While rare earth elements are essential for modern technology, their scarcity is a misconception. The real challenge lies in the processing and refining stages, where China holds a dominant position. The US government is actively supporting domestic rare earth production to reduce reliance on foreign suppliers, including backing companies like ReElement Technologies, which aims to become a leading US producer.
Rare earths aren't all that rare. The real choke point is in processing and refining them, where China enjoys market dominance.With names like neodymium and dysprosium, rare-earth elements sound exotic — and their perceived scarcity has only added to the mystique.
In reality, rare earths aren't that rare, but just difficult to extract and refine. Yet they've become indispensable to modern life, embedded in everything from our smartphones and electric-vehicle motors to wind turbines and medical imaging machines.The real choke point is processing and refining — a complex and environmentally sensitive step that the U.S. has lagged behind in and that China now dominates, controlling The need for high-torque, compact EV motors — which use rare-earth magnets that are three to four times stronger than conventional magnets — is helping drive demand. Production of these motors is soaring byTo reduce reliance on foreign supply, the White House is pursuing U.S. self-sufficiency in rare-earth production. The federal government under President Trump has supported the sector in ways that depart from traditional free-market principles. Rather than relying solely on private industry, the federal government has followed a strategy similar to China's, providing hundreds of millions in loans and even taking stakes in key mines and startups. Indiana-based ReElement Technologies is among the beneficiaries of this government backing. Earlier this month, the Trump administration announced a partnership between the Pentagon, via itsReElement says it has developed a more efficient, environmentally friendly method of rare-earth processing and recycling that involves chromatography. The company operates a commercialization facility in Noblesville, Ind., with a larger production site in Marion, Ind., slated to come online next year.ReElement Technologies CEO Mark Jensen says confidently that by the end of 2026,"we'll be the largest producer of rare earth oxides in the United States."Because China's dominance in refining is so great, the U.S. benchmark for success is modest, according to Bert Donnes, a research analyst at investment banking firm William Blair. ReElement, in partnership with Vulcan Elements, aims in the next few years to produce 10,000 metric tons of neodymium-iron-boron magnets used not only in EVs, but also wind-turbine generators, hard-disk drives and MRI machines. Even that ambitious target is a fraction of the approximately 230,000 tons produced globally in 2024, according to the"I would say if you see those numbers, you think this is going to be a massive facility," says Donnes of ReElement's current operation."It isn't." Compared to a traditional processing facility, ReElement's operation is compact, he says, helping avoid any"not-in-my-backyard" backlash."So it's not like people are scared of this process. Maybe they don't know about it as much because you can keep the process so small," he says.of the U.S. and the rest of the world in rare earth production. Around the same time, environmental concerns mounted at the only major U.S. rare earth mine, Mountain Pass in California, where spills of radioactive and toxic wastewater — byproducts of refining — raised alarms. Mountain Pass is an open-cut mine where they"drill and blast, blend their types and locations in the pit" before grinding the solid materials into smaller particles, according to Kelton Smith, a lead process engineer for mining at Tetra Tech, a global consulting and engineering services firm. A flotation process then concentrates the rare earths that are in turn leached with hydrochloric acid. The California mine had to halt production multiple times over the years due to environmental concerns. During that time, it changed ownership and ultimately filed for bankruptcy protection before being acquired by MP Materials in 2017, which reopened the mine. The troubles at Mountain Pass helped China to gain a foothold and eventually overtake the U.S. in rare earths — just as demand for them was rising. Beijing now produces about 60% of the world's supply of these substances, according to the. China 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, but 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. Because the U.S. lacks the ability to process rare earths on a large scale, MP Materials has had to send its ore from Mountain Pass to China for refining.Aaron Mintzes is deputy policy director and counsel at Earthworks, a national group focused on preventing the adverse impacts of mineral and energy development."What we're urging … is to do that processing in ways that reduce energy and water intensity and toxicity," he says.Brent Elliott, a research associate professor of geology at the University of Texas, estimates the U.S. has sufficient resources to meet demand."It's about the extraction potential and the logistics of getting it out of the ground in a way that is environmentally sensitive but also socially responsible," he says. Partly because it is environmentally messy, with toxic byproducts, Beijing has gained an advantage by ignoring those consequences."China can do it faster and better because they don't have the environmental concerns that we have," Elliott says.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, but 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."for rare earth processing that include strict environmental and safety regulations, but it remains to be seen how stringent enforcement will be. Meanwhile, it not only processes its own ore, but it imports raw ore from places like Southeast Asia and Africa. It's part of a broader strategy 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 processing capabilities, such that the minerals come from different places and then they get sent to China for refining," Baskaran says."What China has been extraordinarily good at is connecting their foreign policy to secure rare earths from around the world."Refining is where ReElement comes in. The company uses large columns in a specialized filtration process developed at Purdue University to extract and purify valuable metals from raw ore, but also recycled rare earths from old magnets. The process is more efficient and less environmentally damaging than older methods, such as those used by China. Jensen, the ReElement CEO, says that method, known as solvent extraction, is"ecologically challenging" and difficult to scale."It's a dead technology," he says, adding that his company's ultimate goal isn't necessarily to achieve U.S. dominance, but to produce enough rare earths domestically to break China's monopoly.As part of the deal with ReElement, Vulcan Elements will get a $620 million loan from the Pentagon's OSC with an additional $50 million provided by the Department of Commerce undersigned by former President Joe Biden. ReElement Technologies will receive an $80 million loan to support the expansion of its recycling and processing operations. "I think we're making big strides now because of all the grants and all the critical-mineral-focused grants coming out," says Elliott, the University of Texas geology professor."I think it really can set us up for success."
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