• Geographer Julie Klinger argues the U.S. could meet rare earth demand through recycling mine waste and electronics rather than opening new mines.
• Her case overlooks critical scale and timing challenges.
• Recycling rates remain below 1% globally, and recovered materials still require the same processing infrastructure dominated by China.
• Recycling is a complement to, not a replacement for, domestic refining capacity.
• The real solution requires unglamorous capital investment in processing capacity first.
• This should be paired with recycling and selective mining.
• Waste recovery should not be treated as a shortcut past the supply chain’s hardest step.

In a February 6 opinion essay (opens in a new tab) in The New York Times, geographer Julie Michelle Klinger (opens in a new tab) contends that fears of China’s rare-earth dominance are exaggerated. She argues that the United States could meet most of its demand by recovering rare earths from mine waste, industrial scrap, and discarded electronics, rather than opening new mines. Mining, she suggests, is slow, environmentally risky, and often unnecessary; recycling and domestic processing should take priority.

Where the Essay Is Solid

Several core points are accurate. Rare earths are not geologically scarce. China’s dominance is concentrated in processing, not in exclusive access to ore. Western nations did, over decades, outsource hazardous and capital-intensive refining to China, eroding domestic expertise. And recycling rates for rare earths remain below 1% globally, an undeniable inefficiency.

Klinger is also right to puncture repeated mining hype—from Greenland to the deep seabed—that has produced headlines rather than durable supply.

Where the Case Breaks Down

The problem is scale and timing. Recycling and waste recovery are necessary—but nowhere near sufficient in the near-to-medium term. Rare earths are used in tiny quantities, embedded in complex products, and locked into magnets and alloys that are expensive and chemically intensive to separate. The U.S. lacks industrial-scale collection, disassembly, and solvent-extraction infrastructure to turn theory into tonnage.

Claims that the U.S. could meet “most” of its needs through waste recovery rest on theoretical resource estimates, not operating systems. “Recoverable” does not mean recoverable economically, at purity, at scale, and on schedule—especially for heavy rare earths such as dysprosium and terbium, which are essential for defense systems and EV drivetrains.

The Missing Middle Everyone Avoids

Ironically, the essay concedes the key truth and then glides past it. Processing is the bottleneck—and recycling does not bypass it. Scrap still must be separated, refined, metallized, and qualified. Without domestic solvent extraction, metal-making, and magnet manufacturing, recycling simply feeds the same choke point China already dominates.

REEx Take

Recycling is a pillar, not a panacea. Treating it as an alternative to mining and processing risks repeating the very mistake that created today’s dependency: confusing material abundance with supply security. The real solution is unglamorous and capital-intensive—processing capacity first, paired with recycling and selective mining.

The New York Times is right to challenge mining mythology. It is wrong to suggest the hardest step can be skipped.

Source: The New York Times, Opinion

• 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)

• MST Access reports Energy Fuels' acquisition of Australian Strategic Materials could create one of the most complete ex-China rare earth supply chains by combining U.S. separation assets with proven metallization capabilities.
• The deal addresses China's downstream dominance in rare earth processing—separation, metallisation, and alloying—rather than upstream mining, creating a credible 'mine-to-metals' Western alternative.
• Expansion plans target 6,000 tonnes per year of NdPr by 2028-2029, though execution risks include high capital intensity, regulatory approvals, and China's continued market influence through pricing controls.

In a detailed February 2026 research report (opens in a new tab), analyst Chris Drew of MST Access examines Energy Fuels’ agreement to acquire Australian Strategic Materials (ASM (opens in a new tab))—a transaction the author argues could create one of the most complete ex-China rare earth supply chains in the Western world. The deal, structured as a Scheme of Arrangement and expected to close by mid-2026, combines Energy Fuels’ U.S. feedstock and separation assets with ASM’s proven metallization and alloying capabilities, directly targeting China’s long-standing dominance in rare earth processing

How the Study Was Conducted

MST Access’s report is an equity research analysis rather than a laboratory study. It synthesizes company disclosures, feasibility studies, balance-sheet data, and project timelines to assess the strategic logic and risks of the acquisition. The analysis tracks assets across the full rare earth value chain—mining, separation, metallisation, and alloying—and evaluates whether the combined entity can realistically deliver at scale outside China.

Key Findings: Where the Leverage Really Lies

The report’s central conclusion is straightforward: China’s advantage is downstream, not upstream. While rare earth ores exist globally, China controls the most difficult stages—separation, metallisation, and alloy production. Energy Fuels provides feedstock supply and separation capacity at its White Mesa Mill in Utah, which currently produces light rare earths and is piloting heavy rare earth separation. ASM contributes something far rarer in the West: commercial-scale metallization and alloying, already operating at its Korean Metals Plant and planned for duplication in the United States.

According to MST, this combination creates a “mine-to-metals” platform capable of delivering rare earth metals and alloys without relying on Chinese processors—an industrial configuration few Western firms can currently match.

Implications for the China Monopoly

For policymakers and investors, the implication is not that China’s monopoly is broken—but that a credible alternative pathway is emerging. The report highlights planned expansions at White Mesa, including a Phase 2 project targeting up to 6,000 tonnes per year of NdPr and meaningful quantities of dysprosium and terbium, contingent on financing and construction timelines. If executed, this would materially reduce Western exposure at the most sensitive processing stages.

Limitations and Open Risks

The analysis is candid about constraints. Most expansion plans extend to 2028–2029, underscoring that rare earth processing capacity cannot be built overnight. Capital intensity is high, regulatory approvals remain pending, and China retains the ability to influence markets through pricing and export controls. The report also notes that the successful integration of ASM’s assets and the completion of the acquisition are critical execution risks.

Conclusion

MST Access’s study does not claim a silver bullet. Instead, it documents a structural response to China’s dominance in rare earths: vertical integration across feedstock, separation, and alloying within allied jurisdictions. If delivered as outlined, the Energy Fuels–ASM combination would mark one of the most tangible Western efforts yet to compete where China has been strongest for decades.

Source: MST Access, “Fueling Up: Energy Fuels to Acquire ASM,” February 4, 2026

• 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).

• The US launched a 54-nation summit excluding China.
• Aim: Reduce dependence on Chinese critical mineral processing.
• Methods: Preferred trading blocs, reference pricing, and new resource agreements.
• China currently holds 90% dominance in refining.
• Policy framework acknowledges urgent need for rebuilding Western processing capacity.
• Risk: Enforcing price floors across fragmented democracies may lead to higher input costs.
• Higher costs could potentially strengthen China's competitive advantage.
• Investors should focus on monitoring processing plants, magnet factories, and binding offtake agreements.
• Political announcements are less significant compared to the real indicators.
• Supply security is incomplete without engaging the dominant processor.

By February 4, 2026, the United States unveiled a sweeping plan to reduce dependence on China for critical minerals by forming a preferred trading bloc with allies, introducing reference prices and potential price floors, and signing new resource agreements. The goal: protect Western supply chains from low-cost competition and improve long-term security. The idea is bold—but execution remains uncertain, especially given China’s near-total dominance in mineral processing.

