Highlights
- China dominates heavy rare earth processing with a 99% share.
- Recently, China has imposed export controls, severely impacting Western defense technology and military capabilities.
- Currently, Lynas Malaysia is the only producer of separated heavy rare earth oxides outside China.
- There are limited global alternatives under development, expected through 2025-2027.
- Western nations are pursuing multi-pronged strategies to mitigate heavy rare earth supply risks, including:
- Stockpiling
- Recycling
- International partnerships
- Domestic investment
Heavy rare earths (HREEs) – notably dysprosium (Dy), terbium (Tb), and related elements – are critical for advanced defense technologies (high-performance magnets, lasers, etc.). China dominates HREE mining and processing (~99% of global processing), and on April 4, 2025, imposed export controls on seven REEs, including Sm, Gd, Tb, Dy, Lu, Sc, and Y, and permanent magnets used in defense. These curbs – requiring export licenses for key HREEs – underscore U.S. vulnerability. Western producers and governments are racing to develop alternate sources and mitigation strategies with virtually no integrated heavy-REE supply chains outside China.
Current Non-China Heavy REE Production
Below is a summary of the current state of heavy rare earth (HREE) production around the world (Ex-China).
- Lynas Malaysia (Malaysia)– In May 2025 as reported by Rare Earth Exchanges (REEx), Lynas became the first company outside China to commercially produce dysprosium oxide, a key heavy rare earth element (HREE) [_mining.com_]. Fed by ore from the Mt. Weld mine in Australia, the Malaysian facility now separates up to 1,500 tonnes per year of HREEs, including both dysprosium and terbium, as cited in multiple media, including Mining.com (opens in a new tab). Terbium production began in June 2025. While this milestone breaks China’s near-total monopoly—previously accounting for 99% of global heavy REE processing-the facility’s output remains limited due to Mt. Weld’s relatively low HREE content and still covers only a small fraction of global demand.
- Mountain Pass (USA)–The only rare earth mine operating in the United States, Mountain Pass produces about 15% of global rare earth concentrate, primarily light REEs like neodymium and praseodymium. MP Materials is building a domestic processing facility to refine mixed REO, including a heavy-REE concentrate stream, but it has not yet conducted in-country separation of Dy or Tb. Company leadership acknowledges that China still dominates heavy REE separation and says it is working “expeditiously” to close that gap [_columbian.com_]. A Texas-based magnet plant is also in development to use U.S.-refined rare earths.
- Serra Verde (Brazil)–This monazite mine is one of the only active operations outside China (and Southeast Asia) producing REE ore with both light and heavy elements cited by multiple media including Reuters. However, all of Serra Verde’s output is exported to China for processing, meaning that while the ore contains valuable HREEs, Brazil currently lacks the infrastructure to refine or supply separated heavy oxides domestically.
- Myanmar/Laos/Vietnam (Southeast Asia)–This region hosts large ion-adsorption clay deposits rich in HREEs like dysprosium and terbium, according to multiple sources. Chinese firms currently dominate development in Myanmar, with some activity in Laos and Cambodia. A Canadian-led joint venture is working to restart a long-dormant refinery in Laos (3,000 t/y capacity), but as of now, it has not begun operations. Vietnam has significant HREE reserves, particularly at Nam Xe and Dong Pao, but despite early agreements with Japan over a decade ago, little production has materialized [_argusmedia.com_]. Overall, no meaningful HREE supply is reaching the global market from these countries outside of Chinese-controlled channels.
- Other Global Sources–Elsewhere, HREE production is negligible. India and Australia’s known REE mines (excluding Mt. Weld’s light-leaning ore) do not currently yield significant heavy REEs. African and European deposits such as Steenkampskraal (South Africa) and Lovozero (Russia) remain undeveloped or small-scale. Greenland’s Kvanefjeld deposit contains large quantities of Dy and Tb—potentially enough to meet 15% of global REE demand [mining.com]—but a national uranium mining ban blocks its development. However, this policy could change in the future.
