In July, a pivotal point occurred when the federal government became the largest shareholder of MP Materials, a California-based company extracting rare earth elements essential for the crucial magnets that link the global economy.
TL;DR
- US seeks rare earth independence from China's supply chain through domestic mining and magnet production.
- The U.S. government is investing in MP Materials and setting price floors to counter Chinese competition.
- Achieving full rare earth independence from China will take at least ten years, requiring global collaboration.
- Multiple U.S. and international projects are underway to boost rare earth refining and magnet manufacturing capabilities.
The government’s unusual foray into private industry was accompanied by new rules setting minimum U.S. Market prices for some of these materials—a pricing floor it said was necessary to protect MP Materials from Chinese competitors it accused of “dumping” their goods at artificially low prices.
This signaled the beginning of the Trump administration's effort to challenge China's three-decade grip on trade for numerous vital minerals, which are becoming essential components in products like drones, cars, data centers, and missiles, all of which power the U.S. Economy and strengthen its national security.
“This is really a Manhattan Project-style effort with all-out intensity,” MP Materials CEO James Litinsky told Coins2Day. MP is expanding its Mountain Pass mining, refining, and recycling in California and its new Texas magnet plant in this “Cold War 2.0.”
The core of the dispute involves 60 natural elements classified as “critical minerals” by the U.S. Government. This group encompasses the 17 rare earth elements and crucial battery components. The United States currently produces none of more than half of these materials.
If it’s been a while since you studied the periodic table, rare earths are elements that share silvery-white soft heavy metal characteristics. While none are household names on their own, they are key ingredients in the amenities of modern life. Neodymium-iron-boron (NdFeB) magnets are used in virtually anything that moves. The “core four” rare earths for the magnets, motors, turbines, and more are neodymium and praseodymium, as well as the rarer dysprosium and terbium, which make magnets more heat resistant.
Rare earths present a paradox: while plentiful, their production is hindered by the complexities of extracting, separating, and refining them on a large scale. Locating them in significant concentrations is challenging, and establishing the necessary infrastructure and expertise for refinement from the ground up is exceptionally difficult, especially when facing China's subsidized cost advantages.
While China extracts most rare earths and numerous vital minerals, its most significant leverage lies in refining, a sector where it commands a 90% global market share, reaching 99% for certain materials. U.S. Policymakers and businesses are particularly worried about China's potential export restrictions on dysprosium, terbium, and magnets.
Despite the government's push to develop domestic mining and refining capabilities, the U.S. Can’t go it alone. The nation is actively pursuing global collaborations to bypass supply chains dominated by China. Additionally, nascent recycling sectors and alternative magnet chemistries are necessary.
“The Trump administration is leaving no tool off the table to safeguard our national and economic security,” the White House told Coins2Day. The new effort is palpable, but it doesn’t erase decades of Chinese superiority and a lack of planning before a tariff war was launched—even now that a temporary truce was struck.
What’s next?
Industry experts believe that with a united push, the U.S. And its partners can significantly reduce China's dominance within five years. However, completely ending worldwide dependence on China will take at least ten years. Energy research company Wood Mackenzie projects that U.S. Magnet production capabilities could satisfy a slight majority of domestic demand in three years. Nevertheless, challenges in refining rare earth elements could continue to impede production for an extended period.
Jeff Dickerson, a lead advisor at the Rystad Energy research company, is concerned that investors and international partners are hesitant about the U.S. Dedication needed to complete the project.
“Attention spans are fickle, and I worry that today’s focus on solving challenges will dissipate,” Dickerson said. “We’re stuck trying to dig our way out of a hole without a discernable plan, limited tools to act quickly, and allies who are skeptical of our reliability.”
Currently, the worldwide need for magnets crafted from rare earths is projected to climb by 25% within the next five years, with continued expansion thereafter.
As more companies establish U.S. Mines, refining operations, and magnet production facilities, federal financial backing is on the rise. The Trump administration, functioning much like a de facto sovereign wealth fund drawing from diverse financial streams, recently acquired equity in Canada's Lithium Americas, specifically its Thacker Pass mine in Nevada, and in Trilogy Metals for its mineral ventures in Alaska.