At the Washington summit—attended by representatives from 54 countries and the EU—China was absent. That absence may be symbolic, but it is also the plan’s central vulnerability.

Where Reality Backs the Rhetoric

The factual core is solid. China dominates roughly 60% of global rare earth mining and close to 90% of separation, refining, and downstream processing. This is not merely a mining issue; it is an industrial one. Western nations, particularly in Europe, have allowed processing capacity to atrophy—an erosion explicitly flagged by the European Court of Auditors.

Matthias Rüth, Managing Director of TRADIUM GmbH (opens in a new tab)

In this context, comments from Matthias Rüth, Managing Director of TRADIUM GmbH (opens in a new tab), align with industry reality: processing expertise accumulated over decades cannot be rebuilt on a political timetable.

Where Policy Starts Floating Free of Hardware

Minimum price mechanisms and reference pricing sound orderly, but commodity markets are neither static nor obedient. Enforcing price floors across multiple value-chain stages would require sustained coordination, compliance, and enforcement—historically rare in fragmented democracies.

Tariffs as an enforcement backstop risk collateral damage. Higher input costs for downstream manufacturers may undermine the very industries the policy aims to protect, inadvertently reinforcing China’s competitive advantage in finished goods.

The Narrative Tilt No One Mentions

The proposal frames China primarily as a distortion to be countered, not a system to be reckoned with. This is a strategic choice—but also a bias. China’s absence from the summit does not reduce its leverage; it highlights it. Any near-term supply security strategy that excludes the dominant processor is, by definition, incomplete.

Why This Actually Matters

What’s notable is not the elegance of the framework—it’s the admission of urgency. Western governments are finally acknowledging that rare earth security requires industrial policy, capital discipline, and downstream rebuilding, not just new mines and friendly communiqués.

For investors, the signal is clear: watch processing plants, magnet factories, and binding offtake agreements—not speeches.

Source: TRADIUM Market Insight, February 6, 2026

• The US and UAE signed a framework to cooperate on critical minerals and rare earths.
• This partnership leverages American policy tools with Emirati investment capital to reduce dependence on China's dominance in mining and processing.
• China holds 70% of the mining and 90% of the processing control over these resources.
• The agreement is strategic but currently lacks concrete projects, such as named mines, tonnage commitments, or separation plants.
• Realistic timelines for building processing capacity are estimated at 5-7 years, even with funding.
• Gulf capital's speed and flexibility could potentially change the financing landscape for Western rare earth projects.
• However, financial investments alone won't solve the chemical and capacity challenges needed to reduce China's influence.

The United States and the United Arab Emirates have signed a framework to cooperate on critical minerals and rare earths, aiming to reduce reliance on China. Announced during a Washington ministerial hosted by U.S. Secretary of State Marco Rubio, the deal links U.S. tools, such as stockpiles, to the UAE’s strategic reserves and investment capacity. It builds on Pax Silica, a U.S.-led alliance focused on AI-related supply chains that the UAE joined earlier this year. In short, Washington brings policy, Abu Dhabi brings capital, and both hope to speed up non-Chinese supply chains.

What’s Real—and Worth Noting

This is a framework, not a treaty or project announcement. That matters. The agreement commits the two governments to coordinate policy, align public and private investment, and use existing tools to accelerate supply and processing. There are no named mines, no tonnage commitments, and no new separation plants—yet.

Still, the strategic intent is accurate and significant. China remains dominant—roughly 70% of rare earth mining and about 90% of processing—and U.S.officials now openly frame this as a national security risk. TheUAE’s role is not as a miner but as a financial and logistics hub, capable of deploying large, patient capital where Western projects often stall.

Where Optimism Runs Ahead of Physics

What the coverage gets right—but could emphasize more—is the time problem. Processing and separation capacity cannot be conjured by frameworks. Even with capital, building refineries, training operators, and achieving stable yields typically takes five to seven years. Stockpiles and forums buy time; they do not replace chemistry.

The newly announced FORGE initiative (Forum on Resource Geostrategic Engagement) sounds muscular, but enforcement mechanisms remain undefined. Without downstream buildout, coordination risks becoming declarative.

Why This Matters in Rare Earth Terms

The notable shift is in who shows up with money. Gulf capital—fast, flexible, and comfortable with long-duration bets—could shorten timelines for allied projects if paired with processing assets in the U.S. or friendly jurisdictions. That does not end China’s dominance, but it changes the financing equation, which has quietly been the West’s weakest link.

About the Source

The National is an Abu Dhabi–based English-language daily with strong access to Gulf policy and investment circles. Its reporting is generally pro-development and establishment-aligned—useful for understanding intent, while warranting scrutiny on execution.

REEx Take

This pact won’t crack China’srare earth grip overnight. But it signals something new: serious capital stepping onto the board. In rare earths, money doesn’t solve chemistry—but it decides who gets the chance to try.

Source: The National (UAE)

• Baogang Group held key meetings signaling intensified Chinese Communist Party control over strategic rare-earth and steel industries through expanded anti-corruption enforcement and political supervision mechanisms.
• Leadership mandated embedding Xi Jinping's financial policies and party ideology across operations, treating discipline inspection as corporate governance rather than mere compliance.
• Western policymakers must recognize Chinese industrial suppliers as extensions of state power, where supply-chain risk is inseparable from CCP governance and national strategy execution.

China’s state-owned steel and rare-earth conglomerate Baogang Group has convened two senior leadership meetings that—taken together—signal a renewed push to tighten Chinese Communist Party (CCP) (opens in a new tab) control over a strategically important industrial platform with direct relevance to global rare-earth and heavy industry supply chains.

Anti-Corruption as a Governance Mechanism—Not Just Compliance

On February 5, Baogang held the 4th plenary session of its 9th Discipline Inspection Commission, combined with a 2026 party discipline, “clean governance,” anti-corruption work meeting, and a warning/education conference. The company’s messaging framed anti-corruption as an operational necessity for “high-quality development,” but the language and structure reflect something broader: discipline inspection as corporate governance and political command.

Baogang’s Party Secretary and Chairman Meng Fanying emphasized raising “political standing,” aligning thought and action with the central leadership’s assessment of conditions and priorities, and “putting power into the cage of a system of governance”—a well-known CCP governance phrase meaning tighter institutional constraint and control over decision-making. She also stressed advancing (full strict governance of the Party) as the condition for meeting the company’s goals in the “15th Five-Year” era.

The internal watchdog—Baogang’s Discipline Commission leadership—signaled that 2026 will bring deeper political supervision, expanded inspection mechanisms, and sustained “high-pressure” anti-corruption posture. In practice, that language typically denotes more enforcement leverage, more internal oversight, and less managerial autonomy in politically sensitive enterprises.

Ideology Moves Into Finance and Operations

A separate Baogang Party Standing Committee meeting the same day focused on implementing Xi Jinping’s recent speeches and policy guidance, including the “Chinese-style path to financial development” and building a “financial powerhouse.” Baogang’s leadership was directed to embed financial thinking into corporate management, while keeping CCP leadership “comprehensively” present across the business.

