US Can Produce Rare Earths If China Stops Exports – But There’s A Catch

Authored by John Haughey via The Epoch Times (emphasis ours),

It could take up to five years to develop a domestic supply chain to supplant China’s global monopoly in processing rare earths into materials needed to produce everything from iPhones to F-35 fighter jets.

While the United States has most of the 17 rare earth elements and 50 critical minerals underground, it has no industrial capacity to refine them into processed metals and magnets, according to Melissa “Mel” Sanderson, American Rare Earths board member and Critical Minerals Institute co-chair.

“Currently in the United States, we have zero magnet manufacturers,” Sanderson told The Epoch Times.

She said that’s why China imposed export restrictions on seven “heavy” rare earth elements on April 4 in response to President Donald Trump’s April 2 tariff announcement that boosted levies on China imports. After tit-for-tat tariff hikes, the United States is currently levying Chinese imports for 145 percent, with electronics exempted for now.

“I certainly hope, as the administration is working through this critical area—no pun intended, it’s a critical area—they realize there’s this vulnerability gap, a four to five year gap, no matter how you look at it, in terms of ramping up domestic production,” Sanderson said.

Trump’s April 2 order gives Commerce Secretary Howard Lutnick 180 days to suggest how the federal government can help develop a “circular” domestic rare earth supply chain.

The president is also pondering an order allowing deep-sea mining and commercial stockpiling.

Whatever the administration does, with enough permit reform, deregulation, and public-private incentivizing, industry will respond, economist Antonio Graceffo told The Epoch Times.

“The short answer is if China bans the sale of rare earth minerals to the United States” permanently, “that’s a positive thing because it’s going to force the United States to find a solution,” he said.

An analyst who writes about U.S.–China trade relations for The Epoch Times, Graceffo said there are “tons of solutions” to building a domestic rare earth supply chain, including the ongoing negotiations with Ukraine.

“Absolutely, we can overcome the problem,” he said. “In the long run, it’s going to be much better if China cuts us off. [Industry] will definitely find a way.”

Colorado School of Mines economics professor Ian Lange agrees. “I’m on the optimistic side,” he said.

Lange said there are substitute materials for the seven restricted rare earths, and some manufacturers are telling him they’ll survive without them.

He questioned if China can sustain its rare earth export restrictions because American industries are their biggest market.

“We’ll see if this is a real or just another hoop to jump through,” Lange told The Epoch Times. “And we have been slowly building up the supply chain over the last couple years.

“We’re getting close to having something here in the United States.”

But “close” is a relative term when it comes to mining and refining, where proposed projects can routinely take 10 to 20 years to be approved.

‘Long Way Off’

Australian-based American Rare Earths is among a wave of start-ups in the United States engaged in rare earth and critical mineral mining.

It will also process dysprosium and terbium, two of the seven restricted “heavies,” by building a refinery near its Halleck Creek mine outside Wheatland, Wyoming. Dysprosium is used in magnets incorporated in motors and generators for wind turbines, electrical vehicles, and nuclear reactor control rods. Terbium compounds are used in electronics, semiconductors, and fluorescent lighting.

The company, which also has a mine in Arizona, secured a $7.1 million grant from Wyoming and a Letter of Interest for up to $456 million in debt financing from the United States Export-Import Bank to produce what it says is a 20-year supply of key rare earths, including dysprosium and terbium.

Also in Wyoming, Ramaco Resources is breaking ground on an estimated 1.5 billion-ton rare earth deposit and pilot processing plant at its Brook Mine, while Rare Element Resources has started “proprietary processing and separation operations” at its Bear Lodge demonstration plant in Upton.

Oklahoma-based USA Rare Earths, which is opening a “neo-magnet” factory this year, produced its first sample of dysprosium oxide from its Round Top, Texas, mine this year and processed it at its research plant in Wheat Ridge, Colorado.

Ucore Rare Metals is developing the Louisiana Strategic Metals Complex in Alexandria with $20 million in state incentives, and Energy Fuels, a uranium mining company, is processing monazite sands to extract rare earths at its White Mesa Mill in Utah.

Both are Canadian-owned corporations.

The two most prominent rare earth operators in the United States are Australia’s Lynas Rare Earths, the world’s largest rare earth developer outside China, and Las Vegas-based MP Materials Corp.

Both are crucial in processing rare earths for the U.S. Department of Defense, which is midway through a five-year plan to build a “sustainable mine-to-magnet supply chain” to support its needs by 2027.

Lynas Rare Earth subsidiary Lynas USA was awarded $258 million in 2023 to build a 150-acre commercial separation plant in Seadrift, Texas, to process heavy rare earths such as dysprosium and terbium.

The Pentagon said in January it doubled its initial project request beyond military requirements to “strengthen supply chain resilience for … burgeoning high-tech industry as well as … national security needs.”

In 2022, the U.S. Department of Defense awarded MP Materials $35 million to build a processing plant at Mountain Pass in California.

And, in 2024, it received a $58.5-million federal tax credit to build the nation’s first fully integrated rare earth magnet manufacturing plant in Fort Worth, Texas, for GM electric vehicle motors.

In 2024, MP Materials achieved an all-time U.S. high output at Mountain Pass, delivering more than 45,000 metric tons of rare earth oxides and refined products.

The output included a U.S. record of 1,300 tons of neodymium-praseodymium oxide, key elements in “permanent magnets,” which retain their magnetic strength for decades.

“This milestone marks a major step forward in restoring a fully integrated rare earth magnet supply chain in the United States,” MP Materials CEO and founder James Litinsky said in a January statement.

“We have reached a significant turning point for MP and U.S. competitiveness in a vital sector.”

Yet, both Lynas Rare Earth and MP Materials produce more rare earth ore than they can process. To sustain operations, they must export much of what they excavate.

“MP is basically China’s largest offshore supplier” of rare earth ore, Critical Minerals Institute Executive Chair Jack Lifton said, noting China-based Shanghai Resources Industrial & Trading Co. bought 32,000 tons worth $350 million from MP Materials in 2024.

MP Materials did not return phone calls or email interview requests.

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