Rare earth elements consist of 17 elements on the periodic table with unique atomic structures that grant them special magnetic properties. These materials are essential in powering technologies such as electric vehicles, wind turbines, defense systems, data centers, and high-tech consumer electronics. Historically, the United States was a leader in rare earth production, but over recent decades, China has come to dominate the market, mining about 70% and processing around 90% of the world’s supply.
China’s dominance stems from its ability to produce rare earths and magnets at very low costs, making it difficult for producers outside China to compete. Experts note that China’s prices are “sub-rational,” effectively creating barriers for other countries to enter the market.
Recently, rare earths have become a significant leverage point in the ongoing U.S.-China trade war. In April, China implemented export controls on rare earths, disrupting several industries—especially the automotive sector. These controls are part of a broader “export control toolkit” that China has developed over several years, mirroring U.S. strategies to retaliate against what it sees as unfair trade practices.
In response, the United States is ramping up efforts to reestablish a domestic rare earth supply chain. The Department of Defense announced a $400 million investment in MP Materials, which operates the only active rare earth mine in the U.S., located at Mountain Pass, California. Financial institutions Goldman Sachs and JPMorgan have supported the company with a $1 billion loan to expand magnet manufacturing operations.
Other companies like Energy Fuels are advancing their capabilities in rare earth refining. Based in Utah, Energy Fuels has adapted its uranium refining technology to process rare earths and currently produces neodymium-praseodymium oxide (NdPr) on a commercial scale. The company plans to expand production from 1,000 to 6,000 metric tons of NdPr, potentially supplying magnets for up to six million electric vehicles. They are also developing the ability to produce other heavy rare earth elements such as dysprosium, terbium, and samarium, contingent on government support and incentives.
These efforts mark a strategic shift by the U.S. to reduce reliance on China and secure critical materials for future technology and national security needs.
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