The meeting also reiterated priorities that look like ordinary modernization—intelligent manufacturing, digital transformation, and “new quality productive forces”—but anchored them in political compliance and centralized policy execution. The agenda also included strict emphasis on safety management and cadre selection, reinforcing that personnel, risk, and operational discipline remain inseparable from party control.

Why This Matters to the West

These meetings do not announce a new rare-earth export rule or a new quota. What they signal is arguably more important: China’s strategic suppliers are being further fused into the Party-state command structure. And this should be noted in the West and in America.

For U.S. and allied investors and policymakers, the implications are clear:

• Key Chinese industrial actors should be treated as extensions of state power, not purely commercial firms.
• “Anti-corruption” functions as control architecture—not merely transparency reform.
• Industrial upgrading, finance, safety, and personnel decisions are increasingly executed as policy instruments tied to national strategy.

As Western economies attempt to de-risk rare-earth dependence, Baogang’s messaging reinforces a hard reality: supply-chain risk is inseparable from CCP governance.

Disclosure / Disclaimer: This news item is derived from media published by a Chinese state-owned enterprise. All claims, priorities, and implications should be independently verified using non-state, third-party sources before being relied upon for investment, policy, or national-security analysis.

• 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.

• China's National IP Administration has designated Baogang Group Mining Research Institute as a National IP Demonstration Enterprise, placing it into a three-year program focused on strengthening patent creation, protection, and commercialization in strategic mining technologies.
• The institute controls patents across mineral separation, rare earth processing, industrial waste recycling, and environmental compliance—signaling China's strategy to dominate not just mineral supply but the IP infrastructure governing future materials processing.
• This designation reflects China's integration of mining R&D with IP ownership and standards-setting, potentially creating patent density and licensing barriers for Western firms pursuing alternative processing pathways.

China’s National Intellectual Property Administration (opens in a new tab) has named the Baogang Group Mining Research Institute a National Intellectual Property Demonstration Enterprise (Cultivation Track)—a designation reserved for organizations Beijing considers strategically important to its innovation-led industrial policy.

The designation places Baogang’s mining research arm into a three-year national development program focused on strengthening intellectual property creation, protection, management, and commercialization across the full innovation lifecycle. In Chinese policy terms, this signals entry into a nationally prioritized technology cohort, typically associated with regulatory support, preferential policy treatment, and elevated visibility within state-backed industrial and standards-setting initiatives.

What Baogang Is Being Recognized For

The institute serves as the core research engine supporting Baogang Group’s mining and materials operations, including work linked to Bayan Obo, the world’s largest known rareearth deposit. According to the announcement, the institute has built aconcentrated intellectual property portfolio covering:

• Mineral separation and beneficiation technologies
• Integrated utilization of complex and polymetallic ores
• Industrial solid-waste recycling and secondary resource recovery
• Environmental protection and pollution-control processes

Beyond patent ownership, the institute plays a more strategic role in China’s IP system. Its researchers have participated in drafting national guidelines and standards for patent pools, patent valuation, and IP commercialization frameworks. Several so-called “high-value patents” have reportedly been transferred from the lab into operational industrial use—an outcome Beijing increasingly prioritizes over headline patent counts.

The Strategic Signal to the West

This designation is not merely symbolic. It reflects China’s continued effort to embed intellectual property control into upstream and midstream mining and materials technologies, including processing, waste recovery, and environmental compliance.

For the United States and allied economies, the signal is clear:

• China is tightly integrating mining R&D, IP ownership, standards participation, and industrial deployment.
• Competitive advantage is shifting toward how minerals are processed, not just where they are mined.
• Western firms pursuing alternative rare-earth processing or recycling pathways may increasingly encounter patent density, licensing complexity, or standards-based barriers linked to Chinese institutions.

What Comes Next

The institute will now enter a formal three-year construction and evaluation phase, during which it is expected to expand its patent portfolio, strengthen IP governance, improve protection mechanisms, and accelerate commercialization. Successful completion would qualify it for full National Intellectual Property Demonstration Enterprise status following government review.

Bottom line: China is reinforcing leadership not only in critical mineral supply, but in the intellectual property infrastructure that governs future materials processing and industrial standards.

Disclosure / Disclaimer: This news item originates from Chinese media affiliated with a state-owned enterprise. All claims, achievements, and strategic implications should be independently verified using non-state and third-party sources before being relied upon for investment, policy, or national-security analysis.

• Hallgarten's 2026 report argues the U.S. has lost its mining empire, remaining structurally dependent on foreign capital and processing capacity despite political rhetoric around reshoring critical minerals.
• The analysis reveals that owning raw minerals means nothing without control of downstream processing—China's true advantage lies in refining and metallurgical capabilities, not just mining.
• Strategic stockpiles may buy time, but without deep investment in midstream processing, workforce skills, and sustained capital, the West risks confusing symbolic activity with actual supply-chain sovereignty.

In a forceful January 2026 market review, veteran mining analyst Christopher Ecclestone, editor of Hallgarten & Company (opens in a new tab), argues that the United States has quietly lost its mining “empire”—and may be mistaking noise for progress in critical minerals. In The End of Empire (opens in a new tab), Ecclestone contends that despite political rhetoric around reshoring, stockpiling, and strategic minerals, the U.S. remains structurally dependent on foreign capital, foreign operators, and—most critically—foreign processing capacity, particularly in rare earths and specialty metals.

What Hallgarten Examined—and How

Hallgarten’s report is not a laboratory study but a market strategy analysis, blending commodity price data, historical case studies, capital-market behavior, and geopolitical context. Across more than a dozen pages, the review surveys metals markets (tin, tungsten, precious metals), U.S. mining capacity, and recent government initiatives such as strategic stockpiles and proposed price supports. Charts and tables—such as tin prices exceeding $50,000/tonne (page 6) and a breakdown of the proposed $12 billion U.S. “Project Vault” stockpile (page 10)—anchor the argument in observable market data.

Key Findings

Hallgarten’s core claim is blunt: the West confuses ownership of minerals with control of supply chains. According to the report, most meaningful mining and processing activity in the U.S. is carried out by Canadian, Australian, or UK-listed firms, while rare earth ventures touted as “national champions” remain financially fragile and operationally immature.

On stockpiling, Ecclestone is cautiously supportive but skeptical of public theatrics. He argues that strategic reserves work best when built quietly—citing Japan’s long-standing model—rather than when broadcast to markets, which can inflate prices and reward speculative projects over resilient supply chains.

Crucially for rare earths, the report underscores that China’s advantage lies downstream. Mining alone does not confer power; processing, refining, and metallurgical know-how do. Without rebuilding these capabilities, Western stockpiles risk becoming symbolic buffers rather than strategic leverage.

Implications for the China Monopoly

The takeaway is simple: you cannot break a monopoly by buying raw materials if your rival controls the factories that turn them into usable products. Hallgarten’s analysis implies that U.S. and allied policy remains fragmented—focused on upstream mining while neglecting midstream processing, workforce skills, and capital markets capable of sustaining cyclical commodity businesses.

