Highlights

• In 2025, Western rare earth strategy evolved from PowerPoints to funded infrastructure:
  • Upstream mines like MP Materials and Lynas became state-backed assets.
  • Midstream separation plants in the U.S., Europe, and Australia secured billions in financing and broke ground.
  • Downstream magnet facilities began commercial production for the first time this century.
• Heavy rare earths (Dy/Tb) remain the critical bottleneck:
  • Malaysia emerged as a strategic battleground.
  • New processing facilities from ReElement, Ucore, Carester, and ANSTO raced to break China's 85% control of global refining capacity.
• Despite aggressive U.S. policy momentum and President Trump's optimistic 2026 timeline:
  • Structural gaps in refining capacity, feedstock availability, and permitting suggest true supply-demand balance for non-China magnets won't arrive until 2028–2030.
  • This leaves defense, EV, and clean energy sectors exposed to sustained supply risk.

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In 2025, rare earths stopped being a niche “materials story” and became a full-spectrum industrial race. President Trump’s administration, while we suggest it needs to do far more to accelerate the ex-China rare earth element (REE) supply chain, deserves credit for generating what is certainly substantial momentum. The first such president to do this since the entire value chain was outsourced over the past couple of decades.  The year delivered a surge of government-initiated financings, offtakes, and build-and-buy partnerships designed to pry open supply chains long locked inside China’s midstream. The plotline wasn’t subtle: secure the mine, build the refinery, control the magnet. And if you couldn’t do all three, you partnered with someone who could.

Below is the year’s big picture

Organized by the only structure that matters in rare earths: upstream mining, midstream processing, and downstream magnets. Importantly, this was an exciting year, part of a great supply chain reawakening.

Upstream: Mines Become National Assets

MP Materials (NYSE:MP)

Went from “America’s only major rare earth mine” to a state-backed industrial anchor. The U.S. Department of Defense (DoD)struck a long-term partnership with a $110/kg NdPr price floor and support aimed at scaling magnet output and domestic capability.  The Pentagon would have access to 15% of the national rare earth “treasure trove.” Then came the geopolitical flourish: MP and Saudi national mining company Ma’aden inked a term sheet for a Saudi refining joint venture, explicitly framed as de-risking reliance on China.

The catch remains execution: scaling is brutal, and heavy rare-earth feed (Dy/Tb) is still the hard part. An early inning in a nine-inning game, at least. But has MP Materials emerged as too big to fail?

Lynas Rare Earths (LYX.AC)

The world’s largest ex-China producer raised A$750 million and continued to prove that ex-China production is possible—but not easy. Its U.S. heavy processing ambitions in Texas ran into uncertainty and cost pressure, reinforcing a core truth: midstream in the West is slow, capital-intensive, and politically exposed. Meanwhile, Lynas deepened the Malaysia footprint and backed a magnet plant partnership with Korea’s JS Link, making Malaysia not a footnote but a battleground. Lynas recently shipped some heavy rare earths to offtake partners in Japan.

Lynas and Sumitomo have a long-standing strategic partnership, backed by Japan's Organization for Metals and Energy Security (JOGMEC), to secure stable supplies of rare earths (both light REEs and increasingly heavy REEs like Dysprosium/Terbium) for Japanese industry, especially magnets for EVs and wind turbines, with Sumitomo acting as a key distributor, diversifying away from China's dominance. Sumitomo also partners with others like MP Materials and Victory for an even broader HRE supply.

Arafura Rare Earths (ARU.AX)

Pushed its Nolans project toward the brink of full construction readiness, bolstered by major financing momentum and heavyweight backing. The signal for investors: Australia is trying to turn rare earths into an export-grade industrial platform, not just a quarry.  

Arafura Rare Earths looks promising because it is advancing one of the few fully integrated rare earth projects outside China—again, the Nolans Project in Australia—with a clear pathway to produce NdPr carbonates and downstream separated oxides, supported by strategic offtake agreements, established funding, and strong technical progress; its combination of substantial, high-quality ionic clay resources, experienced management, and proximity to emerging refining infrastructure positions it to be a cornerstone supplier into Western magnet and EV supply chains.  The company needs to improve education and awareness about its’ potential.

