Highlights

• Lynas Rare Earths and MP Materials are the only credible ex-China mine-to-magnet platforms today, but neither has achieved commercial-scale separated SEG (Sm/Eu/Gd) production—the critical missing link for Western samarium-cobalt magnet independence.
• DFARS 252.225-7052 expands January 1, 2027, to require full supply chain provenance for SmCo magnets from ore origin through finished product, making 'processed here' insufficient without auditable atom-level traceability.
• Mount Weld's geology limits Lynas to roughly 35-40 tonnes/year of recoverable heavy REEs, meaning Western supply at scale will require multi-origin feed networks, shared processing infrastructure, and certification-grade transparency—not single-mine fantasies.

For all the noise surrounding rare earth independence, the reality is simpler—and more sobering: only two companies outside China truly anchor the West’s mine-to-magnet rebuild today—Lynas Rare Earths and MP Materials. They are the grown-ups in a sector full of PowerPoint fantasies: scaled assets, real operating history, and—most importantly—governments willing to bet national security credibility on their execution.

But neither has escaped the constraint that has defined rare earth strategy for three decades: heavy and SEG rare earths are scarce in ore bodies, expensive to separate, and brutal to commercialize. That constraint is becoming non-negotiable because U.S. defense procurement is shifting from “capability stories” to auditable supply chains—paper trails with teeth.

And the compliance clock has a date on it.

Under DFARS 252.225-7052 (opens in a new tab), the restriction expands effective January 1, 2027, to cover the entire supply chain for samarium-cobalt magnets—from the mining/production of cobalt and samarium ore or feedstock (including recycled material) through finished magnets. In other words, it won’t be enough to say, “processed here.” The question will be “where did it originate?” And while waivers and phased pragmatism are always possible in Washington, DFARS is designed to make exceptions painful—not routine.

The Core Question behind the SmCo Supply Chain

Who is supplying samarium for Western SmCo magnets today?

Not who plans to.

Not who has pilot flowsheets.

But who can deliver separated material, in volume, with auditable provenance?

As of early 2026, the uncomfortable answer still holds: no Western producer has closed commercial-scale Sm/Eu/Gd separation into individually marketed oxides at a meaningful scale. (That’s a statement about separated SEG, not about mixed concentrates that merely contain SEG.)

Lynas: the Western Benchmark—with a Critical Caveat

Lynas remains the most advanced rare earth processor outside China, and it has earned that status the hard way: by building, commissioning, and producing. In May 2025, Lynas confirmed first production of separated dysprosium oxide at Lynas Malaysia. Shortly after, it confirmed the first terbium oxide production as the second separated heavy rare earth oxide from the facility.

That is not marketing. That is industrial execution.

What the Ore Actually Allows (and what it doesn’t)

Here’s where _Rare Earth Exchanges_™ has to stay unsentimental: Mount Weld’s heavy-REE endowment sets a hard ceiling on what can plausibly be produced from Mount Weld-origin feed, even if separation runs beautifully.

A REEx production capability analysis estimate finds that at Lynas’ FY24-level REO production and typical distribution assumptions, the maximum contained Tb+Dy+Ho in the ore/concentrate stream is about ~44 tonnes/year, and at a higher recent production level (FY23) the upper bound is ~67 tonnes/year contained.

Assuming 80–90% recovery, the theoretical recoverable band becomes roughly ~35–40 tonnes/year.

Mount Weld’s geology sets a hard physical ceiling on what Lynas can ever supply from its own ore—and that ceiling is far below what Western defense and magnet ambitions imply.

Mixed-origin feed is the strategy, but DFARS will make it the scrutiny.

If Lynas (or any ex-China processor) is positioned to supply heavy rare earth oxides at volumes that materially exceed what Mount Weld can plausibly support, the only realistic pathway is blended sourcing: additional concentrates, third-party feed, externally sourced heavy streams, processed through Lynas infrastructure.

 That is industrial reality, not a critique. In fact, it’s a sign of maturity: the West’s edge is increasingly processing reliability and scale-up discipline—not the fantasy that one celebrated ore body can replace China.

But DFARS will care. Under DFARS’ expanded supply-chain rule (effective January 1, 2027), “processed in Malaysia” will not be the whole story. What will matter is origin certification across the chain—the provenance of the atoms that become samarium-cobalt and NdFeB magnets.

SEG Reality: Lynas Ahead, but not Magically Finished

Even with Dy/Tb separation achieved, commercial-scale separated Sm/Eu/Gd oxides are still not established as routine, disclosed product streams, the way NdPr is. Lynas’ buildout continues—including expansion plans in Malaysia that explicitly reference supply from Mt Weld, as well as other developing sources.” And its U.S. Seadrift heavy-REE project remains contingent: Reuters reported Lynas flagged uncertainty and said it may not proceed without commercially viable offtake terms.

None of this diminishes Lynas. It sharpens the truth: Lynas is the West’s most proven processor—and the West will need more feed than any single ore body can provide.

MP Materials: Disciplined Sequencing, Backed by the Pentagon

If Lynas represents execution under constraint, MP Materials represents disciplined sequencing at scale—and a new level of U.S. government intimacy with industrial policy.

In July 2025, MP announced a major Department of Defense (War) partnership that included an expected $150 million DoD loan tied to expanding heavy rare earth separation capabilities at Mountain Pass. The DoD’s Office of Strategic Capital later described a $150 million direct loan to add heavy rare earth separation capability at MP’s existing Mountain Pass processing facility.

That SEG+ stream contains samarium, europium, gadolinium, and MP has recently re-confirmed with REEx that its SEG contains 4% terbium, dysprosium, and other heavy elements. Crucially, MP is not separating this material at scale today. REEx will continue to track when that capability is fully in production, online.

MP’s story is not that it has already solved heavy/SEG separation. It’s that it has become the U.S. government’s central mine-to-magnet platform—and is being financed accordingly. Mainstream media have framed the deal as a geopolitical response to concentrated Chinese dominance in magnet supply chains.

REEx’s investigative bottom line on MP is simple:

• MP is building toward separation capacity with explicit federal backing.  This asset is America’s treasure trove, and it must evolve to become as much of a network (of a series of integrated assets).
• MP’s mine-to-magnet credibility comes from sequenced construction, financing, and procurement alignment, not from claiming today what will only be true tomorrow.

The Strategic Truth the West Must Face

Lynas and MP Materials are the only credible ex-China mine-to-magnet anchors today.

They are not perfect. They are not finished. But they are the platforms the West is actually building on.

Four conclusions follow—cleanly, without spin:

1. Separated SEG (Sm/Eu/Gd) at commercial scale remains the missing link ex-China.
2. Heavy/SEG supply at scale will require multi-origin sourcing and aggregation—because geology demands it.
3. DFARS 252.225-7052 will force provenance discipline across the supply chain effective January 1, 2027*—especially for SmCo (and similarly scoped NdFeB) magnets.
4. The West’s winning strategy will not be a single mine feeding a single magnet plant. It will be networks: qualified feed, shared processing leverage, transparent reporting, and certification-grade traceability.

* Implementation timelines may be adjusted, but the provenance requirement is not expected to disappear.

Lynas and MP are not the problem.

They are proof that the West can still build.

Now, policy and procurement have to meet them at the only level that matters: atoms, origin, and audited reality.