The United States finalized a significant agreement with Australia to boost access to rare earths and other vital minerals. Additionally, President Trump recently established multiple accords in Asia. In other developments, Ramaco Resources intends to extract rare earths from Its Brook coal mine located in Wyoming. Energy Fuels has incorporated rare earths processing into its uranium facility in Utah and is considering mining operations abroad. USA Rare Earth intends to mine for rare earths in West Texas and manufacture magnets in Oklahoma.
Regarding refining and magnets, Noveon is manufacturing magnets in Texas and recycling them with expansion aims, while e-VAC Magnetics is establishing a facility in South Carolina. Ucore Rare Metals of Canada has commenced construction on a processing plant in Louisiana. The U.K.'s Pensana has abandoned its plans for a rare earths refinery in England to instead develop one in the U.S. Furthermore, the industry's top company, Australia's Lynas Rare Earths, intends to construct a processing plant in Texas but is still pursuing additional U.S. Government backing.
Several domestic projects are in progress, though not all will be completed. Phoenix Tailings, a refiner, has launched its inaugural plant in New Hampshire and has significant expansion plans.
“This is our Sputnik moment where the U.S. Finally woke up and saw that someone else is just killing us in this race,” said CEO Nick Myers.
Leader in the clubhouse
Ten years ago, the Mountain Pass mine in California was struggling due to significant debt and China's practice of selling rare earths globally at low prices.
A hedge fund manager who’d bought into the bonds during the bankruptcy proceedings, Litinsky formed MP Materials and acquired the Mountain Pass assets in 2017. Since then, MP has steadily built up its capabilities, including opening the—not one to miss a marketing opportunity—”Independence” magnet plant in Fort Worth, Texas.
Litinsky didn’t predict the AI boom, but he foresaw the rapidly growing need for magnets and all facets of the supply chain.
“You can have all the rare earths in the world but, if you don’t have magnet-making capability, you’re still sending them to China. You really need all pieces of this puzzle to solve the problem,” he said. “Multibillion-dollar supply chains don’t move overnight, and it was very clear that this would take a long time. We’ve done it thoughtfully in stages.”
Because of MP’s ownership of the only U.S. Mine dedicated to rare earths and its growing vertical integration of magnet production, the U.S. Department of Defense bought a 15% stake in the company this summer for $400 million, sending its market cap soaring.
MP and Apple quickly announced a $500 million partnership to supply magnets fully manufactured from recycled materials, a pledge that entails recycling expansions at both the Mountain Pass and Fort Worth facilities. The deal with the government gives MP confidence to progress with expansions because China’s price-dumping threats are largely removed courtesy of the floor-pricing mechanism.
“They took the things off the table that we needed to warp-speed our investment,” Litinsky said. “That’s actually quite unique.”
The race to build
NioCorp Developments aims to start construction next year on the big Elk Creek critical minerals and rare earths mine in Nebraska. In the meantime, the company awaits a decision on a pending $780 million loan from the Export-Import Bank and hopes to strike a floor-pricing deal with the government.
“The needs are immediate. We’re going to have to bite the bullet, and we’re going to have to build these facilities,” NioCorp CEO Mark Smith told Coins2Day. “With that wake-up message that China sent us, the markets opened up, and now we’re going to be able to address onshoring of these supply chains.”
There’s no doubt that NioCorp and others are angling for similar deals to what MP struck with the federal government, even if it’s just an arrangement on pricing. But it’s also clear not everyone will succeed in scoring such agreements.
“When I go to D.C., I make sure I call that [MP deal] a precedent, and nobody argues,” Smith said. “I’m a true-blue American. When it first came out, I was extremely happy. On the other hand, I like our democratic and capitalist society, and government price supports don’t feel very good. But, when you realize what it’s going to do to stop that vicious Chinese MO they’ve undertaken for 30 or 40 years, it’s really positive.”
The same applies to international projects, especially in territories Trump says he wants to annex.