USA Rare Earth (NASDAQ:USAR)

Aims to create a domestic "mine-to-magnet" supply chain for critical REEs for defense & green tech, leveraging its Round Top project in Texas for resources and partnering for magnet production. The key risks involve significant capital needs, complex permitting, competition from China, delays in mine development (Round Top is still exploratory), technical hurdles in refining magnet making (the group acquired Less Common Metals to mitigate some risk), and overall market volatility, despite strong government interest and potential, making it a speculative venture. 

Serra Verde (backed by Denham Capital and Energy & Minerals Group)

In Brazil delivered one of the year’s sharpest strategic moves: it shortened long Chinese offtake commitments to free up supply for Western buyers as new separation plants come online. It also had the kind of financing stamp Western governments now reserve for strategic minerals: a $465 million DFC loan. The message was blunt: heavy rare earths outside China are scarce, and those who have them get courted.

Aclara Resources (ARA.TO)

Announced plans for a $277 million heavy rare earth separation facility in Louisiana, with a timeline targeting end-2027 construction and production ramp thereafter—an explicit attempt to end the U.S. heavy rare earth dependency trap.

Iluka Resources (ILU.AX) & Lindian Resources (LIN.AX)

And in Africa-to-Australia integration, Iluka Resources (ILU.AX) secured a binding deal with Lindian Resources (LIN.AX) for 6,000 tpa of concentrate for 15 years—a rare case of upstream being contractually snapped into a midstream refinery plan.

Pensana Plc (PRE.L)

In 2025, they accelerated its Longonjo rare earth project in Angola while pivoting hard toward a U.S.-aligned “mine-to-magnet” strategy: it advanced mine development and construction planning, announced downstream partnerships to anchor future demand (including an MoU with rare earth recycling and refining specialist ReElement Technologies tied to potential U.S. refining integration and large-volume mixed rare earth carbonate offtake discussions), pursued U.S. government-linked financing via EXIM under supply-chain resiliency frameworks (explicitly positioning Longonjo output to qualify for U.S.-backed debt support), signed a magnet supply-chain linkage through a VAC/eVAC-related arrangement to connect Longonjo product into U.S. magnet manufacturing, and capped the year by securing a US$100 million strategic equity investment to fund drilling, mine development momentum, and the broader U.S. supply-chain pivot—steps that collectively signaled Pensana’s shift from a UK-centered refinery narrative toward U.S.-supported industrial policy gravity.

Brazilian Rare Earths (BRE.XA)

In 2025, they made significant strides in advancing its Monte Alto rare earth project by securing approximately A$120 million in financing to fund exploration, development, and early works, bolstering its financial position as one of the better-capitalized rare earth juniors.

A cornerstone of BRE’s year was a strategic long-term partnership with French processor Carester, under which BRE agreed to supply heavy rare earth concentrate (with a focus on dysprosium and terbium) to Carester’s new Caremag separation plant in France for up to 10 years, effectively anchoring future processing of Brazilian product into a European midstream facility and de-risking future offtake. In return, Carester agreed to assist BRE in advancing its own refinery plans in Brazil and provided technical and commercial collaboration across the value chain, positioning BRE as a key supplier into European and allied rare earth supply networks outside China.

Others

A partially American-owned startup called DTEC MMT arrived in Malaysia to secure upstream products paired with innovative refining options. What plans will the venture disclose in 2026?

What about rare earth mining veteran James Kennedy and the Pea Ridge mine?  Supposedly, substantial heavy rare earth can be derived from the tailings. Can Caldera Holding secure the capital to exploit the asset?

Midstream: Separation Plants Finally Leave the PowerPoint Stage

2025’s defining shift: processing ceased to be a “someday” ambition and became funded steel, poured concrete, and signed feedstock.

