The Elements of Innovation Discovered
The Elements of Innovation Discovered
Critical Minerals Alliances - August 7, 2025
U.S. military hardware, such as this F-22 Raptor flying a mission off the coast of Hawaii, is heavily reliant on rare earths.
Rare earth elements (REEs) have long been the quiet champions of modern technology, lending their unique and almost alchemistic properties to everything from electric vehicle motors and wind turbines to smartphones and fighter jets. Shifting supply chains and emerging trade wars are forcing Western nations to reckon with the geopolitical implications of relying on China for this suite of 17 technology metals.
While the United States, Australia, and others have chipped away at China's global rare earths monopoly over the past 15 years, the Middle Kingdom continues to dominate the sector.
According to the U.S. Geological Survey, China controls approximately 70% of global rare earths mining and 86% of the separation and refining of these tightly interlocked elements into the oxides and metals needed by the automotive, clean energy, high-tech, defense, and other sectors of the economy.
Beijing is wielding its near-monopoly over the production of finished rare earths as a weapon in its trade war with the U.S.
In response to President Donald Trump's tariffs on Chinese goods, Beijing announced that it is locking down the exports of seven REEs – dysprosium, gadolinium, lutetium, samarium, scandium, terbium, and yttrium – critical to aerospace, EV manufacturing, nuclear energy, and advanced weapons systems.
"This is a precision strike by China against Pentagon supply chains that enable our most powerful weapons and defense systems, from stealth fighters and precision-guided munitions to satellite systems and hypersonic weapons," said Mark Smith, CEO of NioCorp Developments, a company advancing a rare earths-enriched critical minerals project in Nebraska.
This precision strike, however, was not the trade war salvo that ultimately reshaped global supply chains. Instead, escalating tariffs began to break the links binding the U.S. to China, leading to new links being forged in the U.S. and Saudi Arabia that are poised to reshape the global rare earths landscape.
In a strategic move that is unprecedented in modern times, the U.S. Department of Defense entered into a multi-billion-dollar partnership with MP Materials, owner of the Mountain Pass rare earths mine in California's Mojave Desert, to establish a complete mine-to-magnets rare earth supply chain in the U.S.
"This initiative marks a decisive action by the Trump administration to accelerate American supply chain independence," said MP Materials Chairman and CEO James Litinsky.
Rare earths include the 15 lanthanide elements found near the bottom of the periodic table, plus scandium and yttrium.
Beijing's trade war weaponization of rare earths to precisely target U.S. military and high-tech supply chains was as unsurprising as it was alarming to manufacturers outside of China that rely on these rare earths.
"A number of policies have foreshadowed that REE export restrictions were on the horizon," Gracelin Baskaran, director of the Critical Minerals Security Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C., said.
This foreshadowing began in 2010, when China embargoed shipments of rare earths to Japan during a dispute over territorial claims in the South China Sea.
The slowdown of rare earths coming out of China at that time sent prices for these tech elements skyrocketing, spurring the exploration and development of rare earths projects around the world.
However, before most of these projects could get off the ground, China flooded the global market, creating a smorgasbord of distressed rare earth projects for Chinese companies to acquire or invest in – further solidifying the nation's control of supply.
A similar strategy began to unfold in 2023, when Beijing began leveraging its control over rare earths and other critical minerals as a weapon in an escalating tech and trade war with the U.S.
Over the ensuing two years, China has restricted or banned the exports of a growing list of critical minerals in response to U.S. trade policies and export restrictions on computer chip technologies.
See "Red Dragon guards critical minerals trove" on page 8 of Critical Minerals Alliances 2025.
Beijing's critical mineral restrictions included a late-2023 ban on the export of rare earth extraction and separation technologies, a strategic move to help ensure that it maintains control over the vital master link of rare earth supply chains, and another foreshadowing of the precision rare earths strike launched earlier this year.
Baskaran says the rare earth technologies export bans hobble the development of supply chains outside of China in two ways.
"First, China possesses specialized technical expertise in this field that other countries do not," she explained. "Second, while multiple facilities for separation, processing, and manufacturing are currently being built, completing construction and bringing them fully online will take several years."
Rare earth metal produced at MP Materials' Independence facility in Fort Worth, Texas.
While the U.S. and other Western nations have a long way to go before they can decouple their supply chains from China, escalating trade war tariffs, counter-tariffs, and export restrictions created an ideal geopolitical and economic environment to forge a more diversified rare earths supply chain.