Bottom Line
As of mid-2025, Lynas Malaysia is the only commercial source of separated heavy rare earth oxides outside China. All other operations either export ore to China or are in early development. Western-aligned countries remain heavily dependent on Chinese HREE processing, particularly for defense-critical elements like dysprosium and terbium.
Emerging HREE Mining Prospects
- Vietnam: South Korean firm Trident (with Vietnam’s Hung Hai) will develop the massive Lai Chau deposits (Bac Nam Xe, Nam Xe, Dong Pao) which contain several million tonnes of REO reserves according to Vietnam Investment Review (opens in a new tab). These are ion-adsorption clays rich in heavy and light REEs. Mining and processing are slated to start around 2025. Trident’s CEO notes the importance of defense and electronics. If realized, these sites could yield substantial Dy/Tb, though exact grades aren’t public; they are the largest known REE resources in Vietnam.
- Laos: Canada Rare Earth Corp (opens in a new tab). is moving ahead on Laos deposits. An IOC mining project is being developed alongside a 3,000 t/y refinery (70% stake purchase) near Vientiane. Laos’ clays are “especially rich in heavy REEs, such as dysprosium and terbium”. The refinery (previously built but mothballed) is due online in late 2025. This could be the first significant HREE production in Laos, though Chinese firms (e.g., Chijin Xiawu, Xiamen Tungsten) are also acquiring Laotian RE assets. Canadian involvement and government backing offer some diversification.
- Australia (Browns Range): Northern Minerals’ Browns Range deposit (WA) has an exceptionally high heavy REE grade (∼87% HREO) reports Northern Minerals. After earlier financial problems, Northern Minerals raised $43m in Sept 2024 to advance Browns Range, according to Tiger Trade (opens in a new tab). itiger.com (opens in a new tab). A pilot exists, and expansion is planned. If full-scale production begins (targeting the late 2020s), it will yield mostly Dy/Tb from xenotime ore. This is one of the few pure-HREE mines under development. (By contrast, Mt Weld in Australia is mostly NdPr.)
- South Africa (Steenkampskraal): The Steenkampskraal monazite deposit is one of the world’s richest REE ore deposits, with a 14% total REE grade cited by media around the world, such as Arab News (opens in a new tab), and 13–14% dysprosium/terbium by mass according to the mine itself (opens in a new tab).
- USA (new projects): Two U.S. juniors are pursuing heavy-REE deposits: NioCorp’s Elk Creek (Nebraska) and U.S. Critical Materials’ (Montana). Both tout abundant HREE in their order. The U.S. government is pressuring new domestic HREE mines (Trump and Congress have pushed executive orders and permits to “make our heavy rare earths,” reports The Columbian (opens in a new tab). However, both projects still need financing and permits; production remains several years off if it happens.
- Greenland (Kvanefjeld): If Greenland’s new government repeals the uranium ban, the Kvanefjeld mine (Greenland Minerals) could proceed according to Kvanefjeld license holder Energy Transition Minerals (opens in a new tab). It is among the largest REE deposits globally (contains Nd, Dy, Tb). The CEO claims it could supply ~15% of world REE demand as reported in Mining.com (opens in a new tab). But local opposition and legal uncertainty make timing very uncertain.
Summary
No heavy-REE mine outside China is currently supplying market-ready product although Lynas Rare Earths made their first announcement as to a start.
Several projects (Vietnam, Laos, Browns Range, Steenkampskraal) could begin production in the mid-to-late 2020s, but total output will likely be modest for years. Meanwhile, U.S. production from existing sources (Mountain Pass) is limited to light REEs, so defense-critical HREEs remain nearly 100% Chinese-controlled today, as reiterated by CSIS (opens in a new tab) and in media such as The Columbian (opens in a new tab).
Midstream Processing (Refining and Separation) Outside China
Even where HREE ores or concentrates exist, the critical bottleneck is processing. Historically, all large-scale HREE separation has been in China. Recently, a number of Western companies have started or announced rare-earth processing projects:
- Lynas Malaysia (Malaysia) – Operational facility producing separated oxides of Dy and soon. In 2025, Lynas confirmed its Malaysian advanced materials plant has become “the first producer of heavy rare earths outside of China,” as cited in REEx. The new heavy-REE circuit (commissioned Q1 2025) can separate up to 1,500 t/yr of heavy REEs.