In the U.S., the year’s most consequential announcements attached real money to real capacity: Vulcan Elements + ReElement Technologies landed a substantial public-private package (700 million in direct U.S. Department of War (OSC) loans, $50 million in Commerce CHIPS Act incentives, and over $550 million in private capital) aimed at building domestic NdFeB magnets and expanding recycling and processing—an industrial chain from scrap to magnet.

ReElement Technologies

Touts an advanced chromatographic separation and purification platform—derived from patented research at Purdue University—to refine rare earth elements and critical battery metals from both virgin ores and recycled feedstocks such as end-of-life permanent magnets, lithium-ion batteries, and manufacturing waste. If this works at scale, this chromatography-based process could replace traditional solvent extraction, enabling high-purity rare earth oxides and critical elements with higher efficiency, lower energy use, drastically reduced waste, and a smaller environmental footprint compared with conventional methods, while also purportedly being modular, scalable, and deployable on smaller footprints or co-located with mine or manufacturing sites.

MP Materials

As cited above, secured $150 million from the government to develop heavy REE processing.

Energy Fuels (UUUU)

In 2025, they achieved significant rare earth refining milestones at its White Mesa Mill in Utah, focusing on establishing a fully domestic supply chain for magnet materials. Key accomplishments include the pilot production and qualification of heavy rare earth oxides (HREEs) and the successful use of its light rare earth oxide (LREE) product in commercial magnets.  While mostly focused on processing uranium, the company’s refining focus positions it well for organic American REE refining growth.

Ucore Rare Metals

Major 2025 milestones centered on advancing its U.S. heavy rare earth processing in Louisiana, securing significant funding (including an $18.4M DoD award), breaking ground on the Strategic Metals Complex (SMC) in May, and achieving key technology validations with the US DoD for HREE separation. Is the company positioned to build one of North America's first HREE separation facilities based on its RapidSX™ (opens in a new tab) technology?

European Rare Earth Refining

In 2025, notable developments were seen involving Solvay and Carester, both working to strengthen Western processing capacity outside China. Solvay expanded and inaugurated a rare earth production line at its La Rochelle, France, facility in April 2025, beginning commercial production of materials for permanent magnets and later securing contracts to supply key rare earth oxides to U.S. magnet makers, underscoring its growing role in Western supply chains.

Carester’s Caremag

The project in Lacq secured €216 million in financing in March 2025 to build a large-scale rare earth recycling and refining plant that aims to produce significant volumes of heavy and light rare earth oxides by 2026, positioning Europe to capture a meaningful share of global refined output.

The two companies previously signed a strategic memorandum of understanding to collaborate on rare earth permanent magnet value-chain activities, combining Solvay’s industrial processing experience with Carester’s recycling and upstream expertise to bolster European refining autonomy.

Neo Performance Materials (NEO.TO)

The Canada-based company has made significant strides toward regional supply chain independence from China (although it still has at least two plants in China). Neo already operates Silmet, the only commercial rare earth separation plant in the EU located in Sillamäe, Estonia, and in September 2025 officially opened a new permanent rare earth magnet manufacturing facility in Narva, Estonia, marking the first large-scale production of rare earth magnets in Europe for electric vehicles and wind turbines and receiving attention from European Commission leadership as part of broader EU industrial policy support.

Saskatchewan Research Council (SRC)

In Canada, it has made significant progress toward establishing a vertically integrated rare earth refining capability in North America by constructing and advancing its state-of-the-art Rare Earth Processing Facility in Saskatoon, Saskatchewan. Since the project’s launch in 2020 with substantial provincial and federal support, SRC has developed proprietary hydrometallurgical, solvent-extraction, and metal smelting technologies in-house and has already achieved commercial-scale production of rare earth metals, notably high-purity NdPr, with plans to scale output further toward annual targets in the 400–600 tonne range—enough to support hundreds of thousands of electric vehicles.

