The New Race for Mineral Independence

America’s $1.4B Bet on Rare Earths

The thing about rare earth elements is that they aren’t actually that rare. Many of the 17 elements – 15 lanthanides plus scandium and yttrium – in the category are quite abundant in the Earth’s crust. But they are rarely found in pure form in large concentrations. Much more often they’re mixed in with other minerals, difficult to extract, and expensive to boot.

As such, geology and technology are both extremely important to the rare earth element supply chain. The places with large concentrations of them have an advantage, as do those that can extract and refine them efficiently.

Modern life is full of high-tech gadgets that make use of rare earth elements. Cell phones, computer monitors, TVs, hybrid and electric vehicles all rely on them. So do defense systems such as radar and sonar, lasers and guidance systems. They may be a small part of a gadget product but one it can’t operate without. As the U.S. Geological Survey explains, “Although the amount of REE used in a product may not be a significant part of that product by weight, value, or volume, the REE can be necessary for the device to function. For example, magnets made of REE often represent only a small fraction of the total weight, but without them, the spindle motors and voice coils of desktops and laptops would not be possible.”

Domestic Investment

Control over rare earth element production, then, is extremely important for tech-based economies and for defense. Their importance has emerged during an era when China went from producing 38% of the world’s rare earths in 1993 to controlling more than 90% now. About half of the world’s reserves – 44 million out of 92 million metric tons – are found within China’s borders. Brazil checks in at second with 21 million metric tons. The U.S. is home to just shy of 2 million metric tons, while Greenland has about 1.5 million, which at least partially explains President Trump’s desire to annex it.

In an effort to shore up a domestic supply chain, the U.S. government has announced a $1.4 billion partnership with Vulcan Elements and ReElement Technologies. The Defense Department’s Office of Strategic Capital is kicking in half the cost, with a $620 million direct loan to Vulcan and $80 million to ReElement. Vulcan is putting the money toward a $1 billion factory in North Carolina to manufacture rare earth magnets, while ReElement is expanding its recycling and processing operations. The two companies, which already partner on a vertically integrated domestic supply chain for the magnets, will scale those operations to 10,000 metric tons of production capability.

“We’ve seen how supply chains can be weaponized to impair national security imperatives and our country’s economic resilience,” Vulcan CEO John Maslin told Axios. “What Vulcan has been able to prove is that you can make rare-earth magnets fully decoupled (from China) down to the equipment, the software, and the material level.”

Recover & Refine

The partnership is one of a series of moves ReElement has made to build up the U.S. supply chain for rare earth elements. It also announced in November a partnership with electronics recycling firm ERI to recover and refine rare earths from discarded electronics.

“We are starting small with smart watches, earbuds, speakers and smaller hard drives,” ERI chairman and CEO John Shegerian told Recycling Today. “We will increase as our volumes increase and their volumes increase.”

ReElement’s new Marion, Ind., facility should be able to produce 9,000 metric tons of purified rare earth oxides, chairman and CEO Mark Jensen said, noting that 95-98% of rare earth elements from electronics currently go to landfill.

“We can win additional business together to make sure these products get back in the supply chain,” Jensen told Recycling Today.

ReElement uses chromatography, a technique used in chemical labs and pharmaceutical production to separate end-of-life magnets from electronics, rather than using legacy techniques like hydrometallurgical or solvent extraction, purifying targeted materials more easily.

“ReElement’s groundbreaking technology and solutions make it the leading refiner of high-performance critical battery and rare earth elements required in energy, transportation, defense and other technologies. This new relationship will open the door for a whole new wave of U.S.-based capabilities in the rare earth realm that will have both domestic and global implications,” Shegerian said.

ReElement is also partnering with digital asset infrastructure firm SAGINT to tokenize rare earth elements on blockchain, providing real-time supply chain visibility and digitized warehouse receipts.

“By integrating SAGINT’s institutional-grade tokenization infrastructure, we are establishing the most secure, transparent, and compliant critical mineral supply chain in the industry – an essential foundation for U.S. energy independence and national security,” Jensen said.

Perhaps it’ll be the start of making rare earth element production a common occurrence in the U.S.