Lynas’ Malaysian refinery has begun producing dysprosium oxide, giving non-Chinese customers a first source of HREE outside China. Japan, the U.S. and Europe are already engaging Lynas for Dy/Tb supplies as cited in multiple media including Mining.com
- MP Materials (USA) – Building the U.S.’s first rare-earth refinery at Mountain Pass. After two years of construction, the new separation plant was about to begin commissioning (as of late 2023). Initially it will separate Nd, Pr, La, Ce (from Mountain Pass ore), producing a heavy-rare-earth concentrate reports Argus Media. A second MP facility in Texas will produce metal/alloys and magnets. Once fully online (targeted by ~2025-2026), MP will be the first U.S. domestic supplier of purified RE oxides without shipping to China (opens in a new tab). The heavy-REE concentrate phase will still require subsequent separation; MP says it is “working expeditiously” to handle Dy/Tb in-country.
The table below was used by Argus Media (opens in a new tab):
| Producer | Location | Production | Refined Rare |
|---|---|---|---|
| American Resources | Noblesville, Indiana, US | In development, refining achieved at validation facility | Terbium (Tb), Dysprosium (Dy), Neodymium (Nd), Praseodymium (Pr) |
| Lynas Corp. | Kuantan, Malaysia; Kalgoorlie, Australia; Texas, US | Operational (Malaysia, Australia); In development (Texas) | Dy, Tb, NdPr, Samarium (Sm), Europium (Eu), Gadolinium (Gd), Holmium (Ho) |
| Phoenix Tailings* | Burlington, MA US | Operational (heavy and light rare earth metals) | Dy, Tb, NdPr |
| Rare Elements Resources | Upton, Wyoming, US | Demonstration of plant operational | Light and heavy REs |
| Energy Resources | White Mesa Mill, Utah, US | Operational, Phase 1 commissioned | NdPr; Dy, Tb to come |
| Ucore Rare Metals | Kingston, ON, Canada; Alexandria, Louisiana, US | Demonstration plant operational; Louisiana facility planned for 2025 start | NdPr; Dy, Tb to come |
| Aclara Resources | Goiás, Brazil; Bio-Bio, Chile; US (separation plant) | In development | Heavy REs (Dy, Tb); NdPr in US |
| Ionic Rare Earths | Belfast, UK; Minas Gerais, Brazil | In development | Recycled oxides (e.g., NdPr, Dy, Tb) |
| Pensana Plc | Saltend, UK; Longonjo, Angola | Under construction | Mixed RE carbonate, magnet metals (NdPr, Dy, Tb) |
| Saskatchewan Research Council (SRC) | Saskatchewan, Canada | Operational (commercial scale) | NdPr |
| Iluka Resources | Eneabba, Western Australia | Under construction | RE oxides |
| Solvay | La Rochelle, France | Operational; capacity expansion in 2025 | Nd/NdPr to come |
| Less Common Metals | Ellesmere Port, Cheshire, UK | Operational; Nd/NdPr capacity expansion ongoing | Nd, NdPr, Dy, Ferro-Dysprosium (DyFe), Tb, Samarium-Cobalt (SmCo) alloy |
| LKAB | Lulea, Sweden | The demonstration plant planned to start operations by end 2026 | RE Oxides |
| Carester | Lacq, France | Production planned for 2026 | Heavy REs (Dy, Tb) |
| MP Materials | Las Vegas, NV (HQ); Mt Pass California; Fort Worth, Texas, US | Mountain Pass operational, Fort Worth in commissioning | NdPr, cerium, lanthanum and heavy rare earth concentrate; metals, alloys and finished magnets at Fort Worth |
| Rainbow Rare Earths | Lakeland, FL, US | Separation pilot plant in testing | Nd and Pr initially; Dy, Tb, then Sm, Eu, Gd in future development |
| Australian Strategic Materials | Ochang, South Korea | Operational | Nd metal and alloy |
| USA Rare Earth** | Stillwater, OK, US | In Development | Heavy rare earths |
| Neo Performance Materials | Toronto, Canada, Estonia, | Operational | NdPr |
| Mkango Resources | Pulawy, Poland | Separation plant planned | NdPr oxide, heavy REs |
| REEtec | Oslo, Norway | Commercial plant planned for 2025 | NdPr |
*recycle tech—early stages
**mine-to-magnet focusing onsmall-to-mid-market
***note included is Brazilian Rare Earths (opens in a new tab)—although early state the Australian publicly traded mining company has a large and rich supply of REEs. Situated near a port and a petroleum refining complex in northeast Brazil, they score well on the REEx Ranking Index despite being early stage.
