The U.S. is making a concerted push to reduce its dependence on China for rare earth minerals, a critical component in everything from smartphones to military aircraft. The White House is pursuing a strategy that blends private industry with government support, a departure from traditional free-market principles. This approach mirrors China’s state-backed model, which has allowed it to dominate nearly 90% of global rare earth processing.
At the heart of this strategy is ReElement Technologies, an Indiana-based company that has developed a more efficient and environmentally friendly method of rare earth processing and recycling. The company’s technique involves chromatography, a process that separates and purifies compounds based on their chemical properties. ReElement operates a commercialization facility in Noblesville, Indiana, with a larger production site in Marion set to come online next year.
The Trump administration has announced a partnership between the Pentagon, via its Office of Strategic Capital (OSC), ReElement, and Vulcan Elements, a North Carolina-based firm that produces rare-earth magnets for military applications. This partnership aims to produce 10,000 metric tons of neodymium-iron-boron magnets annually within the next few years. These magnets are used in electric vehicles, wind-turbine generators, hard-disk drives, and MRI machines.
However, even this ambitious target is a fraction of the approximately 230,000 tons produced globally in 2024, according to the Institute of Electrical and Electronics Engineers (IEEE). Bert Donnes, a research analyst at investment banking firm William Blair, notes that ReElement’s current operation is compact compared to traditional processing facilities. This compactness helps avoid “not-in-my-backyard” (NIMBY) backlash, as the process can be kept small and less intrusive.
The U.S. lost its lead in rare earth production starting in the 1980s when China began surging ahead. Environmental concerns at the only major U.S. rare earth mine, Mountain Pass in California, further hindered progress. Spills of radioactive and toxic wastewater, byproducts of refining, raised alarms and led to multiple production halts. Meanwhile, China gained a foothold and eventually overtaking the U.S. in rare earths just as demand for them was rising.
Today, China produces about 60% of the world’s supply of rare earths, according to the International Energy Agency. Beijing also holds a substantial amount of the world’s proven reserves of the ores that contain these elements—roughly 34%, according to the U.S. Geological Survey. However, several other countries, including the U.S., have substantial reserves as well.
Trump’s trade war with China has made the squeeze in rare earths even more acute. MP Materials, which operates the Mountain Pass mine, has had to send its ore to China for refining due to the U.S.’s lack of large-scale processing capability. However, the company is now ramping up its limited capability to process the ore on-site. Further complicating the issue are expanded export controls that Beijing announced last month, requiring foreign companies to obtain a license to sell products overseas that contain Chinese-sourced rare earths.
Aaron Mintzes, deputy policy director and counsel at Earthworks, urges the U.S. to process rare earths in ways that reduce energy and water intensity and toxicity. Brent Elliott, a research associate professor of geology at the University of Texas, estimates that the U.S. has sufficient resources to meet demand. However, he notes that the extraction process must be environmentally sensitive and socially responsible.
Many experts agree that the U.S. has enough reserves but lacks the processing capability to go along with it. Simon Jowitt, a geologist and the director of the Nevada Bureau of Mines and Geology, says there are a number of rare earth deposits in the U.S. that have potential. However, it’s rarely a straightforward proposition. “You need a source of the rare earths, some way of transporting the rare earths, some way of concentrating the rare earths, and some way of putting those rare earths into a form that they can then be extracted,” Jowitt says. “If you don’t have one of those, then you end up with something that isn’t a mineral deposit and you’ll never get anything out of it.”
Last year, China decreed new regulations for rare earth processing that include strict environmental and safety regulations. However, it remains to be seen how stringent enforcement will be. Meanwhile, China not only processes its own ore but also imports raw ore from places like Southeast Asia and Africa. This strategy is part of a broader effort by China to set itself up as a global hub for rare earths, according to Gracelin Baskaran, director of the Critical Minerals Security Program at the Center for Strategic and International Studies. “They put a lot of state resources behind building