Incoming Trump Administration-‘Drill Baby Drill’ is Not The Answer with Rare Earth Elements-Understand the Crisis to Solve the Problem

Highlights

• The US is the second-largest producer of rare earth elements, with current production sufficient to meet existing demand.
• Focus should shift from mining to developing downstream capabilities like magnet production and processing.
• Building a competitive rare earth supply chain requires collaboration between the government and the private sector to reduce dependency on China.

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Few may realize, other than insiders, that the United States is the second largest producer of rare earth elements (REEs (opens in a new tab)). Most of this output is shipped to China for value-added processing to finished magnets and consumer, industrial, and medical products.

REE magnetics expert John Ormerod, PhD (opens in a new tab), recently pointed out on LinkedIn, “So why is the narrative being sold that we need more mining and recovery of REEs in the US? Government.”

The Knoxville, Kentucky-based Principal of JOC, LLC points out that the investment should be targeting the downstream value chain and end-user industries.

In 2023 the US imported around 7000 MT of hashtag#NdFeB (opens in a new tab) magnets (https://dataweb.usitc.gov/ (opens in a new tab)).

Ormerod continues, “The 43,000 MT of REEs produced in the US is enough for more than twice the 2023 imports. So enough with “drill baby drill” rhetoric and prioritize the investment where it is needed (https://lnkd.in/ebAiiAnX) (opens in a new tab)).”

The rare earth metals expert argues that the rare earth supply chain, particularly for sintered NdFeB magnets, is focusing too much on mining when the real bottleneck lies in processing and production capabilities, most of which are dominated by China.

While there are numerous rare earth mining projects globally, the output from MP Materials and Lynas Rare Earths is sufficient to meet current and near-future demand for NdPr, the key component for magnets.

Instead of prioritizing mining, the focus should shift to developing capabilities outside China, including:

• Metallization
• High-performance magnet production
• Heavy rare earth processing for elements like Dy and Tb, which are critical for advanced magnets

To build a robust supply chain, efforts should concentrate on training skilled professionals, establishing advanced factories, reshoring industries that use these magnets, and creating integrated production facilities with scalable capacity.

The expert emphasizes that achieving this requires government and private sector collaboration within a compressed timeframe to avoid inefficiencies and dependency on China’s infrastructure.