Key facts
- The US will rely on imports for nearly a quarter of its rare earth demand within five years.
- The US processes hardly any heavy rare earths used in military applications.
- MP Materials began delivering magnets made from its own refined rare earths to General Motors.
- USA Rare Earth acquired a Brazilian mine and a French processing plant.
- Energy Fuels agreed to buy a company with a major magnet facility in South Carolina.
- Nth Cycle signed a $1 billion supply agreement with Glencore.
The US will continue to depend on China for rare earths well into the 2030s, despite significant investments in domestic mining and processing facilities. This reliance presents a challenge for President Donald Trump as he prepares to meet with Chinese President Xi Jinping.
While US output of the two most common rare earths has more than tripled since Trump took office, the country can only meet 42% of its demand. Projections indicate that within five years, the US will still need to import nearly a quarter of its demand, according to Benchmark Mineral Intelligence. The US also processes very little of the heavy rare earths crucial for military applications, though output is expected to rise by 2031.
China, the world's leading producer and refiner of rare earths, has agreed to postpone export restrictions until November 10, a topic expected to be on the agenda for the leaders' meeting. The US goal of blocking Chinese rare earth imports by January 2027 appears increasingly unattainable.
Analysts suggest the US objective is not to replace China as the dominant global supplier but to establish a viable alternative supply chain for strategic sectors during geopolitical disruptions. Investments totaling billions of dollars have been directed towards companies like MP Materials, USA Rare Earth, and Energy Fuels to reduce China's influence.
Despite progress, such as MP Materials delivering magnets to General Motors and USA Rare Earth's acquisitions, the complexity of separating the 17 rare earth elements makes building a complete value chain difficult for Western countries. Startups are exploring new refining methods, and companies like Nth Cycle have secured significant supply agreements.