Limitations and Controversial Notes

The report is intentionally provocative and openly opinionated. Some characterizations—particularly of U.S. rare earth companies and political figures—reflect Ecclestone’s long-held skepticism rather than neutral consensus. The analysis also downplays emerging industrial-policy tools (e.g., EXIM and DFC financing) that may yet alter outcomes. Readers should treat the work as a strategic critique, not a forecast certainty.

Conclusion

Hallgarten’s End of Empire is less an obituary than a warning. Strategic stockpiles may buy time, but without deep investment in processing, pricing discipline, and talent, the West risks confusing activity with capability. As Rare Earth Exchanges has repeatedly argued, supply-chain sovereignty is built—slowly, expensively, and unglamorously—not declared.

Source

Ecclestone, C. Monthly Resources Review: The End of Empire (Hallgarten & Company, Feb. 5, 2026)

Portfolio_January2026

• EXIM approved $10 in long-term loans to launch Project Vault, a public-private partnership creating a U.S. Strategic Critical Minerals Reserve with early participants including GE Vernova, Boeing, Clarios, and Western Digital.
• Project Vault provides strategic insurance against supply shocks but stockpiles alone cannot solve chronic supply deficit without comprehensive industrial policy addressing upstream mining, mid-separation/refining, and downstream manufacturing.
• REE advocates that true sovereignty requires a full-spectrum strategy: pricing support, midstream buildout, downstream IP, workforce development, regulatory reform, and allied financing—not storage alone.

The Export-Import Bank of the United States has approved up to $10 billion in direct lending to launch Project Vault, establishing a U.S. Strategic Critical Minerals Reserve through a public-private partnership. Announced alongside President Trump, the initiative aims to buffer U.S. manufacturers from supply shocks, reduce dependence on foreign-controlled supply chains, and anchor domestic production and processing. Early OEM participants include GE Vernova, Boeing, Clarios, and Western Digital, with suppliers such as Traxys, Mercuria Americas, and Hartree Partners. EXIM says the structure targets taxpayer-positive returns while strengthening U.S. manufacturing jobs and national security.

Project Vault — Q&A

Why A Stockpile is not Enough

A stockpile like Project Vault is necessary—but on its own, it is strategic insurance, not strategic power. Rare Earth Exchanges has argued consistently that without a comprehensive industrial policy, a reserve risks becoming a static warehouse in a dynamic geopolitical war.

First, stockpiles do not create supply. They smooth shocks, but they don’t solvechronic upstream deficits. Without aligned incentives for mining—price floors, offtake guarantees, or risk-sharing capital—new projects won’t reach FID. Capital flees volatility, and critical minerals remain among the most volatile commodities on Earth.

Second, midstream is the real choke point. Separation, refining, alloying, and magnet-making are where China dominates. A stockpile of oxides is useless if the U.S. and allies lack scalable, cost-competitive processing. That requires long-term pricing support and coordinated demand signals across OEMs—not one-off loans. If not, nascent magnet makers will fall prey to market forces within a couple of years---and this could be disastrous—they essentially can’t keep up with Chinese pricing, go out of business, and/or become acquired by the Chinese.

Third, downstreammanufacturing and IP matter as much as tonnage. Without sustainedR&D, patent protection, and allied standard-setting, the West risks subsidizing inputs while China captures value in finished components. China now focuses on Two Ear Earth Base China and owning the future of the industry downstream.  Industrial policy must reward innovation, not just extraction.

Fourth, talent and workforce are missing links. Processing engineers, metallurgists, magnet designers, and industrial chemists cannot be conjured overnight. REEx has stressed the need for allied training pipelines—U.S., EU, Japan, Australia, Canada—treated as a shared strategic asset.

Fifth, fragmented permitting and funding kill momentum. The U.S. still runs critical minerals through a maze of agencies, timelines, and mismatched programs. Without rationalized permitting, synchronized DoD–DOE–EXIM–DFC financing, and multinational co-investment platforms, even well-funded projects stall.

Finally, this is a coalition problem, not a national one. China’s advantage is scale across borders—mines, refineries, factories, banks, and diplomacy moving in lockstep. A stockpile without a tight, rules-based multinational alliance merely delays dependence; it does not end it.

Bottom line: Project Vault buys time. Only a full-spectrum industrial strategy—pricing support, midstream buildout, downstream IP, workforce development, regulatory reform, and allied financing—converts time into sovereignty. Rare Earth Exchanges has been clear: resilience is engineered, not stored or a series of reactions.

• China's strategic leverage over semiconductors stems from its control of rare earth processing, refining, and magnet production—not just mining—making midstream capabilities the real geopolitical choke point.
• India possesses significant rare earth resources but remains dependent on Chinese derivatives due to limited industrial capacity, regulatory constraints, and an underdeveloped downstream processing infrastructure.
• Allied partnerships like iCET can diversify supply chains only when paired with credible domestic industrial policy, institutional reform, and investment in processing, alloys, and recycling capabilities.

Researchers Ratnadeep Maitra, Department of International Relations and Governance Studies, Shiv Nadar University, Delhi-NCR, and Tapas Das, Kandi RajCollege, University of Kalyani, India argue in a January 2026 UNISCIJournal analysis that rare earth elements have shifted from “just minerals” into instruments of national security and geo-economic power—and that China’s near-monopoly over rare earth processing and refining, more than its mining output, is the real choke point shaping semiconductor and advanced-technology supply chains. Their core message for lay readers: countries can have rare earths in the ground and still be dependent—because the “power” lives in the refineries, separation chemistry, magnet-making, and know-how.

Overview

This is a strategic policy analysis, not a lab experiment. The authors use two well-known international-relations frameworks—“complex interdependence” (Keohane & Nye) and “multi-dimensional security” (Buzan)—to interpret how supply chains became security assets after COVID-era disruptions and amid U.S.–China technology rivalry. They then apply that lens to semiconductors and critical minerals, positioning rare earths as a prime example of “weaponizable” dependency.

Key Findings

1. Processing is the monopoly that matters. The paper emphasizes that China’s leverage stems from control of midstream and downstream nodes—separation, refining, and magnet production—allowing export restrictions to function as a strategic tool.
2. India’s bottleneck is not geology—it’s industrialcapacity. Despite significant resource potential (notably coastal mineral sands), India is described as constrained by limited private participation, environmental and waste-management complexity, and thin downstream capabilities—leading to continued dependence on Chinese rare-earth derivatives.
3. Allied frameworks help, but don’t substitute for domestic buildout. The authors argue initiatives like the Initiative on Critical and Emerging Technology (iCET) and broader partnerships can diversify supply only if paired with credible domestic institutional reform and industrial sequencing.

Implications for markets and policy

For investors, the paper reinforces a hard truth: rare earth resilience is an industrial policy project, not a mining project. India’s opportunity—like America’s—is to move from upstream extraction to processing, alloys, magnets, and recycling, where margins and leverage are higher.