SRC’s facility, slated for full operation by early 2027, has secured major offtake partnerships and feasibility studies for an expanded processing and metallization complex, reinforcing Saskatchewan’s role as a growing possible global hub for rare earth supply chain development and helping reduce North American dependence on overseas processors.

Iluka Resources (ILU.AX)

In Australia, the Iluka refinery strategy hardened around one key point: refineries are only as real as their feed contracts—hence the Iluka Resources and Lindian supply agreement and broader feedstock hunt.

Australian Nuclear Science and Technology Organisation (ANSTO)

Australia is hopefully set to close a critical gap in the global rare earth supply chain with the opening of its first open-access rare earth processing facility in early 2026, built and operated by Australian Nuclear Science and Technology Organisation (ANSTO) at Lucas Heights. Taxpayer-funded and designed as shared national infrastructure, the facility directly addresses the long-standing contradiction that saw Australia—one of the world’s top rare-earth producers—export 100% of its concentrates overseas, mainly to China, for refining. Purpose-built for clay-hosted and ionic adsorption deposits, the plant will enable end-to-end pilot-scale processing from desorption through impurity removal to the separation of oxides, with Australian Rare Earths’ Koppamurra project as the first test case.

Strategically, the move reflects an apparent policy shift: acknowledging that rare-earth refining, unlike mining, typically requires sustained state support. This reality underpins China’s roughly 85% control of global processing capacity. While the ANSTO facility materially de-risks metallurgy and breaks the chicken-and-egg deadlock between miners and processors, social license, permitting, and commercial viability remain unresolved, underscoring that public infrastructure can enable—but not guarantee—the success of rare earth supply chains outside China.

Other Activities

And then there’s Malaysia, where the world learned (again) that rare earths don’t just run through geology—they run through chemistry and politics. Malaysia is pushing to keep value-added at home (including a ban on raw exports), while courting foreign partners and navigating public pressure around processing footprints. Alongside Lynas, Southern Alliance Mining’s (QNS.SI) strategic entry into rare earths via MCRE underscored Malaysia’s emergence as a contested node—complete with regulatory friction and scrutiny.  Known as “SAM,” much of its business today is with Chinese buyers. Will that change in 2026?

Groundbreaking of a $400 million critical metals refinery purportedly commenced in Nigeria with privately held Hasetins Commodities Limited.

Downstream: The Magnet Renaissance Begins

If 2024 was about mines and 2025 about refineries, 2025 also quietly became the year magnets started shipping.

In 2025, the DoD struck a multibillion-dollar public-private partnership with MP Materials to accelerate a sovereign U.S. rare earth magnet supply chain anchored by a new “10X Facility,” a second domestic magnet plant expected to begin commissioning in 2028 and bring total U.S. magnet production capacity to about 10,000 metric tons per year if all goes according to plan.  Apple piled on with a $500 million commitment tied to a U.S. magnet supply chain and a new recycling facility—rare earth circularity as industrial policy.

VACUUMSCHMELZE (VAC)

The German company, through eVAC Magnetics, shipped some of the first U.S.-made commercial NdFeB magnets in this century from South Carolina—symbolism with industrial teeth.

Permag

In 2025, American rare earth magnet makers have marked several key milestones as the U.S. works to build more resilient domestic supply chains: Permag emerged in June 2025 as a unified brand consolidating Dexter Magnetic Technologies, Electron Energy Corporation (EEC), and Magnetic Component Engineering (MCE), creating the only vertically integrated North American producer of high-performance magnets (especially Samarium-Cobalt) and advancing DFARS-compliance efforts for defense and aerospace applications. EEC, now a core part of Permag, doubled its SmCo manufacturing capacity at its Pennsylvania facility to bolster U.S. domestic production and reduce reliance on imports.

Arnold Magnetic Technologies

Expanded strategic supply agreements in 2025 to secure rare earth materials outside China and is investing in supply chain continuity and compliance with upcoming DFARS standards for NdFeB and SmCo magnets.

