative framing. It is the empirical baseline, at this point, pragmatic survival driving alliance talks.

Australia Moves First—Others Watch

Australia’s decision to establish a A$1.2 billion strategic critical minerals reserve is among the most concrete policy actions cited. This mirrors Japan’s long-standing stockpiling model and signals a shift from market faith to resilience planning. Importantly, Canberra is acting even as uncertainty persists around US price guarantees—suggesting that allies are no longer waiting for Washington to lead every lever.  The Trump administration, to its credit, has done more than any other administration on critical minerals and the rare-earth element supply chain. But more is needed.

The Price Floor Question: Where Policy Meets Physics

One unresolved fault line is whether the US will guarantee minimum prices for critical minerals and rare earths. Reports via Reuters that Washington may have stepped back triggered equity sell-offs—an investor verdict that price certainty matters. Without it, capital hesitates; without capital, refineries and magnet plants do not get built.

The Guardian accurately frames this as a debate. What deserves sharper emphasis is consequence: pricing mechanisms are not optional if non-China refining—especially heavy rare earth separation—is to scale.

Where Optimism Outruns Engineering

The article leans into alliance symbolism and diplomatic repair. What remains absent are specifics: volumes, timelines, binding commitments, and industrial coordination mechanism targets. “De-risking” is invoked frequently, but chemistry, permitting, and workforce realities do not bend to communiqués.

Why This Moment Still Matters

What is truly notable is the emerging acceptance of a security premium for rare earth refining—an _idea Rare Earth Exchanges_™ has consistently advanced. Delivering this alliance will require synergies across mining, refining, magnets, finance, and defense procurement—an industrial policy effort not seen at this scale since perhaps World War II–era mobilization.

Whether this summit marks a turning point—or another missed opportunity—will depend on execution.

Source: The Guardian, Lisa O’Carroll, February 1, 2026.

• A 2026 Griffith Asia Institute study reveals:
  • China's dominance stems from controlling 90% of rare earth refining and 94% of magnet production—not just mining.
  • This dominance is a deliberate, decades-long strategy reinforced by extraterritorial export controls.
• Western supply chain diversification efforts focused solely on new mines will fail without:
  • Parallel investment in separation, refining, and magnet manufacturing.
  • Addressing true chokepoints where China holds decisive power.
• Effective U.S. response requires:
  • Allied coordination and systematic support across the entire processing value chain.
  • Permitting reform and workforce development.
  • Recognition that America's fragmented governance may only enable such changes under severe crisis conditions.

A new 2026 policy study led by Christoph Nedopil of Griffith Asia Institute (opens in a new tab), with co-authors Jean Dong University of Melbourne; Harvard Kennedy School and Hui Feng, Griffith University, concludes that China’s dominance in rare earth element (REE) processing is not accidental, temporary, or easily reversible—but the product of a long-running, coordinated national strategy that continues to strengthen despite Western trade pressure. The paper, China: Staying the Course (opens in a new tab), finds that while China mines roughly 70% of global rare earths, its true leverage lies downstream: about 90% of global refining and ~94% of permanent magnet production, giving Beijing decisive influence over materials essential to electric vehicles, wind turbines, semiconductors, and defense systems.

Study Methods and Scope

The authors conducted a qualitative policy and economic analysis spanning 2024–2025, drawing on trade data, industrial capacity metrics, export-control announcements, and China’s industrial planning documents, including the 15th Five-Year Plan. The study situates rare earths within a broader assessment of China’s regional diplomacy, technology policy, green transition, and currency strategy, emphasizing supply-chain control as a tool of statecraft.

Key Findings: Processing Is the Power

The study’s central finding is stark: control of processing—notmining—defines modern resource power. China has builtvertically integrated REE value chains, reinforced by export controls that extend extraterritorially, requiring licenses for products containing even trace amounts of Chinese-origin rare earths or Chinese processing technology. In 2025, these controls created immediate disruption risks for U.S., Japanese, and European manufacturers—demonstrating that downstream chokepoints can de-escalate trade conflict as effectively as tariffs.

Implications for Markets and Policy

For industry and investors, the implications are profound. Efforts to diversify supply that focus only on new mines—without parallel investment in separation, refining, and magnet-making—are unlikely to reduce dependence. For governments, the study suggests that China is shifting from rule-taker to rule-shaper in critical minerals, using processing dominance to shape trade outcomes. For clean energy and defense supply chains, China’s position makes it simultaneously indispensable and strategically assertive.

