An Open Letter to President Donald J. Trump: From Rare Earth Exchanges

Highlights

• The U.S. risks funding disconnected rare earth projects that cannot form a true supply chain without integrated feedstock, separation, metallurgy, and downstream qualification.
• Federal support must be tied to industrial maps answering who separates, who makes metals, who qualifies magnets, and what happens if China cuts off inputs tomorrow.
• America should prioritize choke points like heavy rare earth separation and metal making over headline-grabbing extraction announcements and investor presentations.
• Building allied supply-chain networks with Australia, Canada, Japan, and others is essential, as no nation can achieve complete self-sufficiency in the Great Powers Era 2.0.
• Breakthrough innovation—rare-earth-free magnets, advanced recycling, AI-driven materials discovery—should aim to leapfrog China rather than merely replicate its supply chain.

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Mr. President,

America has correctly identified one of the most important national security threats of our time: dependence on China for rare earth elements, critical minerals, pharmaceutical ingredients, advanced materials, and the industrial inputs required for defense, energy, semiconductors, artificial intelligence, and modern manufacturing.

But identifying the threat is not the same as defeating it.

The United States is spending serious money. The question is whether we are building an industrial system—or merely funding isolated projects, haphazardly in a reactionary mode in the same paradigm governing our last decades.

That distinction matters.

China did not dominate rare earths by financing one mine, one refinery, or one magnet plant. It built a complete ecosystem: mines, separation plants, metal makers, alloy producers, magnet manufacturers, technical universities, industrial laboratories, equipment suppliers, logistics networks, trading venues, pricing systems, and state-backed finance.

America cannot beat an ecosystem with press releases.

We need a serious course correction.

The current U.S. approach too often resembles fragmented industrial policy: capital goes to individual companies and high-profile announcements, while the connective tissue remains weak. A mine without an integrated feedstock strategy, separation capability, metallurgical know-how, customer qualification, and downstream offtake is not a supply chain. A magnet factory without reliable oxide, metal, alloy, and skilled labor inputs is not sovereignty. A grant without performance milestones is not strategy.

Recent rare earth investments illustrate the dilemma.

MP Materials has received major U.S. government support, including a Defense Department-backed package involving a $400 million equity investment and a $150 million loan tied to heavy rare earth separation and related supply chain expansion. That may be strategically important. But the core question remains: is heavy rare earth separation being built around secure, scalable, qualified feedstock—or around the assumption that capital alone can create integration? The company has publicly declared the problem will be solved, and we’re hoping that is the case.

None of these are trivial, small technical details. Heavy rare earths such as dysprosium and terbium are among the most critical choke points in the magnet supply chain worldwide. If feedstock, separation chemistry, permitting, waste handling, metallization, alloying, and magnet qualification are not synchronized, America may spend hundreds of millions and still remain dependent on foreign bottlenecks.

USA Rare Earth raises concerns. The company has attracted enormous capital and is pursuing a mine-to-magnet strategy involving mining, processing, metals, alloys, and magnets. They have made some intriguing acquisitions—both upstream and midstream. The ambition is necessary. And at the same time, ambition is not integration. The question is whether all of the pieces can be assembled in time, at commercial scale, with qualified feedstock, technical execution, customer acceptance, and cost discipline ready.

Yes, America should support strategic companies. And America should not confuse capital deployment with industrial capability. The consequences of getting this wrong are severe. If we continue funding disconnected assets and if, via acquisition and the like, they do not deliver in time, we risk creating stranded facilities, duplicated projects, politically favored winners, and expensive capacity that cannot operate competitively. Worse, we risk discovering during a crisis that we still lack the very choke-point capabilities we thought we had funded.

That would be more than an economic failure. It would be a national security disaster. The United States needs to consider alternative models in parallel.

First, federal support should be tied to integrated industrial maps, not isolated corporate narratives and speculative bets and financier wizardry. Every funded project should answer basic questions: Where does feedstock come from? Who separates it? And when do they separate it? Who converts oxides into metals? Where do they buy the chemicals? Who makes alloys? Who qualifies magnets? Who buys the product? What happens if China cuts off inputs tomorrow?

Second, America should prioritize choke points over headlines. Separation, heavy rare earth processing, metal making, alloy production, magnet manufacturing, and while we are on the topic, pharmaceutical precursors, specialty chemicals, and processing equipment are often more important than raw extraction volume.