Noveon Magnetics

Continued scaling its Texas rare-earth magnet facility, exemplifying broader U.S. efforts to grow commercial magnet capacity.  The company has been producing American-made NdFeB magnets at commercial scale in San Marcos since 2023, and continues to actively ship finished magnets to customers.

These developments reflect a concerted industry push in 2025 to strengthen domestic rare earth magnet manufacturing across defense, automotive, and industrial sectors.

LS Cable & System (LS C&S)

The South Korean cable giant has announced its intention to invest in rare-earth magnet production in the U.S. According to the announcement, a $689 million facility in Chesapeake, Virginia, is intended to secure supply chains for EVs, defense, and aerospace. This expansion builds on their existing cable ventures and aims to create a complete rare earth value chain, from securing oxides to final magnet manufacturing. 

Vulcan Elements

Planned 10,000-ton magnet facility (with federal loans and private capital) signaled a new doctrine: the U.S. doesn’t want “some” magnets; it wants a scale platform, and this deal, while early stage, is meant to support such an endeavor.

Star Group Industrial Co.

POSCO International, a large steelmaker in Korea, and its partner Star Group  Industrial Co. are looking to develop magnet making with Arafura feedstock.

JS Link America

In 2025, the U.S. subsidiary of South Korea’s JS Link announced a $223 million investment to build a rare earth permanent magnet manufacturing facility in Columbus, Georgia, as part of broader efforts to diversify Western supply chains and reduce reliance on China. The planned 130,000 sq ft plant, to be located in Muscogee Technology Park, is expected to produce about 3,000 tons of permanent magnets annually and create over 520 jobs in engineering, production, and management, with operations slated to begin in late 2027.

The project underscores Georgia’s growing role in critical minerals and advanced manufacturing, and reflects JS Link’s strategy of linking U.S. production with its other facilities—including a magnet plant nearing completion in Yesan, Korea—while targeting supply to key sectors such as electric vehicles, wind energy, electronics, and defense systems

On the topic of magnets, the underlying truth is ruthless

Magnets are the value capture point. Whoever owns magnets owns the downstream leverage over EVs, wind, drones, missiles, robotics—modern industry’s muscle memory.

While President Trump has publicly declared that the United States will soon have “more magnets than it knows what to do with” by the end of 2026, Rare Earth Exchanges’ modeling suggests a far more constrained reality. Even with accelerated mine development, new processing capacity, and a wave of announced magnet plants, the tightest bottleneck—ex-China rare earth refining and magnet-grade material availability—remains unresolved.

According to Rare Earth Exchanges’ simulations, persistent structural gaps in heavy rare earth separation, qualified feedstock availability, workforce readiness, and permitting timelines make true supply–demand balance for domestically produced, non-China magnets unlikely before 2028—and quite possibly not until 2030 or later—leaving U.S. automakers, defense contractors, clean-energy manufacturers, and fast-scaling sectors such as drones, robotics, and advanced electronics exposed to sustained supply risk well beyond today’s political timelines.

The Year-End Takeaway

In 2025, China's rare earth strategy moved from aspiration to architecture. Upstream projects secured lifelines. Midstream refineries stopped being theoretical. Downstream magnets began to ship. But the vulnerabilities didn’t disappear—they became clearer:

• Execution risk is the tax on every Western project.
• Heavy rare earths (Dy/Tb) remain the tightest choke point, extremely tight.
• Malaysia is now a strategic arena, not a side plot.
• Vietnam declared at the end of the year its treasure trove will not be available without processing investment
• And industrial policy is back—not as ideology, but as emergency construction.
• While President Trump’s administration gets a solid A for intent, initiation, and leadership, the team unfortunately still grades lower on the necessary comprehensiveness and durability of industrial policy for rare earths and critical minerals for true resilience over the next several years. We need to work on Washington, DC, in 2026 to intensify and accelerate such efforts.

2025 didn’t end China’s dominance. It ended the West’s illusion that dominance could be competed against without building the chain.

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