The New Alchemy Wars: Can U.S. Startups Break China's Rare Earth Spell?

Highlights

• China controls 90% of rare earth element processing, creating a strategic challenge for the US technology and defense sectors.
• Multiple countries are developing alternative rare earth processing capabilities, creating a multipolar supply chain landscape.
• US industrial policy is responding to China's export restrictions by investing in domestic rare earth metal production and processing capabilities.

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It’s a crisp Washington morality tale: China hoards the minerals, America scrambles for magnets, a startup vows alchemy per the conservative leaning Washington Times (opens in a new tab). Threat Status hits the right panic button—Beijing controls about 90% of processing, and in heavy REEs that’s the ballgame. The show is right that these elements animate everything from missiles to drivetrains. Where the narrative buckles is in the ellipses.

Bedrock vs. Broadcast

Yes, the U.S. has a single operating mine at Mountain Pass. No, it’s not still feeding China—MP Materials halted China-bound shipments in April after tariff crossfire, while Washington layered on price floors and offtakes to pull separation and magnets onshore. That’s not victory—but it is policy with teeth.

The World Beyond a Two-Hander

The episode frames a binary duel—DC vs. Beijing—then fades to credits. Meanwhile, Lynas quietly became the largest non-China separator and started producing two heavy RE oxides in Malaysia this year. Canada’s SRC switched on a public rare-earth facility. Europe elevated LKAB projects under its Critical Raw Materials Act. The map is multipolar; the podcast makes it monochrome.

The Policy Weather the Show Skips

Why the sudden urgency? China’s April 2025 export restrictions on several REEs and magnets—a licensing vise that rattled automakers and defense primes. Leave that out and U.S. “catch-up” sounds like bluster; include it and you see industrial policy as triage.

Startup Shine, With Caveats

Phoenix Tailings pitches “clean,” “zero-waste” metallurgy and says it’s producing commercial-grade metals in Massachusetts. That’s innovation worth tracking—as a claim. Scale, cost curves, and qualification remain the cliffs every midstream hopeful must climb. Check REEx for updates on this interesting company.

Investor Read—Signal, Not Salvation

The takeaway isn’t that America is doomed—or days from independence. It’s this: processing is the chokepoint, China is tightening the valve, and the U.S. under President Trump finally appears willing to spend, guarantee, and buy to stand up a midstream. That’s investable—but only for teams that can actually build plants, pass qual, and live through down-cycles.

Citation: The Washington Times, Threat Status Podcast, “How China dominates the U.S. in rare earth elements,” Sept. 5, 2025.

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