A new survey from the Center for Strategic & International Studies, published on April 14, analyzed the effect of export restrictions by China on rare earth elements and magnets.
The new restrictions apply to 7 of 17 REEs—samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium—and require companies to secure special export licenses to export the minerals and magnets.
These materials are used in the defense, energy, and automotive sectors.
They were banned in response to President Trump’s increased tariffs on China.
In the article, authors Gracelin Baskaran and Meredith Schwartz discussed the consequences of the disruption in the supply chain.
Here are a few excerpts from that article.
Q: Is the U.S. rare earths industry ready to fill the gap in the event of a shortfall?
A: No. There is no heavy rare earths separation happening in the United States at present. The development of these capabilities is currently underway. In its 2024 National Defense Industrial Strategy, the Department of Defense (DOD) set a goal to develop a complete mine-to-magnet REE supply chain that can meet all U.S. defense needs by 2027.
Since 2020, the DOD has committed over $439 million toward building domestic supply chains. In 2020, the Pentagon awarded MP Materials $9.6 million through the DPA Title III program for a light rare earths separation facility at Mountain Pass, California. In 2022, the Pentagon awarded an additional $35 million for a heavy rare earths processing facility.
These facilities would be the first of their kind in the United States, fully integrating the rare earths supply chain from mining, separating, and leaching in Mountain Pass to refining and magnet production in Fort Worth, Texas.
But even when these facilities are fully operational, MP Materials will only be producing 1,000 tons of neodymium-boron-iron (NdFeB) magnets by the end of 2025—less than 1% of the 138,000 tons of NdFeB magnets China produced in 2018. In 2024, MP Materials announced record production of 1,300 tons of neodymium-praseodymium (NdPr) oxide. In the same year, China produced an estimated 300,000 tons of NdFeB magnets.
The DOD has thrown its support behind Lynas Rare Earth’s U.S. subsidiary, Lynas USA, as well. The company was awarded a $30.4 million DPA Title III grant in 2021 for a U.S. separation facility for light REEs and another $120 million in 2022 for a heavy REE processing facility. These DPA investments are an important step in building completely independent supply chains for REE magnets.
Q: Are there any international partners from which the United States could alternatively source heavy rare earths and fill the supply gap?
A: While several countries are working to develop their light and heavy rare earths deposits, China maintains a monopoly on refined heavy rare earths for the time being. Australia, Brazil, South Africa, Saudi Arabia, Japan, and Vietnam all have initiatives and investments underway to bolster key REE mining, processing, and research and development (R&D) as well as magnet manufacturing. For the United States to build alternative sourcing partners for long-term supply chain security, it is important to continue to provide financial and diplomatic support to ensure the success of these initiatives.
Australia is working to develop its Browns Range to become the first significant dysprosium producer outside of China. The deposit has estimated dysprosium reserves of 2,294 tons, to be unlocked in a multistage process resulting in 279,000 kg of dysprosium per year. However, much work remains to be done to build processing and refining capacity outside of China. Australia’s Lynas Rare Earths is the largest producer of separated rare earths outside of China, but still sends oxides to China for refining. Australia is expected to be reliant on China for REE refining until at least 2026.