Less than two weeks after China fired its tariff and rare earth restriction salvo in response to Trump's tariffs, MP Materials announced that it has ceased shipping rare earth concentrates produced at Mountain Pass to China for processing.
"Selling our valuable critical materials under 125% tariffs is neither commercially rational nor aligned with America's national interest," the company stated.
The decision to halt all Mountain Pass concentrates to China severed a key rare earths supply chain link between the countries.
While the revitalized Mountain Pass mine is the largest rare earths mine outside of China, producing roughly 12% of the global supply, a dearth of separation and processing capacity in the West left MP with essentially no alternative but to ship concentrates to China to be upgraded into the metals, magnets and other products needed for the automotive, high-tech, clean energy, defense, and other sectors of the economy.
This means that, despite having a major rare earth mine within its borders, the U.S. remains heavily reliant on China for rare earths and a long list of products that they are used in.
MP, however, has been scaling up a complete all-American mine-to-magnets rare earths supply chain.
"MP has invested nearly $1 billion to restore the full rare earth supply chain in the United States," the company stated. "Today, our California refinery is processing nearly half of our production, with virtually all of that material sold into markets outside China – including Japan, South Korea, and the United States."
This hefty investment in processing is beginning to pay off. In January, the company began producing neodymium-praseodymium (NdPr) metal – the primary ingredient in the rare-earth magnets used in EV motors, robots, smartphones, military hardware, medical imaging equipment, and a wide range of high-tech and everyday products – at its Independence plant in Fort Worth, Texas.
"This milestone marks a major step forward in restoring a fully integrated rare earth magnet supply chain in the United States," Litinsky said at the time.
Considering that neodymium and praseodymium are the two most sought-after rare earths, due in large part to the high demand being driven by EVs, refining domestically mined rare earths into metals that can be used in magnets is a major landmark along the path to establishing critical mineral supply chains independent of China.
"Mountain Pass is the foundation for a fully integrated rare earth supply chain in the United States," MP wrote in a LinkedIn post celebrating 75 years of production at the mine.
MP Materials' state-of-the-art Independence rare earth magnet manufacturing facility in Texas.
To build upon the solid foundation established by MP, the White House and Pentagon are making a multi-billion-dollar investment in expanding the company's mine-to-magnets supply chain and breaking America's dependence on China for the rare earths essential to the nation's security and economic well-being.
"The cavalry has arrived," said MP Materials Vice President of Corporate Affairs Matt Sloustcher.
Above and beyond the financial firepower needed to build out a robust and reliable supply chain, the cavalry came equipped with a strategy to establish a perimeter to protect the DOD-backed rare earth magnets supply chain being built by MP.
The financial firepower was delivered through a sophisticated and unprecedented public-private partnership, which includes a $400 million investment that establishes DOD as MP Materials' largest shareholder.
This direct investment, coupled with a $1 billion loan from JPMorgan Chase and Goldman Sachs, provides MP with funding to expand Independence and build 10X, an even larger rare earths magnets plant. Once the 10X Facility comes online, currently slated for 2028, MP will have the capacity to produce 10,000 metric tons of rare earth magnets per year.
The perimeter being established to protect this supply chain involves the Pentagon setting a floor price of $110 per kilogram for NdPr products stockpiled or sold by MP over the next 10 years. This will help ensure that MP's financial viability is not undermined by a flood of underpriced rare earths and magnets out of China.
To round off its commitment to ensuring the U.S. has a secure and reliable supply of the rare earths most vital to American industry and military readiness, DOD has loaned MP $150 million to expand heavy rare earth separation capacity at Mountain Pass.
Ashley Zumwalt-Forbes, a critical minerals analyst who previously served as the U.S. Deputy Director for Batteries and Critical Materials, hailed the deal between DOD and MP as an extremely sophisticated public-private structure that will help establish and protect a domestic rare earths supply chain.
"All the right levers are here: equity, debt, price floor, and offtake. A full-stack solution to scale a startup facility against a monopoly," said the Harvard Business School engineer who founded Smoketree Resources, a critical minerals investment firm.
President Trump and Saudi Crown Prince Mohammed bin Salman signed a $600 billion deal to strengthen economic and technological collaboration across key sectors during the U.S.-Saudi Investment Forum 2025 in Riyadh.
In addition to partnering with the Pentagon to build a robust rare earths supply chain in the U.S., MP has forged an alliance with Ma'aden – a Saudi state-owned mining company with the technical, financial, and geopolitical power to break China's rare earths monopoly.
