The US auto industry was thrown into chaos, and it was willing to pay any price to get the materials so central to EVs, while the defence sector was the greater threat and target. It is more than anecdotal that you cannot start an F-35 without REEs; each F-35 contains approximately 900 lb.
Whilst there is some stability now due to restored exports, China continues to flex its leverage against foreign nations in warning international companies against rare earth stockpiling and releasing its 2025 REE mining quotas with no fanfare – a sign it is determined to keep control moving forward.
The US is dependent upon China for 74% of its REEs, but when it comes to midstream processing this rises to 90%. It has been working for a number of years to regain control of these critical minerals, with the DoD working, via the 1950 Defence Production Act, to build out supply chains. MP Materials, which is fast emerging as a US-based monopoly, was awarded a US$400 million equity investment (beginning to rectify one big issue with MP in that one of its largest shareholders was the Chinese Shenghe Resources) and a US$150 million loan to Mountain Pass – its REE mine and separation facility. MP has also been given an unprecedented 10-year take-off agreement and a 10-year price protection per kilogram.
Funding has also gone towards MP’s Independence plant, its first downstream process, but it is only focused on one end product, neodymium-iron-boron magnets. So how far has the US really come in securing its supply chains – particularly midstream? Japan has been the most self-sufficient in critical materials since 2010, when China implemented REE controls. The government is a major investor in Lynas Rare Earths. Individual critical mineral-using applications – e.g. capacitors – are considered critical goods. Japan is partnering with the EU under the ‘economic two-plus-two’ dialogue, creating a collaborative sourcing channel to bypass Beijing’s dominant market position.
The UK developed its first critical mineral strategy in 2022, and the next iteration, the first from this new government, is due by the end of September, with more funding and specific policies to support the midstream anticipated. This follows the Modern Industrial Strategy published in June, which outlines eight key industries to be developed, and the critical mineral strategy is set to outline how critical mineral needs will be developed to further these.
Australia and Canada, being rich sources of critical minerals, have also stepped-up their investments and partnerships; Ontario launched a CAN$3.1 billion critical minerals plan, whilst Australia has launched an ambitious US$1.2 billion programme to purchase critical minerals, building upon the US$15 billion announced last year to boost domestic manufacturing and renewable energy. Aside from sovereigns, commercial clients have clearly been very concerned. They want alternative, non-Chinese supply of REEs and critical minerals, and to spread their supply chain risk.
At Metalysis, we have seen an uptick in inquiries from clients in the semiconductor supply chain, hypersonics, clean energy, and other advanced industries who all want to know that there is a western midstream processor who can provide high grade advanced materials to their specific physical and chemical specifications.
At scale, Metalysis is using its technology to help address the West’s critical material needs, with the aim of doing better than a “hope for the best, plan for the worst” approach.
