Western Rare Earths Supply Chain Gains Momentum, Reports Reuters

MELBOURNE (Reuters) – The global supply chains for rare earth elements are undergoing a significant shift as companies seek to reduce their reliance on China, which dominates production. This realignment aims to diversify sources of materials critical for manufacturing permanent magnets used in various applications, including electric vehicles, wind turbines, and drones.

Here are some key companies working on or establishing production facilities for rare earth compounds, metals, and magnets to lessen the Western world’s reliance on imports from China.

The processing of rare earths involves two primary stages. The first stage extracts rare earths from ores that may contain other minerals and concentrates them into a mixed rare earth concentrate or carbonate. The second stage is more intricate and involves separating the rare earths into individual oxide compounds, which are then converted into metals used for magnet production.

Lynas Rare Earths

Lynas Rare Earths is the largest supplier of rare earth compounds outside China, operating from its Mount Weld mine in Australia. The company has processing facilities in Australia and Malaysia and is in the process of constructing a heavy rare earths processing plant in Texas, funded by $288 million in U.S. defense support. This facility is expected to commence operations in fiscal 2026 and will be capable of processing materials from third parties.

Solvay

Belgian chemicals manufacturer Solvay is enhancing its rare earth processing capabilities at its La Rochelle site in France, with plans to start the separation and production of rare earth oxides necessary for permanent magnet production by 2025. Currently, Solvay processes rare earths for applications such as automobile catalysts. In March, the company signed a memorandum of understanding with French partner Carester to explore manufacturing opportunities for the permanent magnets supply chain in Europe. Additionally, it has arranged to procure rare earth oxides from recycled sources through a partnership with the Canadian startup Cyclic Materials.

Carester aims to recycle 2,000 metric tons of magnets and extract 5,000 tons of heavy rare earth concentrates from mining operations annually starting in 2026.

Vacuumschmelze

Germany’s Vacuumschmelze is one of the largest permanent magnet manufacturers outside of China, with production facilities in multiple countries, including Germany, Slovakia, Finland, China, and Malaysia. Recently acquired by a U.S. private equity firm, it received $111.6 million in U.S. government funding to establish a neodymium-iron-boron magnet manufacturing plant in South Carolina, slated for completion by late 2025. The company has secured a magnet supply agreement with General Motors and provides products to the U.S. Department of Defense.

Less Common Metals

Based in the UK, Less Common Metals produces rare earth metals and alloys and is involved in the European Supreemo project, which aims to create a European rare earths value chain.

REEtec

Norwegian company REEtec, supported by Swedish miner LKAB, is constructing a commercial rare earth separation plant targeted for production in 2025. It is currently negotiating with companies to supply concentrate for the facility.

Iluka Resources

The Australian mineral sands producer Iluka Resources is developing its Eneabba rare earths refinery in the northwest of Australia, which will process heavy rare earths from its own operations as well as third-party sources. The refinery is expected to be operational by the end of 2026. Iluka has received a loan of A$1 billion from the Australian government to support what will be the first fully integrated rare earths refinery in Australia.

Posco International and Star Group

South Korea’s Posco International plans to provide permanent magnets produced by Star Group to German and U.S. automotive manufacturers starting in 2025, with sourcing from the U.S., Australia, and Vietnam. Star Group is the only manufacturer of rare earth permanent magnets in South Korea.

Japan

Japan boasts a robust magnet market that supports its automotive and high-tech sectors, with major players including Shin-Etsu Chemical, TDK Corporation, and Proterial.

VTRE

Vietnam’s VTRE, which previously partnered with Australian rare earth producers, halted production late last year following regulatory issues involving its chairman.

Neo Performance Materials

The Toronto-based Neo Performance Materials manufactures rare earth oxides, magnetic powders, and permanent magnets across several global facilities, including in the U.S., Germany, Canada, Thailand, and the UK. The company plans to launch a new permanent magnet plant in Estonia in the coming year.

Saskatchewan Research Council

Canada’s Saskatchewan Research Council received C$31 million in government funding to establish a rare earths processing plant. It has an agreement with a Vietnamese group to import up to 3,000 tons of rare earth carbonate annually over five years starting in June 2025.

Ucore Rare Metals

Ucore Rare Metals, also based in Canada, is developing a facility in Louisiana for the separation of heavy and light rare earths, expected to become operational by late 2025.

Rainbow Rare Earths

Rainbow Rare Earths, supported by a private investment firm based in Dublin, has commenced a rare earth oxide separation process in Florida, with plans to produce rare earths carbonate from its project in South Africa.

MP Materials

MP Materials is in the process of establishing a rare earth magnet manufacturing plant in Texas, aided by $58.5 million in government funding. Although currently it exports rare earth concentrate to China, it began producing some rare earth oxides at its California mine site in 2023 and anticipates producing completed magnets by late 2025 for supply to General Motors. The company recently reported a larger-than-expected loss in the first quarter due to declining rare earth prices.

Energy Fuels

Energy Fuels, a U.S. producer of uranium and rare earth elements, announced recently that it has commenced the production of commercial quantities of separated rare earths at its operations in Utah, where it aims to produce up to 1,000 tons of neodymium-praseodymium annually.

FIEMG

In Brazil, the Federation of Industries of Minas Gerais (FIEMG) is working on a proof-of-concept magnet factory scheduled to open in the latter half of this year, aiming for a production capacity of 100 tons of magnets annually when fully operational.

(Note: It was reported that MP Materials began producing rare earth oxides in 2023, correcting any earlier inaccuracies.)