Limitations and Contested Issues

The study is a policy brief, not a quantitative market forecast. It does not model alternative supply scenarios or fully assess the pace at which non-Chinese processing could scale if capital, permitting, and technology barriers were addressed. Critics may also argue that export controls risk accelerating long-term diversification—though the authors suggest China’s lead remains measured in decades, not years.

REEx Reflections

Rare Earth Exchanges™ has consistently argued that effective U.S. industrial policy for rare earths must be allied, integrated, and boringly systematic—the opposite of episodic crisis response. That means tight Five Eyes–North America, European–Japan alignment, common standards and uniform pricing signals to de-risk investment, direct support not just for mining but for refining, separation, alloying, and custom magnet manufacturing, and a serious workforce strategy spanning metallurgists, chemical engineers, tool-and-die specialists, and magnet technicians. It also means matrix planning of inputs—reagents, solvents, acids, metals, energy, water—because rare earths fail not at the mine but at the chemistry bench.

On permitting, REEx has pushed for rationalization: fewer agencies, clearer lead authority, parallel reviews, and fixed timelines—without abandoning environmental standards. By contrast, Trump’s approach has emphasized tariffs, executive pressure, episodic funding with some direct equity in companies via emergency declarations, and rhetorical urgency—useful for signaling resolve, but weak on institutional build-out and allied coordination.

The delta is structural: REEx advocates durable systems (but a profound, even radical change from where we are at today); Washington defaults to transactional fixes, some industrial policy, and theatre.

Plus, the deeper problem is cultural and legal—America’s fragmented governance, litigation risk, and budget cycles, and highly polarized body politic make sustained industrial policy politically hard unless a severe, visible crisis forces alignment. And it will have to be significantly more severe than the situation today.  History suggests the system changes only under duress; until then, incrementalism prevails—even when the strategic math is already clear.

Conclusion

The authors’ message is clear: the rare earth challenge is not about geology—it is about industrial depth and policy consistency. Until competing economies build comparable downstream capacity, China’s grip on rare earth processing—and the leverage that comes with it—will remain a defining feature of the global materials economy. And unfortunately, conditions will likely need to markedly worsen before the necessary policy framework is ready for acceptance.

Citation: Nedopil, C., Dong, J., & Feng, H. (2026). China: Staying the course. Griffith Asia Pacific Strategic Outlook. DOI: 10.25904/1912/5890.

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

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

From Referee to Player-in-Chief

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

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

Bilateralism With a Strategic Accent

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

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

Pax Silica: Alliance or Architecture of Control?

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

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

What the Diagram Shows—and What It Cannot

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

Why This Matters Now

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

Profile

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

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

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

• U.S. Under Secretary Jacob Helberg announced a strategic push for allied nations to coordinate on rare earth pricing mechanisms to stabilize non-Chinese extraction and refining against China's market dominance and price volatility.
• While price coordination addresses boom-bust cycles that have repeatedly killed Western projects, experts argue it's insufficient without a comprehensive industrial policy spanning subsidies, workforce development, downstream R&D, and allied orchestration.
• Helberg's background in U.S.-China economic competition, technology policy, and national security positions him uniquely to drive this shift from treating rare earths as ordinary commodities to strategic assets requiring coordinated intervention.

In a revealing interview with Bloomberg, U.S. Under Secretary of State for Economic Affairs Jacob Helberg (opens in a new tab) outlined a new strategic push by Washington to coordinate with allies on a rare earth pricing mechanism—an effort aimed at stabilizing non-Chinese rare earth extraction and refining in the face of China’s entrenched dominance. Speaking ahead of a high-level meeting of foreign ministers in Washington, Helberg described growing “momentum and excitement” around coordinated pricing as a way to shield producers from extreme volatility that has repeatedly undermined Western investment and reinforced China’s near-monopoly over rare earth element (REE) processing.

What This Is—and What It Is Not

This development is not an academic study but a policy signal grounded in decades of market evidence. It reflects accumulated lessons from failed Western projects, repeated price collapses, and China’s strategic use of market power. The proposal—still undefined—centers on coordinating price floors, reference prices, or stabilization tools among allied nations to make rare earth mining and, critically, refining economically viable outside China.