Recycling initiatives
Several ventures aim to recover REEs from scrap (avoiding mining). Ionic Rare Earths (UK) is building facilities to recycle NdFeB magnets into NdPr and DyTb oxide feedstocks.
As reported by REEx, in the U.S., the DoD awarded REEcycle $5.1M to restart an East Coast plant recovering Nd, Pr, Dy, Tb from electronic waste. REEcycle’s process reportedly recovers >98% of the magnet REEs, potentially yielding ~50 t/yr of oxides. Such recycling could eventually supply niche amounts of HREEs (critical elements in defense magnets) and reduce waste.
Founded in 2019, Phoenix Tailings is a company that specializes in recycling rare earth metals from mining waste, also known as tailings. Their process uses a sustainable approach to extract rare earth elements like neodymium (opens in a new tab) and dysprosium (opens in a new tab) from tailings without the use of traditional harmful mining methods.
Despite these efforts, processing capacity remains small. Outside China (and modest Vietnam/Korea plants), total HREE refining in 2024 was negligible. Lynas Malaysia produces only a few hundred tonnes of Dy/Tb oxides per year (1,500 t/y capacity) – tiny compared to Chinese output (tens of thousands of tonnes).
Most new processing projects are planned for 2025–27, just now coming online. It will take years for them to supply significant volumes.
Implications for Western Defense Supply
China’s near-monopoly on HREEs means Western defense procurement is quite vulnerable. Chinese export controls on Tb/Dy and defense-grade magnets (April 2025) directly targeted military supply chains. U.S. defense platforms are heavy rare-earth consumers (the F-35 fighter contains ~900 lb. of REEs; an Arleigh Burke destroyer ~5,200 lb.; a Virginia-class sub ~9,200 lb. according to CSIS (opens in a new tab)).
If Chinese shipments pause or stop, alternatives are scant. Industry analysts estimate global stockpiles can only “sustain demand for now,” with shortages likely later in 2025, as cited by multiple media outlets, including REEx.
The U.S. National Defense Stockpile holds some rare earth inventories, but not nearly enough for prolonged industrial or military needs or so goes reports. Perhaps the U.S. government has stashed more than many assume?
Western HREE projects will eventually help, but are years from scale. For example, U.S. Critical Materials’ work in Montana or Northern Minerals’ Browns Range will not produce Dy/Tb until late-decade at best. The combined output from all non-Chinese sources (new and planned) will likely cover only a fraction of U.S./Western defense needs for several years which is quite contrary to many upbeat investment decks or much of the mainstream media.
Consequently, the immediate effect of China’s controls is a scramble for any non-Chinese supply. Japanese and South Korean processors, for instance, have inquired about alternative Dy/Tb sources (including Lynas Malaysia). European firms are similarly seeking new suppliers.