Limitations and controversies

Because the article is theory-forward, it does not provide new production data, cost curves, or project-level feasibility. Some readers may view its “weaponization” framing as geopolitically loaded; others will argue it understates the practical barriers (capital, permitting, waste) to replicating China’s decades-long processing base quickly. Those debates are real—and they are precisely where policy can drift into rhetoric.

Citation: Maitra, R., & Das, T. (2026). India and the Rare Earth Conundrum: Navigating Security, Geoeconomics and Global Supply Chains. UNISCI Journal 70–71. DOI: 10.31439/UNISCI-256.

• 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)

• Chinese researchers have solved manufacturing bottlenecks in rare-earth weathering steel production.
• This enables stable large-scale incorporation of rare earths to create longer-lasting, corrosion-resistant steel for harsh industrial environments at lower lifecycle costs.
• The material is already deployed commercially in:
  • 5G towers
  • solar mounts
  • highway guardrails
  • bridges across multiple Chinese provinces
• This development exemplifies China's broader strategy of leveraging rare-earth dominance to industrialize performance improvements across foundational materials.
• China combines resource control with R&D and standards-setting to shape future industrial ecosystems.

Chinese industry groups and researchers convened a technical exchange in eastern China to promote the expanded industrial use of rare-earth-enhanced weathering steel, positioning it as a lower-cost, longer-life solution for harsh environments such as coal storage, conveyor systems, trestle structures, and other open-air industrial facilities.

The meeting, hosted by the Shanghai University (Zhejiang) Institute for High-End Equipment Materials (opens in a new tab) and Shanghai Shuyuan Technology (opens in a new tab), focused on applying rare-earth-alloyed weathering steel to infrastructure exposed to high humidity, corrosion, abrasion, and pollution—conditions that rapidly degrade conventional carbon steel.

Downtown Shanghai

REEx Reflections Downstream

Rare earth innovation in steel makes everyday industrial structures stronger, longer-lasting, and cheaper to maintain. By adding small amounts of rare earth elements to steel, engineers can help it resist rust, cracking, and wear in harsh conditions like heat, moisture, pollution, and heavy use. This means things like bridges, conveyor belts, power towers, solar mounts, and industrial buildings can last much longer without frequent repairs or repainting.

Over time, this lowers maintenance costs, reduces downtime, improves safety, and saves money for companies and governments. Because these steels perform better over their full lifetime—not just on day one—they can replace more expensive alloys and give manufacturers a competitive edge in industries that depend on durable infrastructure.

What’s New Technically

Presenters reported that after more than a decade of development, Chinese researchers have addressed a longstanding manufacturing bottleneck: the low yield and poor controllability of rare-earth additions in steelmaking. According to technical briefings, rare-earth elements can now be stably incorporated at scale, enabling consistent batch production suitable for industrial deployment.

The material improvements cited include:

• Modified inclusion morphology
• Increased grain-boundary energy
• Formation of denser, more protective oxide layers

Together, these changes are reported to improve pitting corrosion resistance, durability, and mechanical performance, extending service life while reducing lifecycle maintenance costs.

From Pilot to Practice

Speakers said rare-earth weathering steel is already deployed in:

• 5G telecommunications towers
• Solar mounting systems
• Highway guardrails
• Bridges
• Industrial steel structures

Field applications in Hebei, Shandong, and Xinjiang suggest the material has moved beyond laboratory validation into early commercial use according to the Chinese Society of Rare Earths.

Why This Matters Beyond Coal

While the immediate focus is coal logistics, the broader implication is materials substitution at scale. Rare-earth-enhanced steels could increasingly displace conventional corrosion-resistant alloys across infrastructure, utilities, transport, and energy systems—particularly where lifecycle economics, rather than upfront material cost, drive procurement decisions.

For Western manufacturers and policymakers, the significance lies less in novelty than in execution. China is not inventing corrosion-resistant steel; it is industrializing incremental metallurgical gains through coordinated R&D, standards development, and deployment. Over time, this approach can translate into cost advantages, export competitiveness, and standards lock-in.

The Bigger Pattern: Owning the Future, Not Just the Mine

Consistent with _Rare Earth Exchanges’_™ reporting, this development reflects a broader strategic shift. China is increasingly leveraging its dominant position across rare-earth supply chains—from mining and separation to downstream processing—coupled with sustained R&D, to drive cross-sector innovation. The objective is not simply to supply inputs, but to shape entire industrial ecosystems.

That strategy now spans defense and advanced materials, electronics and power systems, life sciences instrumentation, and emerging platforms such as humanoid robotics, autonomous systems, and drones—all of which depend on high-performance materials whose properties are tuned at the atomic and nano scale.

Standards First,Markets Follow

Participants acknowledged adoption barriers, including conservative engineering norms and incomplete application standards. The meeting concluded with agreement to accelerate industry standards drafting, full-lifecycle evaluation, and industry–academia collaboration—a familiar sequence in China, where standard-setting often precedes rapid market expansion.

Bottom Line

China is using rare earths not only to dominate magnets and electronics, but to upgrade foundational materials across heavy industry. Rare-earth weathering steel is a small but telling example of a larger playbook: combine resource leverage, applied science, and standards to own future industrial performance, not just today’s supply. Rare Earth Exchanges suggest this is certainly a trend that policymakers in the West should be monitoring.

Disclaimer: This item is translated from reporting by Shanghai University (Zhejiang) Institute for High-End Equipment Materials and affiliated Chinese outlets. As the sources are linked to state-supported institutions, technical claims, performance metrics, and adoption timelines should be independently verified before being relied upon for investment or policy decisions.

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

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

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

What’s Firm—and What’s Still Contingent

Established facts:

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

Still unresolved:

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

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

Why These Assets Matter

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

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

Power Without a Flag

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

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

REEx Takeaway

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

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

Investor Profile

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

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

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

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

• Secretary Rubio signals US interest in Argentina as a critical minerals partner to reduce China dependence, though the country has no operational rare earth production capacity yet.
• Argentina offers $14 billion in verified copper mining investments under RIGI incentives, but rare earth separation capabilities remain unproven despite diplomatic rhetoric.
• Argentina's $14.5B trade relationship with China versus $8.6B with the US complicates its strategic positioning as a non-exclusive rare earth supply chain alternative.

At the inaugural U.S. Critical Minerals Ministerial, Secretary of State Marco Rubio delivered a message designed to resonate well beyond Washington: Argentina, he said, “has the capacity in terms of natural resources … not just for the United States, but for the world.”

Meaning?  The takeaway is simple: the U.S. is looking for partners to reduce dependence on China for minerals critical to technology, defense, and advanced manufacturing—and Argentina is being publicly welcomed into that conversation.

Trump Administration Goal—Tighten Critical Mineral Collaboration

But in rare earths, words are cheap; separations are not.

What Argentina Actually Has—and What It Doesn’t (Yet)

Argentina is unquestionably a heavyweight in lithium, copper, and base metals, with growing institutional credibility under President Javier Milei’s market-oriented reforms. However, commercial rare earth production is another matter.

