Firms aim to boost rare earth processing in the US

Firms in the US and Australia are pushing forward with plans to improve the processing of rare earth elements, which are used to make magnets found in electric vehicle motors, wind turbines, and military weapons.

Rare earth elements are mined all over the world, but the processing steps that convert ore into rare earth oxides and metals are concentrated in China, as is the final production of magnets, according to the US Geological Survey.

MP Materials, which extracts rare earth ores at a mine in California, says it has begun to produce refined rare earth products. MP expects to start shipments of neodymium-praseodymium oxide this quarter. The material will be further processed into metals by companies in Southeast Asia.

While there are 17 types of rare earth elements, neodymium, praseodymium, terbium, and dysprosium are the most important ones for magnets.

Separately, Lynas Rare Earths says the US Department of Defense is increasing its financial contribution to the company’s planned rare earth processing facility in Texas by $138 million after design work indicated the project would cost more than expected. The defense department initially committed $120 million in June 2022. Lynas, which processes rare earths in Malaysia, has already purchased land for the project and hopes to start production before June 2026.

Further down the supply chain, USA Rare Earth announced that it will source rare earth metals, materials normally made in China, from Australian Strategic Materials so that it can make magnets at a planned facility in Oklahoma.

Australian Strategic Materials is developing a rare earth mine in Australia. It plans to produce rare earth oxides in Australia and convert them into metals at its facility in South Korea. Meanwhile, USA Rare Earth hopes to build its own rare earth processing facility in Texas.

Ross Embleton, a rare earth analyst with the consulting firm Wood Mackenzie, says governments outside of China are eager to build their rare earth processing capabilities to ensure they have the raw materials needed to meet climate targets. But he says it will be difficult for non-Chinese firms to compete with Chinese companies that have strong government support and decades of experience.

“The processing and separation stages are very complex, very costly, very difficult to do,” Embleton says. “[China] has a real head start on that front.”

While there has been some progress on the mining, refining, and separation of rare earth elements outside of China, he says only a handful of non-Chinese companies can produce the metals and alloys needed to make magnets and the magnets themselves.