Without immediate mine output, strategies focus on risk mitigation from 1) Stockpiling & Inventories; 2) Recycling & Reclamation; 3) International Partnerships—e.g., ‘friendshoring and 4) Domestic Investment & Substitution, where and when possible.
| Risk Mitigation Measures | Summary |
|---|---|
| Stockpiling & Inventories | Governments and contractors have begun bolstering stockpiles of critical REEs. As one analyst notes, current inventories suffice only temporarily. The U.S. is reviewing and expanding its Rare Earth Stockpile under recent defense authorizations. However, ramping stockpiles is slow and costly, and large-scale stockpiling of HREE is constrained by budget and processing capacity. |
| Recycling and Reclamation | There is renewed emphasis on recycling REEs from end-of-life magnets and electronics. Programs (many DOD-funded) aim to recover Nd, Pr, Dy, Tb from U.S. scrap streams. For example, REEcycle’s plant (Title III funding) plans 50 t/yr capacity of recovered NdFeB magnet oxides. In addition, companies in Europe and North America are partnering with OEMs (automotive electronics) to collect and recycle magnets. While recycling cannot yet meet large demand, it provides a steady secondary stream of HREEs (and underscores design for recyclability). |
| International Partnerships (“Friend-Shoring”) | Western governments are actively enlisting allies as alternative suppliers. Under the U.S. Defense Production Act, Australia, Canada and the UK are designated “friendly” sources. The U.S. has extended financing support to Australian projects (up to $850 M for Lynas and Iluka) and is negotiating trade arrangements. Multilateral initiatives, such as the Quad (US-Japan-India-Australia (opens in a new tab)), have highlighted critical minerals cooperation. The recent Quad Leaders’ joint declaration celebrated a Quad Investors Network deal linking an Australian company (RZ Resources (opens in a new tab)) with US, Japanese, and Indian partners to develop REE supply chains (QUAD Investors Network (opens in a new tab)). Bilaterally, countries like Japan, South Korea and India are investing in Vietnamese and Australian projects. For example, Japan’s JOGMEC has technical ties to the Indonesia/Japan/Taroko REE project, and Korean firms are in Vietnam (Trident) and Laos. Such alliances diversify risk and pool capital, but the physical resources (mines, plants) still need development. |
| Domestic Investment & Substitution | Western governments are boosting domestic mining and processing via grants, loans, and regulatory streamlining. The U.S. Defense Dept has committed hundreds of millions (over $439M since 2020) to mine-to-magnet projects. New permitting orders (e.g., President Trump’s 2025 executive order) aim to accelerate mining approvals. Simultaneously, defense labs and academia are exploring materials substitutions (e.g., SmCo magnets or reducing Dy content by new alloy/additive designs). These efforts are longer-term R&D with uncertain payoff; for now, the focus remains on securing actual Dy/Tb supply. |
Outlook
In the next 2–3 years, global HREE supply outside China will edge upward but remain tight due to the time it takes for many of the projects and programs to unfold.
Lynas’s Malaysia plant is now supplying some Dy/Tb, and projects like Browns Range and Steenkampskraal could add~100–200 t/y Dy/Tb each if all go forward. Butthis involves considerable assumptions.
Emerging separation plants (Carester France, USA Rare Earth, etc.) may deliver refined HREE oxides by 2026–27. The U.S. aims for a mine-to-magnet chain by as early as 2026, according to Joshua Ballard, CEO of USA Rare Earth. The CEO shared with REEx podcast (opens in a new tab) that the firm will remain targeted, focusing on small-to-midmarket customers.
But much of the planned capacity will still be nascent. Defense consumers should thus expect continued reliance on stockpiles and allied deliveries in the short run, with gradual import substitution by the late 2020s. In particular, heavy REEs like Tb and Dy will remain the critical choke points until multi-thousand-ton capacity from new projects comes online.
REEx anticipates an ex-China boom in the next few years as explorers, mines, processors, financiers, and metals traders jump in and structure deals (opens in a new tab).
REEx has reported on “ex-China” movements such as the deal between Traxsy and Arafura, but this is the first for light REEs. Many more will be announced, but any material outcomes will take time.
As we have discussed at REEx, President Trump will likely need to do a creative deal with China to open up access to these mission-critical HREE inputs over the short run. While in parallel, intensifying resilience efforts by hopefully initiating critical mineral industrial policy, naming a Critical Minerals Czar, and focusing on a longer-term supply chain resilience—based heavily on traditional alliances (Five Eyes, NATO) plus other partners in the Middle East, Brazil, in Africa, and the like.