The underlying hypothesis is simple: China’s dominance has been sustained as much by price volatility as by technical capacity. When prices crash, Western projects fail. When they recover, China’s integrated system captures value. Price coordination seeks to break that cycle. While U.S. and Western firms’ fate lies in the balance.

How Policymakers Reached This Point

The “methodology” behind this shift is cumulative and empirical:

• Historical price data showing repeated boom-bust cycles in rare earth oxides.
• Case studies of stalled or abandoned non-Chinese refining ventures following price collapses.
• Supply-chain mapping demonstrates that even when mining occurs outside China, separation and refining often remain Chinese-controlled.
• Geopolitical stress tests, including export controls, informal quotas, and strategic signaling by state-aligned Chinese firms.

Helberg’s remarks indicate that U.S. officials increasingly see price instability itself—not geology—as the central bottleneck to diversification.

Jacob Helberg, 22nd Under Secretary of State for Economic Affairs

Why Price Volatility Matters

Rare earth markets do not behave like competitive commodity markets. China’s position allows it to:

• Flood markets during Western project development, depressing prices.
• Sustained losses longer than private competitors due to state backing of key enterprises.
• Reassert pricing power once competitors exit.

A coordinated pricing mechanism could smooth revenue expectations, making long-cycle investments in refining and separation rational rather than speculative.

But A Bigger Reality: Pricing Alone Is Not Enough

Rare Earth Exchanges™, since our launch in late 2024, has consistently argued that price alignment is necessary—but far from sufficient—to catch China. China’s advantage is systemic. It spans mining, separation and refining, metallurgy, magnet manufacturing, end-use integration, and workforce depth. Without a broader industrial policy, price coordination risks becoming a partial fix to a structural problem.

A credible allied strategy would also require:

Industrial policy remains controversial in market-oriented societies. But the rare earth sector is no longer a theoretical market—it is strategic infrastructure, akin to semiconductors or defense systems.

Implications and Risks

If implemented as part of a broader strategy, allied price coordination could revive stalled projects across the U.S., Australia, Canada, and Europe, and reduce dependence on China over time.

But risks remain:

• Market distortion concerns and potential misallocation of capital.
• Execution complexity across dozens of allied governments.
• Trade retaliation, including further Chinese export controls.
• Legal scrutiny under international trade rules, depending on the design.

A Necessary Pivot, Not a Silver Bullet

Helberg’s remarks mark a meaningful shift in Western thinking: rare earths are no longer treated as ordinary commodities but as strategic assets requiring coordinated intervention. Price stability is a critical first step. Yet without a comprehensive industrial policy—spanning talent, technology, inputs, and allied coordination—it will not be enough to dislodge China’s systemic advantage. The challenge now is a change in the Western mindset, the vision, execution, alignment, and political will.

Why Jacob Helberg’s Background Matters for Rare Earth Strategy

Jacob Helberg brings an unusually relevant blend of national security, technology policy, and China-focused economic strategy to his role as U.S. Under Secretary of State for Economic Affairs—making his views on rare earth pricing and allied coordination especially consequential. Before his current post, he advised the White House Council of Economic Advisers and served as a Commissioner on the U.S.–China Economic and Security Review Commission (2022–2024), where he pushed for tariffs, industrial independence, and reduced strategic reliance on China, placing him squarely at the intersection of economic policy and national security that defines the rare earth challenge today. He also founded the Hill & Valley Forum, which bridges Silicon Valley and Capitol Hill—an experience directly relevant to rare earths, which require tight coordination among technology firms, lawmakers, and defense stakeholders. Earlier roles as senior advisor to the CEO of Palantir Technologies and as global lead for Search policy at Google gave him firsthand exposure to how strategic technologies scale—or fail—under regulatory and geopolitical constraints. Consistent with this trajectory, his 2021 book The Wires of War (opens in a new tab) frames competition with China as systemic rather than transactional, arguing that technological dominance drives global power—an outlook that aligns closely with rare earths, where China’s advantage stems less from geology than from long-term industrial planning, workforce development, and coordinated state action, making Helberg’s push for allied price coordination a logical extension of his broader work on U.S.–China economic competition.

Source: Eastland, M., Bloomberg News, January 29, 2026.

