Heavy Rare Earths Expose 100% U.S. Import Reliance as Nearly $700 Million Targets Supply-Chain Independence

Highlights

• The U.S. produced zero commercial-scale heavy rare earth compounds in 2025, maintaining 100% net import reliance despite major government funding commitments.
• Terbium oxide prices surged from $812/kg to $1,010/kg in 2025, while China supplied 100% of U.S. terbium, holmium, and lutetium imports from 2021–2024.
• Nearly $700 million in U.S. government financing targets separation, refining, and recycling—but no domestic projects have yet demonstrated sustained industrial-scale production.
• Southeast Asia, particularly Malaysia and Vietnam, is emerging as a high-stakes battleground for heavy rare earth feedstock as a multiagency U.S. team pursues deal flow.
• China's April 2025 export controls on terbium and dysprosium remain in force, with a critical suspension expiration deadline of November 10, 2026 looming over U.S. supply chains.

America’s heavy rare earth problem (opens in a new tab) can be reduced to two numbers: 100% net import reliance and roughly $700 million in 2025 government financing commitments. The United States Geological Survey (USGS) reports that the United States still produced no sustained commercial-scale quantities of heavy rare earth compounds or metals in 2025, despite domestic mining and multiple processing projects. Terbium oxide prices jumped from $812/kg in 2024 to $1,010/kg in 2025, while U.S. net import reliance remained 100%.

REEx Insight — Money Has Arrived. Tonnes Haven’t

This is the distinction investors cannot afford to miss. Financing is not production. Washington committed $150 million for heavy-rare-earth separation at Mountain Pass, $80 million plus $5.1 million for recycling projects, and U.S. Development Finance Corporation (opens in a new tab) (DFC) approved $465 million for Brazil’s heavy-rare-earth-rich ionic-clay operation—about $700 million combined. The strategy is finally attacking the correct battlefield: separation, refining and recycling—not simply digging more ore. Yet we remain in the early innings of a long game. Any further ways to accelerate the timeline?

China’s Grip Remains

USGS shipping records (opens in a new tab) show China supplied 100% of U.S. terbium, holmium and lutetium compound-and-metal imports during 2021–2024. But claims that all European, Korean or Chilean supply ultimately originated in China go beyond what USGS establishes.

Meanwhile, China’s April 2025 controls on terbium, dysprosium and other rare earth products remained operative at year-end.

The race has therefore moved from capital announcements to qualified commercial tonnes. Plants must be commissioned, chemistry mastered, operators trained and customers qualified. That industrial clock moves far slower than Washington’s funding clock.

The Race for the Heavies: Money Meets the Industrial Clock

The race for heavy rare earth independence is now on—but America still has more contenders than proven winners. MP Materials has U.S. government backing for heavy-rare-earth separation at Mountain Pass, yet a critical question remains: can its roughly 4% SEG stream provide enough heavy-rich feed to meaningfully move the national needle, particularly against Washington’s compressed political and defense timelines? The Department of Defense (War) has committed to help the U.S.-based company source materials.

Energy Fuels is building dysprosium and terbium separation capability at White Mesa, but commercial-scale heavy separation is still a capability to be demonstrated, not assumed. USA Rare Earth has invested in France’s Carester, which is building a heavy-rare-earth separation and recycling facility, but Carester likewise has not yet demonstrated sustained industrial-scale production.

ReElement Technologies argues its chromatographic process could change the economics because dysprosium and terbium demand is measured in far smaller tonnes than NdPr—but even elegant separation technology needs feedstock. And that may be the real battlefield.

Serra Verde in Brazil helps explain USA Rare Earth’s proposed $2.8 billion acquisition, although REEx has reported operational questions involving boulders, water management and chemical processing—the kind of stubborn engineering realities that expose the gulf between the political clock and the industrial clock.

Yes, Malaysia and Southeast Asia are consequently attracting intense attention, including Southern Alliance Mining (opens in a new tab) (SGX: QNS), whose current rare-earth supply chain runs toward China. Rare Earth Exchanges® has called out Southeast Asia, particularly Malaysia as a Great Powers Era 2.0 battleground for feedstock. Yet remember Malaysia wants to move up the value chain--- but will its fragmented politics and policy allow the Southeast Asian nation to capitalize on the moment in history?