Strategy Recommendations
Department of Defense ecosystem participants will need to embrace a series of strategic initiatives to navigate the current crises. As partially referenced above, a key will be to 1) Expand Alliances & Trade; 2) Accelerate Domestic Processing (where and when feasible); 3) Intensify Recycling Programs; 4) Maintain & Bolster Stockpile; 5) Accelerate Permitting for Key Mines; 6) Monitor China for ongoing Controls and 7) Lobby the Trump Administration to bolster and formulate a friendly Networked Industrial Policy.
| Recommendation | Description | Grade |
|---|---|---|
| Expand Alliances & Trade | Encourage allied mining/processing (e.g., Quad, EU-U.S., U.S.-Japan) and formal supply agreements. For instance, intergovernmental accords (like the Canada-Australia Memorandum (opens in a new tab)) foster joint development and investment safeguards. Export restrictions by China increase the strategic value of “friend-shoring” rare-earth projects and of free trade of critical minerals within alliances | Unfortunately, REEx suggests Trump administration to date has scored a low grade on this front. The unilateral tariff war was shortsighted in many ways. We need traditional USA allies to be ready to role in deepened collaboration—E.g., Canada, etc. President Trump needs to adjust, and pivot on this front. |
| Accelerate Domestic Processing | Prioritize funding and regulatory approval for HREE-specific separation plants. The DOD and DOE should continue Title III investments (opens in a new tab) (as with REEcycle and MP Materials) to jump-start commercial heavy-REE refining. Tax incentives or public-private partnerships could similarly support heavy-REE downstream ventures —Dy, Tb alloys, magnets) within NATO countries. | While rare earth industry experts inform REEx that the Trump administration has definitely accelerated awareness and imminence concerning rare earth deficits, we believe due to Chinese state’s monopoly of HREE more must be done on processing front—a Critical Mineral Czar should be named as a command and control, coordination function—to ensure more efficiency and accelerated results. |
| Intensifying Recycling Programs | Scale up magnet-recycling initiatives. Industry and government should expand collection of end-of-life NdFeB magnets (e.g., from obsolete missiles, turbines) and support commercialization of processes to recover Dy/Tb. Grants and subsidies may be needed until recycled HREEs can compete on price. This reduces reliance on virgin mining and stretches current stockpiles | To accelerate HREE recycling and reduce dependence on China, the US and DOD could launch a DARPA-style Rare Earth Recycling Accelerator focused on solvent-free and biometallurgical innovations; mandate “design for disassembly” in defense procurement to ensure magnet recoverability; and establish a Strategic Recycling Reserve of HREEs sourced from e-waste and decommissioned systems, managed by the Defense Logistics Agency. Use the Defense Production Act to onshore automated recycling capacity with tax incentives and offtake guarantees, while a federal buyback program should offer above-market rates for NdFeB magnets and scrap to drive collection. National labs must prioritize breakthrough IP in Dy, Tb, and Ho separation, converting it into dual-use tech. And the U.S. should lead an allied urban mining pact with Japan, South Korea, and the EU to share infrastructure and build a resilient recycled HREE supply chain. |
| Targeted Stockpiles | Maintain strategic reserves of Dy, Tb, and samarium (used in SmCo magnets) specifically, not just Nd/Pr. The U.S. National Defense Stockpile and allied equivalents should review and increase minimum holdings of HREE oxides. Emergency stockpiles can buy some time during supply disruptions. | To build a resilient strategic stockpile of HREEs the DoD must move beyond passive oxide storage and adopt a dynamic, multi-pronged strategy. Such as rotating materials through active supply chains, securing long-term offtake agreements with allied producers, and banking HREEs at certified recyclers for rapid deployment. The DoD should also stockpile finished alloys and magnets, pilot digital token systems for traceable reserve transfers, decentralize storage in hardened regional depots, and launch a reverse logistics unit to recover HREEs from retired assets. Together, these steps shift the U.S. toward true strategic material sovereignty. |
| Accelerated Permitting for Key Mines | Expedite environmental reviews and community negotiations for advanced heavy-REE projects (e.g., Northern Minerals, Steenkampskraal, NioCorp). Delays in lifting Greenland’s uranium ban or in approving U.S. projects must be resolved urgently. Streamlined processes (with strong safeguards) can significantly advance domestic HREE output. | Again, Trump’s executive orders and 232 action are important moves. The formation of formal critical mineral industrial policy—with embrace of mine to magnet supply chain acceleration seems a critical move. Again, the Critical Minerals Czar and associated move to rationalize and optimize the system seems imperative. |