• Concordia University review reveals China controls approximately 90% of rare earth refining capacity.
• This creates processing bottlenecks that mining diversification alone cannot solve.
• Even Western-mined rare earths flow to China for purification.
• This situation exposes dual-use supply chains spanning electric vehicles (EVs), wind turbines, F-35 fighters, and defense systems.
• The study concludes that strategic autonomy requires commercial-scale separation and magnet manufacturing capacity, not just new mines.
• Recycling of rare earths remains under 5% globally.

A comprehensive new review (opens in a new tab) led by Karim Zaghib of Concordia University, with colleagues Ningaraju G. Ningappa, Karthik Vishweswariah, Anil Kumar M.R., Jeremy I.G. Dawkins, and Thiago M. Guimaraes Selva, delivers a sobering conclusion for policymakers and investors alike: diversifying rare earth mining alone will not reduce supply-chain risk. Published in Energy Storage Materials (2026), the review maps the entire rare earth metals (REM) value chain and finds that China’s near-total dominance of processing, separation, and magnet-grade refining—not geology—remains the decisive source of leverage over dual-use technologies spanning clean energy and defense.

Study Methods

This is a wide-ranging, evidence-dense review that synthesizes global data on resources, production, beneficiation, leaching, separation, recycling, market dynamics, and policy responses. The authors integrate mining statistics, process engineering literature, life-cycle assessments, and application case studies (EVs, wind turbines, aerospace, missiles, and electronics) to trace where value and vulnerability actually concentrate. The analysis explicitly contrasts upstream resource abundance with downstream technical bottlenecks.

Key Findings: why processing matters as much, if not more than mines.

The paper documents that rare earths are geochemically abundant but economically constrained by difficult separation chemistry and scale-dependent refining. China accounts for ~70% of mining and ~90% of global refining capacity, including solvent extraction circuits and magnet manufacturing. Even where mining exists elsewhere (U.S., Australia, Brazil, Africa), intermediates often still flow to China for final purification, leaving importers exposed. China also maintains excess processing capacity and can modulate exports—especially of heavy rare earths (Dy, Tb)—to preserve leverage.

Dual-use Consequences

Because the same materials underpin EV motors, wind turbines, grid electronics, and advanced weapons, the authors frame rare earths as a dual-use strategic input. The review notes that a single F-35 fighter contains hundreds of kilograms of REMs; NdFeB and SmCo magnets are irreplaceable in high-temperature motors and actuators; and phosphors, catalysts, and alloys span both civilian and military platforms. Processing chokepoints, therefore, translates directly into national-security exposure.

What could reduce dependence?

The authors outline pathways that could theoretically rebalance the system: green metallurgy (ionic liquids, deep eutectic solvents), AI-assisted separation, digital traceability, and—most promising—closed-loop recycling. Yet they emphasize today’s reality: <5% of rare earths are recycled globally, and most advanced separation technologies remain at pilot scale. Without a large, capital-intensive midstream build-out outside China, diversification efforts stall.

Implications for the U.S. and allies.

The review reinforces a core Rare Earth Exchanges™ thesis: mines without midstream are a false solution. President Trump recently acknowledged this in a speech. Policy incentives (Trump 2.0 DoD offtakes, CHIPS-adjacent funding, EU Critical Raw Materials Act) help, but permitting timelines, environmental constraints, skills shortages, and high costs continue to slow Western separation and magnet capacity. Strategic autonomy requires credible, commercial-scale separation, alloying, and magnet manufacturing, not just ore.

Limitations and Controversy

As a review, the paper does not present new experimental breakthroughs, and some forward-looking claims (AI-enabled separation, rapid recycling scale-up) remain aspirational. Environmental trade-offs are acknowledged but not quantified uniformly across regions. Still, the central conclusion—that processing concentration is the real risk—is well supported by data and aligns with observed trade behavior.

Bottom Line

The study’s key insight is stark: diversifying mining alone does not reduce risk. Import-dependent regions will remain exposed unless they build resilient processing capacity. For investors and policymakers, the signal is clear—the battle for rare earth security is won or lost in the midstream.

Citation: Ningappa N.G. et al., Energy Storage Materials 84 (2026) 104799. DOI: 10.1016/j.ensm.2025.104799.