There are no producing rare earth mines, no established separation plants, and limited publicly disclosed resource data meeting Western reporting standards.

Rubio’s statement, captured by the Buenos Aires Times (opens in a new tab), that Argentina has “expertise in processing” is accurate in mining and metallurgy broadly, but not yet proven at scale for rare earth separations, the true choke point in the supply chain.

This distinction matters. Rare earths are not scarce rocks—they are chemistry problems.

Diplomacy Meets Investment Incentives

Argentina’s Foreign Minister Pablo Quirno (opens in a new tab) struck a more grounded note, emphasizing “clear rules and long-term predictability.” That phrasing aligns closely with investor concerns: permitting, currency stability, capital controls, and contract enforcement—not just geology—determine whether projects get built.

Pablo Quirno, Foreign Minister

Quirno’sannouncement of ~US$14 billion in incoming mining investment underArgentina’s RIGI incentive framework—largely tied to copper projects like El Pachón and MARA—is concrete and verifiable. These are real assets moving toward construction, unlike speculative rare earth narratives.

The China Question, Quietly Loud

China’s dominance in rare earth processing is the unspoken subtext. Argentina’s close economic ties with Beijing complicate the story, even as Buenos Aires signals alignment with Washington. Balancing both powers may be politically rational—but for rare earth supply chains, alignment without exclusivity limits strategic value.

Note Argentina trades significantly more with China than the United States, with China serving as a top import source and major buyer of agricultural goods, while the U.S. remains a key, albeit smaller, partner. In 2023, Argentina's tradevolume with China was roughly $14.5 billion, compared to $8.6 billionwith the U.S.

What’s Notable—and What’s Premature

Notable:

• The U.S. is broadening its critical minerals diplomacy beyond the usual suspects.
• Argentina is positioning itself as a rules-based, investment-friendly jurisdiction.

Premature:

• Treating Argentina as a near-term rare earth supplier without proven resources, separation capacity, or offtake pathways.

REEx Takeaway

Argentina may become important in the rare earth ecosystem—but today it is aspirational, not operational. Investors should separate copper-scale reality from rare-earth rhetoric. Rubio’s remarks are best read as strategic signaling, not a geological verdict.

The story to watch is not what Argentina could supply, but whether it chooses to build the hardest part of the chain. Only time, deal-making, and delivery will tell.

• 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 U.S. Trade and Development Agency (USTDA) is expanding its strategic role in securing critical minerals access through:
  • Early-stage capital
  • Project development
  • Commercial partnerships
  • Spanning the entire mining lifecycle from exploration to infrastructure
• USTDA announced three major initiatives:
  • Five global critical minerals convenings
  • A copper-cobalt feasibility study in Zambia targeting 25,000 metric tons annually
  • New scoping missions pairing U.S. companies with emerging market opportunities
• Unlike subsidy-focused programs, USTDA:
  • Positions U.S. firms at the front end of global mineral development
  • Funds feasibility studies and validates project economics
  • Creates commercially viable alternatives to China-centric supply chains

As Washington sharpens its focus on supply-chain resilience, the U.S. Trade and Development Agency (opens in a new tab) is expanding its role as one of the federal government’s most practical—and often underappreciated—tools for securing access to critical minerals and rare earth elements.

At theinaugural Critical Minerals Ministerial hosted by the U.S. Department of State, senior U.S. officials delivered a clear message: rebuilding secure mineral supply chains will require more than policy declarations. It will demand early-stage capital, credible project development, and trusted commercial partnerships. This is precisely where USTDA operates.

Secretary Marco Rubio (opens in a new tab), delivering opening remarks in Washington, D.C., framed critical minerals as a foundational pillar of U.S. economic security and national defense—setting the stage for USTDA’s latest programming commitments.

“USTDA’s approach to critical minerals offers our partners a responsible alternative for developing their natural resources while reducing China’s stranglehold on essential supply chains,” said Thomas R. Hardy (opens in a new tab), USTDA’s Deputy Director.

Thomas R. Hardy, USTDA’s Deputy Director

From Geology to Infrastructure: A Full-Cycle Strategy

Unlikeagencies focused narrowly on extraction, USTDA’s critical minerals strategy spans the entire mining life cycle—from exploration and processing to the often-overlooked infrastructure required to bring projects to market, including power generation, rail, and port facilities.

This lifecycle approach reflects a hard-earned reality confronting the United States and its allies: minerals without logistics are stranded assets. By addressing upstream technical work alongside enabling infrastructure, USTDA positions projects for commercial viability rather than perpetual feasibility.

Three Concrete Moves That Matter

1. Global Critical Minerals Events

USTDA will host five international convenings to promote secure, transparent, and diversified critical minerals supply chains. These events will connect U.S. mining companies, technology providers, engineering firms, and infrastructure developers with vetted projects in emerging markets—positioning U.S. firms early, before financing and procurement decisions are locked in.

2. Zambia Copper & Cobalt Feasibility Study

In partnership with Metalex Africa Zambia Limited, USTDA has issued a Request for Proposals for a U.S. company to lead a feasibility study at the Kazozu copper and cobalt project. The study will evaluate expansion potential of up to 25,000 metric tons annually, targeting metals critical to electronics, energy systems, and defense applications. (RFP closes February 17, 2026.)

3. Critical Minerals Scoping Missions

USTDA will fund new scoping missions that pair U.S. companies with high-impact opportunities across emerging markets—helping identify, structure, and de-risk projects spanning exploration, extraction, processing, and supporting infrastructure.

Why This Matters for Investors and Industry

USTDA does not mine, refine, or manufacture. Its influence lies upstream—funding feasibility studies, validating project economics, and shaping bankable pipelines that can later attract private capital, development finance institutions, and strategic offtakers.

In an era defined by efforts to diversify away from China-centric supply chains, USTDA’s model stands out for its emphasis on early intervention with commercial discipline, rather than broad-based subsidies or post hoc bailouts.

Bottom Line

While larger initiatives such as CHIPS and Project Vault capture headlines, USTDA is doing the quieter work of converting policy intent into investable projects. By positioning U.S. firms at the front end of global critical minerals development, the agency is helping ensure that future supply chains are not only secure—but commercially grounded.

For investors tracking the evolution of America’s critical minerals strategy, USTDA’s expanding footprint is a signal worth watching.

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

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

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

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

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

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

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

That is the policy layer.

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

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

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

Capital Stack (as filed)

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

Government Equity Economics

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

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

Conditions First, Capital Later

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

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

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

Milestone-Gated Cash: Industrial Finance, Not Venture Capital

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

Round Top (Dec 2026–Dec 2028):

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

Metals & Alloy (Mar–Dec 2027):

• Technical feasibility
• Commercial qualification

Magnet Manufacturing (Jun 2026–Mar 2028):

• Initial production and demandvalidation
• Incremental capacity and demand validation

Miss a milestone → funding does not release.