Critical Metals CEO Tony Sage is developing the massive Tanbreez rare earths mine in Greenland and recently received a letter of intent for a $120 million Ex-Im Bank loan. Sage wants to work with the U.S. To supply the desired heavy rare earths, such as terbium.
“In the 19th century, there was the gold boom. The 20th century was the oil boom,” Sage said. “We’re in the rare earths boom now, but this boom is going to fund everything for the next 30 to 50 years. Everything in your life needs rare earths.”
Many of the proposals are from young companies without vertical integration. That may make it harder for them to ink enough offtake contracts to reach final investment decisions and commence construction, Rystad’s Dickerson said. “This all screams risk to financiers who also have the experience of volatile commodity price cycles in most mineral commodity markets over the past 30 years.”
A possible exception is uranium mining leader Energy Fuels, the third- argest, publicly traded rare earths miner and refiner after Lynas and MP. When uranium markets struggled a few years ago, Energy Fuels started processing rare earths at its White Mesa Mill in Utah.
Now, Energy Fuels aims to develop critical minerals mines in Australia and Madagascar. Too many domestic mining projects lack the necessary mineral quality and economics, Energy Fuels CEO Mark Chalmers said. It will take the combination of domestic refining and magnets production coupled with more international mining and separating partnerships for the U.S. To win in the long run, he said.
“You need these next five years to really get that pendulum to swing in the right direction in a material way,” Chalmers said.
And it may not hurt that Energy Fuel’s Australia mining development is the Donald Project—named after a minerals deposit, not President Trump. “We’ve had a few smiles and chuckles out of that,” he added with a laugh.
Recycling and other options
To bypass the difficulties associated with extracting and processing rare earths, one approach is to eliminate their use altogether. Niron Magnetics, a company based in Minnesota, is among those exploring alternative methods. They recently commenced construction on their inaugural facility, which will produce magnets composed of iron nitride. This process leverages iron sourced from domestic steel production and nitrogen derived from the fertilizer sector.
“We will need to triple the number of magnets in the world,” said Niron CEO Jonathan Rowntree. “There are only enough rare earths for that to double from what’s being actively mined right now and new mines that are opening. This was always going to be a problem.”
It took more than ten years to create this technology, and Niron continues to enhance the magnets' power. However, the company has already teamed up with a leading car manufacturer, Stellantis, for motor design.
“We were born and raised to compete with China, but we’re playing a different game where there’s no chokehold on the raw material supply or equipment to make our product,” Rowntree said.
Another significant method for disrupting critical mineral supply chains involves recycling. In the United States, JB Straubel, cofounder of Tesla and CEO of Redwood Materials, is at the forefront of battery recycling, operating facilities in Nevada and a new $3.5 billion plant in South Carolina.
The objective is to extract essential critical minerals like lithium, cobalt, nickel, and copper from used batteries originating from EVs and other devices. Ultimately, this aims to establish a circular economy where recycling, rather than traditional mining, serves as the main source for these minerals.
“It’s kind of obvious, but not very intuitive, that almost all of the raw materials inside of batteries are reusable,” Straubel told Coins2Day. “As EVs and other energy storage products proliferate in the market, we have this incredible opportunity to evolve toward this materials economy for those products that will be 98% or 99% remanufactured over time.”
The end result is Redwood already is the nation’s unofficial leading “miner” of cobalt through its recycling efforts, and near the top in lithium and nickel.
MP Materials, for example, intends to pursue the identical recycling strategy for magnets and rare earths. Litinsky stated that in magnet production, over 20% of the materials are wasted during manufacturing and are eligible for recycling. He added that a combination of these initiatives will be necessary to dismantle China's monopolistic hold and stop it from re-establishing its supremacy.
“Regardless of which way this goes, Humpty Dumpty is not getting put back together again,” Litinsky said. “Clearly, supply chains are changing no matter what happens.”
A version of this article appears in the December 2025/January 202 6 issue of Coins2Day with the headline “How rare earths became ground zero in the U.S.-China rivalry.”