• China's rare earth industry positions magnesium-rare earth (Mg-RE) alloys as strategically critical advanced materials for aerospace, defense, and high-performance manufacturing, showcasing the country's leadership across the full value chain from R&D to industrial deployment.
• Rare earth elements transform magnesium's limitations by refining grain structure, creating nanoscale precipitates, and improving high-temperature strength, creep resistance, and corrosion performance while maintaining magnesium's ultra-low density advantage.
• For Western defense and aerospace sectors, China's integration of rare earth chemistry into structural materials—not just magnets—highlights growing supply chain vulnerabilities and potential performance gaps in lightweighting and thermal resilience applications.

China’s rare earth industry bodies are spotlighting magnesium–rare earth (Mg-RE) alloys as a strategically important class of advanced materials, underscoring their growing role in aerospace, defense, and high-performance manufacturing.

Magnesium–rare earth alloys are defined as materials in which magnesium serves as the base metal, with rare earth elements added as primary or trace alloying components. These alloys are valued for their high temperature strength and thermal stability, while retaining magnesium’s hallmark advantage: extremely low density.

As the lightest structural metal used in engineering, magnesium alloys offer high specific strength, good biocompatibility, and electromagnetic shielding properties—making them attractive for aerospace, defense systems, electronics, and potential biomedical applications. Historically, however, their widespread use has been constrained by poor room-temperature ductility, limited absolute strength, weak high-temperature performance, and poor creep resistance.

Several days ago, an article in the China Rare Earth Industry Association explained how rare earth elements address these limitations through multiple metallurgical mechanisms. Rare earth additions purify molten magnesium by binding oxygen and sulfur impurities and form dense oxide films that prevent oxidation and combustion—longstanding industrial safety challenges.

At the microstructural level, rare earth atoms refine grain structure, strengthen the alloy through solid-solution effects, improve ductility by enabling additional slip systems, and create dense nanoscale precipitates during heat treatment that block dislocation movement. Together, these effects significantly enhance strength, plasticity, high-temperature stability, creep resistance, and corrosion performance.

Chinese researchers report that China has made major advances across the full value chain—from basic science and alloy design to processing, industrial-scale production, and application. The country now positions itself as a global leader in magnesium–rare earth alloy R&D and deployment, directly supporting rapid progress in China’s aerospace and defense sectors.

Why This Matters for the U.S. and the West

For Western defense, aerospace, and advanced manufacturing firms, this article signals more than materials science progress—it highlights China’s deep integration of rare earth chemistry into next-generation structural materials, not just magnets.

Magnesium–rare earth alloys sit at the intersection of lightweighting, thermal resilience, and defense relevance, areas where supply chain dependence already concerns U.S. policymakers. The implicit message: rare earth dominance increasingly  translates into performance advantages, not merely cost control.

Disclaimer: This news item originates from Chinese state-affiliated media and industry organizations. The information presented should be independently verified through non-Chinese or peer-reviewed sources before being relied upon for investment, policy, or procurement decisions.

• ReElement Technologies achieved a breakthrough by producing >99.9% pure samarium from recycled feedstock, a critical capability for defense-grade SmCo magnets that remains scarce outside China.
• The company secured $200 million in strategic equity funding from Transition Equity Partners and launched the world's first utility token for critical minerals traceability with SAGINT.
• ReElement's Marion, Indiana Supersite advances U.S. midstream refining capacity while Electrified Materials Corporation began shipping end-of-life lithium-ion batteries for circular supply chains.

Noblesville, Indiana-based ReElement Technologies (opens in a new tab) opened 2026 with a series of operational and strategic milestones that underscore its growing role in rebuilding domestic and allied refining capacity for rare earths and critical minerals, according to a January update from CEO Mark Jensen (opens in a new tab).

Rare Earth Refining in America’s Midwest

Most notably, ReElement achieved a refining breakthrough by producing >99.9% pure samarium from customer-provided recycled feedstock—a critical step toward reliable SmCo magnet-grade materials used in defense and advanced industrial applications where high heat tolerance is essential. Samarium refining at this purity level remains scarce outside China, making the result commercially and strategically significant.

The company also announced a traceability milestone with SAGINT, minting what itdescribes as the world’s first utility token for criticalminerals, starting with neodymium oxide. The system is designed to enable tamper-resistant provenance, auditability, and DFARS-ready compliance, directly addressing one of the U.S. defense supply chain’s most persistent blind spots. Jensen informed Rare Earth Exchanges™ in a critique of one of our more critical articles that this token is of vital importance for defense-related customers.