During the U.S.-Saudi Investment Forum 2025 in Riyadh, MP and Ma'aden signed a memorandum of understanding (MOU) to explore the creation of a rare earths supply chain that connects MP's technical expertise with Ma'aden's Saudi mining acumen and the ambitions of an oil-rich nation seeking to diversify its economy.
"We aim to create a global hub for a fully integrated rare earth value chain supporting advanced manufacturing in the Kingdom," Ma'aden CEO Bob Wilt said upon the May signing of the MOU.
Ma'aden, the largest mining company in the Middle East and among the top ten globally, is focused on establishing mining as an important contributor to Saudi Arabia's future.
"We have committed to establishing mining as the third pillar of the Saudi economy, in line with Vision 2030," Wilt said.
Unveiled by the Saudi government in 2016, Vision 2030 is focused on diversifying the Middle Eastern nation's economy away from oil and improving the quality of life for its citizens.
With mining being a key facet of Vision 2030, Ma'aden is working alongside MP Materials to establish a rare earth supply chain that will support the Middle Eastern nation's high-tech manufacturing ambitions.
The envisioned mines-to-magnets supply chain will benefit from the competitive energy base, world-class infrastructure, strategic location, and financial wherewithal that Saudi Arabia has to offer.
"As we continue to build mining as the third pillar of the Saudi economy, this is an integral step in the exploration and development of minerals that will drive economic and industrial growth for the Kingdom," Wilt said.
While MP is a first mover and a significant player in the U.S. rare earths sector, it is not the only one building toward a fully integrated mines-to-magnets REE supply chain in North America.
Here is a rundown of some of the companies establishing rare earth mines, processing facilities, and magnet plants in the U.S. and Canada:
USA Rare Earth Director of Magnet Operations Bob Fredette with a rare earth magnet produced at the company's Innovations Lab in Oklahoma.
Energy Fuels – This uranium mining company has established a rare earths separation plant at its White Mesa Mill in Utah that is expected to produce all of the rare earths on China's rare earths export restriction list within a year.
NioCorp Developments Ltd. – The Export-Import Bank of the United States (EXIM) has invited NioCorp to apply for an $800 million loan to support the development of a mine and processing plant at Elk Creek, a project in Nebraska that would produce rare earths, niobium, scandium, and titanium.
Rare Element Resources Ltd. – Earlier this year, EXIM invited Rare Element Resources to apply for a $553 million loan to finalize permitting and construction of a rare earth mine and separation plant at Bear Lodge, a high-grade project in Wyoming that hosts 541 million lb of rare earths.
Saskatchewan Research Council – Toward the end of 2024, SRC poured the first rare earth metals at its Saskatoon processing facility. The pouring of 99.5% pure neodymium-praseodymium marked an important step in the evolution of the Saskatoon plant, which also processed and separated the rare earths that went into the metal.
Ucore Rare Metals Inc. – In May, DOD invested an additional $18.4 million to accelerate the commercialization of RapidSX, which is capable of separating rare earths nearly 10 times faster within one-third of the physical footprint than traditional solvent extraction methods. The company is installing this system at its Louisiana Strategic Metals Complex, a commercial-scale rare earths separation plant being developed in the U.S.
USA Rare Earths Inc. – After kicking off 2025 with the production of the first rare earth magnets at the plant it is building in Oklahoma, USA Rare Earths bolstered its ability to fund its envisioned mine-to-magnets rare earth supply chain. This value chain will include the Oklahoma magnet plant and a mine at Round Top, a world-class deposit in Texas that hosts rare earths, lithium, gallium, and five other metals critical to the U.S.
Vital Metals Ltd. – After rising to fame for being the operator of Canada's first rare earths mine at its Nechalacho project in Northwest Territories, Vital descended to infamy when it filed for bankruptcy and accepted a financial lifeline from China-based Shenghe Resources Holding Co. With Shenghe's backing, Vital is now advancing toward the development of a mine that better matches the world-class rare earths and niobium potential at Nechalacho to the global demand.
These initiatives, combined with MP's game-changing partnerships in the U.S. and Saudi Arabia, are redefining the rare earths landscape. Together, they mark the beginning of a diversified global supply chain that is no longer beholden to the whims of a single nation.
The foundation laid by Mountain Pass and reinforced by a multi-billion-dollar commitment from the Pentagon sends a signal that the U.S. rare earths supply chain is no longer a vision. It is being built with urgency, resilience, and intent.
With more than 17 years of covering mining, Shane is renowned for his insights and in-depth analysis of mining, mineral exploration, and technology metals.
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