Third, government capital should be performance-based. Companies receiving public support should be measured against production, qualification, delivery, cost, and customer milestones—not merely construction progress or investor presentations or, for that matter, support for investment bank-directed roll-ups.

Fourth, America should build industrial clusters including research and development hubs. Mines, refineries, metal plants, magnet facilities, laboratories, universities, workforce programs, and logistics networks must be co-located or operationally integrated and networked. Industrial power comes from ecosystems, not scattered assets. The litigation announced recently between two of the national giants is troubling, to say the least, and distracting from our true mission of resilience.

Fifth, the United States must work closely with allies and trusted partners. Australia, Canada, Japan, South Korea, Brazil, India, Europe, and nations across Africa and Southeast Asia each possess pieces of the industrial puzzle. The objective should not be isolation, protectionism, or a zero-sum scramble for resources. Rather, America should lead the formation of resilient, trusted supply-chain networks built on shared interests, mutual investment, and strategic redundancy. This includes supporting responsible resource development in regions such as Africa and Southeast Asia and exploring ways to assist those in Myanmar seeking a more stable and prosperous future amid the environmental, humanitarian, and governance challenges confronting the country. In the emerging Great Powers Era 2.0, no nation can achieve complete self-sufficiency; success will belong to those who build the strongest alliances and the most resilient industrial ecosystems.

Sixth, America must build transparent markets. Rare earths and critical minerals need trusted price discovery, digital marketplaces, audited inventories, Certificates of Analysis, and standardized contracts. Without market transparency, capital will continue to chase narratives instead of reality. While we understand the policy rationale behind Project Vault, we are not so sure that’s the optimal pathway forward. Rare Earth Exchanges® is investing to do its part driving transparency, insight, and connectivity, with no government money.

Seventh, America must pursue breakthrough innovation, not merely replication. Rather than spending decades trying to recreate China's rare earth supply chain piece by piece, the United States should focus on technologies that bypass or reduce strategic choke points altogether. Companies such as Niron Magnetics demonstrate this approach by developing permanent magnet technologies that could lessen dependence on rare earth inputs. America should invest aggressively in rare-earth-free magnets, advanced recycling, novel separation methods, substitute materials, AI-driven materials discovery, and next-generation manufacturing technologies. The goal should not simply be to catch China—it should be to leapfrog China.

Eighth, industrial policy must be inseparable from talent policy. China did not build industrial dominance with factories alone—it built an army of engineers, metallurgists, chemists, and manufacturing experts over decades. America faces a dangerous shortage of precisely these skills. A serious industrial strategy must rebuild technical education, expand apprenticeships, and aggressively recruit the world's best scientists, engineers, and entrepreneurs. MAGA should not mean closing the door to talent—it should mean making America the destination of choice for the best and brightest minds on Earth, including those willing to leave China and other competitors. The race for industrial leadership is ultimately a race for human capital, and the nation that attracts the smartest people wins.

This is the Rare Earth Exchanges® Great Powers Era 2.0 thesis.

The age of frictionless globalization is ending. Nations are no longer optimizing only for lowest cost. They are optimizing for resilience, industrial leverage, and strategic autonomy. China understands this. It has built not only production capacity, but market architecture.

America must now build its own.

Mr. President, the choice before the United States is clear.

We can continue scattering capital across disconnected projects and assets (some that may start litigating each other) and hope that a supply chain appears.

Or we can build a disciplined national industrial system around choke points, clusters, allied supply chains, performance accountability, and market transparency.

The first path produces headlines and bits and pieces of where we need to go, but we are afraid the outcomes will not materialize fast enough.

The second path produces power.

America still has the capital, innovation, entrepreneurial creative talent, flexibility and adaptability, and allied network to win. But we must stop mistaking subsidy for strategy and announcements for capability.

When opportunities become concentrated within a relatively small network of participants, there is a risk that scarce capital is allocated based on access and relationships rather than rigorous competition, technical merit, commercial viability, and strategic importance. The result can be delayed projects, higher costs, and the appearance of industrial progress without the integrated capabilities required to compete globally. Our concern is not that some companies, executives, or investors will succeed financially—many undoubtedly will—but that substantial wealth may be created while the nation's underlying strategic objectives remain only partially achieved, leaving critical dependencies and industrial vulnerabilities unresolved.

Respectfully,

Rare Earth Exchanges®

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