Note on the topic of no U.S. price floors, Jensen went on the record online that none are needed for competitors such as ReElement.

On the capital front, ReElement secured a $200 million strategic equity facility from Transition Equity Partners to accelerate commercial deployment, anchored by its Marion, Indiana, Supersite. The funding materially strengthens the company’s ability to scale its multi-mineral, multi-feedstock refining platform at a time when U.S. policymakers are prioritizing onshore processing capacity.

 ReElement’s momentum was reinforced by a high-level site visit from Indiana Governor Mike Braun (opens in a new tab) and Secretary of Commerce David J. Adams (opens in a new tab), signaling growing state-level alignment with federal critical mineral and defense supply chain objectives.

Finally, through affiliate Electrified Materials Corporation (opens in a new tab), the company commenced shipments of end-of-life lithium-ion batteries, advancing a circular, U.S.-based battery materials supply chain.

ReElement executives will engage global partners and media at Mining Indaba (Feb. 9–12, Cape Town).

Rare EarthExchanges has reported that ReElement Technologies represents one of the key emerging mine-to-magnet supply chains in the USA. In this company’s case, they focus on the midstream—recycling and refining—the true bottleneck in the West.

• Australian rare earth equities, including Lynas and Iluka, fell by double digits after unconfirmed reports suggested the U.S. may abandon its proposed NdPr price floor near $110/kg, though no formal policy rescission has occurred.
• The sell-off reveals markets are conflating price signals with value creation—price floors alone don't resolve rare earth supply chain bottlenecks without critical midstream infrastructure for separation, metal making, and magnet manufacturing.
• Popular rare earth ETFs include Chinese companies, causing indiscriminate capital rotation during volatility and punishing Western miners while China's vertically integrated system remains insulated from policy speculation.

A sharp sell-off in Australian rare earth equities this week reveals less about geology—and more about how fragile sentiment becomes when supply chains hinge on policy interpretation. Shares of Lynas Rare Earths and Iluka Resources fell by double digits following unconfirmed reports that the U.S. government may retreat from a proposed price floor for neodymium–praseodymium (NdPr). Markets reacted fast. Fundamentals did not.

The Signal Beneath the Noise

The reporting is directionally correct: the U.S. Department of Defense outlined a preliminary NdPr price floor near $110/kg in mid-2025, catalyzing a sharp NdPr price rally and a surge in upstream equities. NdPr matters because it anchors the permanent magnet economy. A credible floor would meaningfully de-risk upstream projects long impaired by price volatility.

What’s missing is context. No formal rescission has occurred. More plausibly, as REEx noted yesterday, this looks like a policy adjustment to legal, budgetary, and procurement realities—not an ideological rejection of floors. Designing durable price support inside U.S. acquisition law, WTO exposure, and Congressional appropriations is complex. Iteration is expected. Markets, however, priced rumors as reversals.

Where Valuations Actually Break

The sell-off exposes a deeper flaw in coverage: conflating price signals with value creation. NdPr miners trade on upstream optionality, but price floors alone do not resolve the bottleneck. Separation, metal making, alloying, and magnet manufacturing—the midstream—determine durable margins. REEx rankings consistently show that upstream exposure without midstream leverage is a valuation trap during policy ambiguity.

This explains why Arafura, Hastings, Meteoric, and Lindian moved in sympathy. Capital is reacting to narrative risk, not differentiated supply-chain position.

The ETF Illusion Investors Miss

Passive exposure compounds the volatility. Popular rare earth funds, including the VanEck rare earths ETF, include Chinese companies. These are not ex-China instruments. When sentiment wobbles, capital rotates indiscriminately—punishing Western miners while China’s vertically integrated system absorbs the shock.

The Bias to Watch

The quiet bias is policy determinism: the belief that a single mechanism—price floors—can stabilize a fragmented value chain. It cannot. Floors help. They do not substitute for synchronized midstream build-out. Without that, equities will keep trading on headlines instead of throughput.

Why This Matters

This episode reinforces a core REEx lesson: rare earth valuations must be read through a supply-chain lens, not a press-release one. Adjustments are not abandonment. Until investors separate rumor from structure—and upstream from midstream—markets will keep mistaking policy calibration for strategic retreat.

Source: Sharecafe, January 29, 2026.