A Malaysian-American venture has established beachhead in Malaysia and is working on securing supply to send back to the Untied States. According to sources the company has secured an export license in Malaysia. But more information is needed to validate. According to a Malaysian website DTEC Mineral & Metal Technology Sdn. Bhd (opens in a new tab) (DTEC). is involved in critical-mineral and rare-earth ventures utilizing ionic clay feedstock. For its operations and export framework, the company relies on the Minerals and Geoscience Department Malaysia (Jabatan Mineral dan Geosains Malaysia - JMG (opens in a new tab)), where mineral export approvals and licenses are processed electronically through the eBMGPermit (Eksport Batuan dan Mineral Geosains) system.

Malaco Mining Sdn Bhd (opens in a new tab) is a Malaysian mineral exploration and mining company that handles extraction in sectors like iron ore, gold, and copper. It has drawn significant international attention for its major joint venture with French rare earth specialist Carester to develop a domestic rare earth elements supply chain and separation plant in that nation. Questions Rare Earth Exchanges is currently investigating is A) does Malco have an export license and B) do they have an active mine. Previously reported by Rare Earth Exchanges is the fact that there are over 60 illegal mines in operation in Malaysia.

Who are the U.S. players trying to secure Malaysia and overall southeast Asian supply? Brian Greely (opens in a new tab), Senior Vice President and Chief Banking Officer The Export-Import Bank of the United States (EXIM) (official export credit agency of the United States) and David Copley (opens in a new tab) a critical mineral lead (former mining executive and Naval Reserve Officer) for the National Security Council. Clearly Malaysia and all of southeast Asia becomes a high stakes situation. The admin has put together a multiagency team to drive deal flow. OSC is headed David Lotch (opens in a new tab), Director of the Office of Strategic Capital awhile International Development Finance Corp (DFC) is spearheaded by Ben Black. A key private equity group injected into deal flow by the U.S. government is Orion Resource Partners LP (opens in a new tab) as well as other private equity groups.

Laos, rich in heavy rare earth deposits, according to our Washington sources suggest China’s fully controlling deal flow in that southeast Asian nation. Vietnam does represent a location with potential for deal flow.

Africa and Australia hold additional possibilities, but few projects appear ready to solve the immediate problem. Back home, Missouri’s Pea Ridge is increasingly intriguing. And Caldera Holding (opens in a new tab), with its position around that historic deposit, could prove a sleeper as was explained on our Rare Earth Exchanges podcast on (opens in a new tab). The emerging lesson is uncomfortable but simple: separation technology is only half the race. Whoever secures scalable, heavy-rich, non-Chinese feedstock may ultimately control the starting gun.

Much is at stake for the small circle of policymakers now shaping America’s critical-minerals strategy inside the Beltway. Many of the key diplomatic and national-security threads converge around Secretary of State Marco Rubio, while Commerce Secretary Howard Lutnick has emerged as another powerful force, helping drive parallel industrial-policy interventions—including the controversial federal involvement with USA Rare Earth. Of course the deal involving Cantor Fitzgerald, Lutnick’s ex firm (with son’s currently at top positions) has caught attention of Democrats.

For the past year and a half, Rare Earth Exchanges has warned that this is not an abstract 2030 supply-chain problem. The clock is already ticking toward November 10, 2026, when China’s one-year suspension of its October 2025 rare-earth export controls is scheduled to expire. That makes any high-level U.S.-China negotiations this fall potentially consequential. Without an agreement—or another extension that keeps critical rare-earth materials and magnets moving—the consequences could travel quickly from diplomatic conference rooms to American factory floors. Already the chatter suggests in the defense sector slowdowns could be imminent. But that is not validated so should be understood as not conclusive. Industries dependent on Chinese-controlled rare-earth supply chains could face tightening inventories, production slowdowns and, in the most exposed cases, potential line stoppages. The political clock is approaching midnight; the industrial clock cannot simply be reset.

With all the people, promises and capital now swirling in and out of Washington (including the event on Friday August 7, 2026), the time for studying the problem is over. America must put the pedal to the metal—securing the critical metals, processing capacity and industrial know-how needed to rebuild its manufacturing base before geopolitical deadlines collide with industrial reality.