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

Meanwhile, the company must still:

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

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

What Holds—and Where the Squeeze Tightens

Several core critiques remain intact:

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

Important nuance matters:

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

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

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

Illustrative, conservative math:

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

Against:

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

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

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

Complexity Is Not Free Diversification

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

• New circuits
• New QA specifications
• New waste streams

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

LCM Helps—But It Doesn’t Change the Rock

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

Magnets: Real Progress, No Free Pass

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

• Repeatability
• Yield
• Specification compliance
• Customer qualification

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

The Risk Many Investors Miss: Asymmetric Dilution

Per the SEC disclosure:

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

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

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

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

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

Bottom Line

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

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

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

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

• 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

• Shenghe Resources completed full acquisition of Peak Rare Earths, gaining control of Tanzania's Ngualla rare earth project, while advancing African zirconium-titanium assets as part of an overseas expansion strategy.
• The company launched an upgraded compliance framework and export control training, signaling adaptation to heightened global scrutiny of Chinese critical mineral operations.
• Shenghe positions zirconium-titanium projects as a 'second growth curve' alongside rare earths, broadening critical minerals portfolio to hedge price cycles and leverage shared infrastructure.

On January 29–30, Shenghe Resources held its 2025 Annual Meeting in Chengdu under the theme “Shared Prosperity, Global Reach.” The meeting reviewed the 2025 performance of all business segments and subsidiaries and examined the annual work report delivered by the company’s General Manager.

The meeting provided a comprehensive summary of the company’s performance in 2025. It noted that Shenghe closely tracked market trends, seized opportunities, and achieved major progress in operating results, institutional development, and overseas business expansion. The company highlighted achievements in technological innovation, optimization of internal and external operating environments, and deeper integration of business units and organizational structures.

Following a smooth leadership transition last year, Shenghe focused on improving governance and accelerating overseas project development. The company completed the full acquisition of Peak Rare Earths, thereby gaining control of the Ngualla rare earth project in Tanzania, while making steady progress on African zirconium–titanium projects. Internally, Shenghe promoted organizational integration, increased internal talent mobility, strengthened regional coordination mechanisms, and enhanced talent support systems.

The company emphasized continued reinforcement of compliance and risk management, establishing a comprehensive compliance framework. It also advanced digitalization and information systems to support intelligent command and scientific decision-making. Shenghe further stressed the importance of market capitalization management and proactive engagement with capital markets.

Chairman Xie Bing stated that the company must fully recognize both opportunities and challenges, rigorously assess strengths and weaknesses, strictly adhere to national industrial policy, and strengthen policy research and on-the-ground assessments. He emphasized addressing management and talent-development gaps, maintaining steady progress in rare earths, accelerating zirconium–titanium projects, rapidly advancing overseas assets, and opening a “second growth curve.”

The meeting also set out key priorities for 2026 and included the launch of an upgraded compliance management system, export control compliance training, and a ceremony recognizing outstanding teams, managers, and employees for 2025. Senior management, including Chairman Xie Bing, Vice Chairman and CEO Huang Ping, and Overseas Division Chairman Wang Quangen, attended.

REEx: What The Update Informs Investors

Three signals matter for rare earth watchers outside China:

1. Overseas Control Is Now Central, Not Peripheral. The explicit emphasis on Peak Rare Earths and control of Tanzania’s Ngualla project confirms Shenghe’s strategy of locking in upstream optionality offshore—especially in jurisdictions Western firms also view as diversification targets.
2. Compliance Language Is Not Accidental. The repeated references to export-control training and compliance frameworks reflect real pressure. Chinese rare earth firms now operate under tighter global scrutiny, and Shenghe is signaling readiness to operate within—and influence—those rules.
3. Zirconium–Titanium as a Second Growth Curve. Shenghe is openly positioning zirconium–titanium projects alongside rare earths, indicating a broader critical-minerals portfolio that could hedge rare earth price cycles while leveraging shared processing and logistics.

REEx Takeaway

This is not just an annual pep rally. Shenghe is consolidating overseas assets, professionalizing compliance, and broadening its mineral base—moves that reinforce China-linked influence across multiple critical mineral chains.

Disclosure & Verification Notice

This material includes a translation of company-issued content distributed via WeChat and state-affiliated channels. Statements reflect Shenghe Resources’ own reporting and should be independently verified.

• ICIJ investigation found that Chinese state-linked firms quietly assumed majority control of a rare-earth-rich mining concession in Malawi through two ownership transfers (2023-2025) without legally required government approval, prompting an official probe.
• The case illustrates how governance gaps, offshore structures, and weak regulatory oversight in frontier jurisdictions allow strategic rare earth assets to change hands before production begins—creating long-term supply chain leverage.
• For investors, ownership risk and regulatory transparency can matter more than geology: opaque control shifts threaten social license, stall projects, and concentrate downstream processing power even further.

Rare Earth Exchanges reviews an International Consortium of Investigative Journalists (ICIJ)-backed investigation (opens in a new tab) into ownership changes at a rare-earth–rich mining concession in Malawi. We separate verified facts from unresolved claims, assess governance risks, and explain why opaque control shifts in frontier jurisdictions matter for the global rare earth supply chain.

An investigation found that a major rare-earth mineral project in Malawi quietly changed hands, ending up under control of companies linked to the Chinese state—without the government’s required approval. Malawi is now investigating. For investors, the story is less about geology and more about governance, ownership risk, and who really controls future rare earth supply.

What the Investigation Found

Reporting by ICIJ partners (PIJ Malawi, Finance Uncovered, The Continent) alleges that entities linked to the Chinese state assumed majority control of Mawei Mining Company Ltd., holder of a heavy mineral sands concession near Lake Malawi. The deposit is believed to contain zircon, titanium, and monazite—an important source of rare earth elements.

The probe documents two ownership changes (2023–2025) at Mawei’s parent, Xinjin International Company Ltd. (BVI), culminating in majority control by Shandong Zhaojin Ruining Mining Industries and Hainan International Resources. Malawian officials acknowledged they were unaware of these changes, despite laws requiring notification and approval of beneficial ownership transfers.

Certified

Malawi law requires disclosure and approval of ownership changes; officials say they did not receive it. The government has launched a fact-finding exercise that could lead to fines or administrative action.

Unproven

Commercial viability, grades, timelines, and whether the ownership shift violated law remain to be determined by Malawi’s investigation. Claims of “350+ million tonnes” reflect estimates, not proven reserves.

REEx Investigates

Last month REEx reported the Malawi case is less about immediate rare earth supply and more about long-term control through governance gaps: Mawei Mining’s rare-earth-bearing heavy mineral sands deposit near Lake Malawi is geologically real but commercially dormant, with promised production timelines missed and no current output.

As the journalist consortia found, what did move was ownership—two quiet transfers between 2023 and 2025 consolidated control under Chinese state-linked firms without the legally required notification to Malawian authorities, prompting a belated government probe. REEx cautions against overstating this as instant “supply-chain capture”—there is no operating mine, no separation, no exports—but stresses the deeper pattern: weak registries, offshore structures, and under-resourced regulators enable governance arbitrage, allowing patient, state-backed capital to accumulate strategic optionality over decades. The takeaway for investors is clear: in rare earths, geology plus opacity can translate into leverage long before a single tonne is produced.

