Can America Rebuild Its Rare Earth Supply Chain When Money Costs 5%?

Highlights

• U.S. 10-year Treasury yields near 5.35% raise the hurdle rate for already risky rare earth projects, potentially stalling greenfield development.
• Higher interest rates punish time-intensive projects most, shifting capital toward brownfield expansions, recycling, and downstream processors with contracted offtake.
• The MP Materials–DoD deal—combining equity, loans, price floors, and offtake—offers a potential financing model for strategically critical rare earth projects.
• China's incumbency advantage includes fully depreciated separation, alloy, and magnet infrastructure that Western entrants must now finance at elevated rates.
• Washington may need expanded use of price floors, loan guarantees, and patient equity—but targeted carefully to avoid subsidizing marginal projects indefinitely.