| Monitor Chinese Controls | Maintain diplomatic pressure and WTO challenges if China’s export restrictions breach trade rules. Meanwhile, intelligence on Chinese “weaponization” of REEs should inform U.S. allocation policies (e.g., Defense priorities for limited shipments, CFIUS-style review of foreign REE ventures). | Much like response to COVID-19 the Chinese export controls involving HREE for military application are very serious. The USA should establish a real-time Rare Earth Early Warning System—a fusion of trade surveillance, satellite tracking of Chinese port activity, and customs data analytics—to detect shifts in export behavior. Simultaneously, launch a Rare Earth Countermeasure Fund to rapidly deploy capital toward allied projects when China tightens supply, and require REE contingency planning in all major defense and industrial contracts. What about exploring covert forward contracting through third-country intermediaries to bypass chokepoints while building strategic reserves under commercial cover? Of course, China has threatened any countries that participate in this latter scenario. |
Note included above is the need for a comprehensive critical mineral industrial policy in the United States.
A comprehensive U.S. critical mineral industrial policy would establish a centralized, cabinet-level Critical Mineral Czar empowered to coordinate all federal efforts across mining, processing, recycling, trade, and defense procurement. This role would oversee a national strategy integrating tax incentives, permitting reform (started with Trump’s executive orders), strategic offtake agreements, and public-private partnerships to onshore and offshore the entire value chain for lithium, cobalt, nickel, graphite, and rare earth elements.
The policy would fund domestic refining capacity, mandate “Buy American and Friends” sourcing for defense and clean energy, and create a dynamic national stockpile of processed materials. Thus, it is not necessarily a nationalist move but rather one that bolsters the independence of many primary, secondary, and even new allies.
It would also include investment in education, workforce development, research into substitutes and bio-extraction, and allied cooperation with resource-rich partners. Modeled to some extent on Cold War-era mobilization frameworks, this industrial policy treats critical minerals not as commodities but as strategic assets essential to national security, economic competitiveness, and technological sovereignty.
Final Thoughts
Its April 2025 export curbs have starkly exposed China’s near-monopoly on defense-grade heavy rare earths. It should not be a surprise as REEx has elucidated—12 years ago, the U.S. government issued reports that the REE dependence was a problem. See “In 2013 a Congressional Report was to Jolt the U.S. Ruling Establishment into Rare Earth Action—Not Much Happened. Where is the Accountability?”
Politicians, government bureaucrats, corporate executives, military planners, investors, and influencers in academia or the media perhaps just assumed the problem might somehow magically go away someday based on the overall inaction.
Currently, no substitute source can immediately replace Chinese Dy or Tb. Fortunately, several non-Chinese heavy-REE projects (Lynas Malaysia, Laos, Vietnam, Australia, etc.) are moving forward, and new processing plants are under development.
But the myriad, unfolding set of initiatives will scale slowly. In the interim, Western defense industries must rely on a combination of stockpiles, recycling, and coordinated international supply networks to mitigate shortages. As cited in REEx, coming to a trade accord with China allowing access to HREE should at least be considered, if feasible. If President Trump takes a strategic step back, thinks creatively, and tunes out the political noise, he could strike a pragmatic deal with China to ease access to critical heavy rare earth elements at least for the short and intermediate run.
Long-term resilience will require continuing investment in allied mining and refining capacity, value-added production, plus innovation in materials science. An entire supply chain system must be developed “ex-China” for the benefit of the United States and other nations seeking options. Ideally the U.S. government, elected officials and influencers in the nation will recognize the need for a more intensive critical minerals industrial policy.
The recent Chinese actions have galvanized such efforts; the coming years will determine if the West can build a truly independent HREE supply chain for its critical defense needs.
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