Highlights
- China currently controls over 85% of midstream and downstream rare earth processing, creating a strategic vulnerability for the U.S. and Europe.
- Multiple companies like MP Materials, Energy Fuels, and Phoenix Tailings are developing domestic rare earth production and processing capabilities.
- Despite ongoing efforts, the West remains in early stages of building secure, integrated rare earth industrial bases to achieve strategic independence.
The United States and Europe remain heavily dependent on China for the midstream and downstream processing of rare earth elements (REEs)—the critical steps that convert mined ore into refined materials, magnets, and components essential for defense, clean energy, and advanced electronics.
While global attention has largely focused on mining, the real chokepoint in the REE supply chain lies in the midstream (refining and separation) and downstream (metal, alloy, and magnet production) sectors—domains where China holds over 85% market control.
In the U.S. as reported by Rare Earth Exchanges, MP Materials leads the charge with the only active rare earth mine at Mountain Pass, California, and a vertically integrated strategy to develop domestic magnet manufacturing. The company is now building a rare earth separation and magnet facility in Fort Worth, Texas, aiming to produce neodymium-iron-boron (NdFeB) magnets for EVs and defense systems, including under a contract with General Motors.
However,MP still sends concentrated material to China for final processing, highlighting the gap between aspiration and full independence. This contract however should be winding down soon.
Other U.S.-based efforts include Energy Fuels (opens in a new tab), which is reprocessing monazite sands for rare earth recovery at its White Mesa Mill in Utah, and recently inked a deal with France-based the Chemours Company(opens in a new tab) (opens in a new tab) representing a decisive step toward constructing a vertically integrated, U.S.-anchored critical minerals supply chain. This media reported a goal long overdue as global geopolitical tensions and clean energy targets strain the availability of rare earths, titanium, and zirconium.
Massachusetts startup Phoenix Tailings (opens in a new tab) is developing zero-waste rare earth recycling and refining technologies from mining waste and electronic scrap. Phoenix Tailings is part of a new wave of firms trying to bypass traditional mining altogether by extracting value from underutilized resources.
In Europe, Neo Performance Materials (opens in a new tab), while headquartered in Toronto, Canada, announced in 2023 a key rare earth separation plant in Estonia (opens in a new tab), serving as one of the only non-Chinese facilities capable of handling commercial-scale rare earth oxides at the time.
Note that Australian rare earth mine (not yet in production) Arafura inked a deal with Korea’s POSCO and Star Gorup for mine-to-magnet production. See Rare Earth Exchanges “_POSCO International and Star Group Drive U.S. Magnet Manufacturing Expansion – Australian Mine is Key.”_
Stillwater, Oklahoma-based USA Rare Earth (opens in a new tab) reports progress on the still early stage effort at producing rare earth permanent magnets at their Stillwater, Oklahoma facility. The firm’s aim: establish an independent supply chain.
Meanwhile, VacuumSchmelze (VAC) (opens in a new tab) inGermany and Less Common Metals(LCM) (opens in a new tab) in the UK are downstream players producing rare earth alloys and magnets for aerospace and automotive sectors.
Niron Magnetics (opens in a new tab), a University of Minnesota spinoff, plans to disrupt the game in a potentially disruptive way. They can produce rare earth element-free magnets, for example, for electric vehicles.
These firms operate in a fragmented ecosystem without the full mine-to-magnet integration seen in China.
While new public-private partnerships and funding from the U.S. Department of Defense and European Commission are accelerating efforts to regionalize these supply chains, both the U.S. and Europe remain in the early phases of building secure, integrated rare earth industrial bases. Without robust midstream and downstream infrastructure, the West’s mining ambitions will fall short of strategic independence.
With a couple executive orders now involving critical minerals and investigation into the impacts of Chinese export bans involving key rare earth element-based products, the White House begins to recognize the stakes involved.
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