The Quiet Risk Investors Should Notice

As stated above, this is a governance story with supply-chain consequences. Rare earth projects in frontier jurisdictions often hinge on social license, regulatory clarity, and transparent ownership. When control shifts through offshore structures without oversight, projects stall, communities sour, and capital risk rises. The investigation also underscores how control of monazite-bearing sands—critical to downstream magnets—can change hands long before production begins.

Why This Matters for the Rare Earth Supply Chain

Global rare earth supply is already concentrated at the processing stage. If upstream assets are acquired through opaque pathways, downstream leverage only tightens. For Western manufacturers seeking diversification, ownership risk can be as decisive as geology.

REEx Takeaway: In rare earths, who owns the asset—and how—can matter more than what’s in the ground.

Source: Fergus Shiel, ICIJ partners (opens in a new tab), Feb. 3, 2026; Rare Earth Exchanges, Jan 24, 2026

• Investors are pouring capital into AI and data centers while dramatically underfunding the mines and processing plants that supply the critical minerals these technologies require, creating a dangerous mismatch.
• Mining investment has grown only marginally since 2015 despite soaring AI valuations, and with 10-20 year development timelines, today's underinvestment raises material supply shortage risks in the 2030s.
• Rare earths represent the bottleneck within the bottleneck—essential for EVs, wind turbines, data centers, and defense—yet processing remains highly concentrated as capital favors software over supply chains.

This Rare Earth Exchanges (REEx) analysis reviews “The Paradox of Visibility,” a 2026 white paper from Resource Capital Funds (opens in a new tab), which argues that capital markets are misallocating investment—overfunding artificial intelligence and digital infrastructure while underfunding the critical minerals those systems physically require. We assess what is well supported, where assumptions deserve caution, and why this imbalance matters for rare earth and critical mineral investors.

Overview

A new analysis argues investors are pouring money into AI and data centers while ignoring the mines and processing plants that supply the metals making those technologies work. This mismatch could create shortages, higher prices, and geopolitical risk—especially for rare earth elements.

What the Paper Gets Right

The paper’s central insight is hard to dispute: the digital economy is not abstract—it is material-intensive. AI, hyperscale data centers, electrification, and advanced manufacturing all depend on copper, rare earth elements, lithium, nickel, graphite, aluminum, and silver. These inputs are dictated by physics, not preference.

Resource Capital Funds documents how electricity demand from AI workloads and data centers could more than double by the early 2030s, driving unavoidable demand for copper-heavy grids, rare-earth-based motors, and battery systems—while global mining investment remains well below levels consistent with that growth.

Where the Evidence Is Strongest

The most persuasive section compares financial valuation versus physical investment. While leading AI and compute platforms have seen rapid valuation growth since 2015, capital spending by the world’s largest miners has grown only marginally over the same period.

Given 10–20-year mine development timelines, today’s underinvestment materially raises the risk of supply tightness in the 2030s.

The paper is also clear-eyed about alternatives: recycling, substitution, and efficiency gains help—but cannot resolve near-term deficits within policy-relevant timelines.

Where Investors Should Apply Judgment

The analysis leans toward a structural scarcity narrative. Directionally, that risk is real—but outcomes will vary by commodity, jurisdiction, and project stage. Policy reform, permitting acceleration, or price shocks could change timelines. Investors should read the paper as a risk framework, not a deterministic forecast.

Why This Matters for Rare Earths

Rare earths are the bottleneck within the bottleneck. High-performance magnets underpin EVs, wind turbines, data-center cooling, and defense systems, yet processing and separation remain highly concentrated. If capital continues to favor software over supply, rare earth scarcity will assert itself through price, policy, and geopolitics.

REEx Takeaway: The digital economy may feel weightless—but it runs on metal. A capital that ignores that reality risks funding the future while starving its foundation.

Source: Resource Capital Funds, The Paradox of Visibility (2026)

• Japan successfully retrieved rare-earth sediment from 6,000 meters depth near Minami Torishima—a technical first, but commercial viability remains unproven with no disclosed grades, costs, or recovery rates.
• The test is strategically significant for reducing Chinese supply dependence amid export controls, yet China still controls 90% of rare earth refining and two-thirds of mining globally.
• Deep-sea rare earth extraction faces substantial economic and environmental hurdles; this represents exploration and geopolitical signaling, not a near-term market-moving supply breakthrough.

What’s up with Japan’s deep-sea rare earth test recovery near MinamiTorishima? Rare Earth Exchanges™ separates genuine technicalprogress from optimistic reserve narratives. What is verifiable? What remains speculative? Why does this matters for investors tracking geopolitical risk and rare earth supply-chain resilience?

Japan has successfully retrieved rare-earth-bearing mud from 6,000 meters below the ocean surface in a first-of-its-kind test, aiming to reduce reliance on Chinese supplies. While the feat is technologically impressive and geopolitically meaningful, it does not yet change the global rare earth supply. Commercial, environmental, and cost hurdles remain substantial.

What Happened—and Why It Made Headlines

According to France 24 reporting (opens in a new tab) with AFP (Feb. 2, 2026), the Japanese government confirmed it recovered sediment containing rare earths from extreme depths during a test mission near Minami Torishima, a remote Pacific island within Japan’s exclusive economic zone. Officials described the recovery as a “meaningful achievement” for economic security and maritime development, noting that the sample will now be analyzed to determine mineral content and feasibility.

Japan claims this is the first successful deep-sea recovery at such depth, underscoring technical capability rather than commercial readiness.

What’s Solid—and What’s Still Aspirational

The technical achievement is real: retrieving sediment from 6,000 meters is non-trivial and places Japan among a very small group with such deep-ocean drilling capacity. However, claims about scale deserve caution. Estimates cited by Japanese media suggesting tens of millions of tons of rare earths—and centuries of dysprosium or yttrium supply—are geological in nature, not economically proven reserves. No grades, recovery rates, or costs have been disclosed.

Deep-sea mud is dilute, processing is complex, and environmental constraints are unresolved. This is exploration, not production, be sure.

The Geopolitical Subtext Investors Should Read Carefully

This move is less about near-term supply and more about strategic signaling. Japan remains acutely exposed to Chinese export controls, especially as Beijing has restricted “dual-use” materials amid rising regional tensions. Demonstrating an alternative—however distant—strengthens Japan’s negotiating posture and supportsallied narratives around supply diversification.

 Yet the economics matter: even optimistic scenarios place commercial deep-sea rare earth extraction many years away, with costs likely far above terrestrial mining and processing.

Why This Matters for the Rare Earth Supply Chain

For now, China still controls roughly two-thirds of mining and over 90% of refining. Japan’s test does not alter that reality. But it does highlight where future competition may emerge—and how supply-chain security increasingly intersects with ocean technology, environmental governance, and geopolitics.

REEx Takeaway: Impressive engineering, important diplomacy, but not a market-moving supply breakthrough.