Special report: the race to build a rare-earth supply chain outside China

The West spent the quarter proving it has the ground, which is the cheap and plentiful part of the chain.

This is the biggest chapter here, 117 stories across 49 days, and nearly all of it is exploration and permitting. Yukon Metals staked a historic tungsten showing. NIOB acquired the Kanawata property in Québec and reported that six of eight holes drilled across a 500 metre area at Bardy carried rare earth minerals. Titan Mining confirmed germanium enrichment across the Balmat-Edwards system at its Empire State Mines property in New York, and called it a feature of the whole district. Metals Australia published a prefeasibility study for an open-pit mine and flake graphite concentrator at Lac Carheil in Québec. On 21 August Greenland Mines said the Greenland government had approved the transfer of the Sarfartoq neodymium-praseodymium licence to it, which met a closing condition for that acquisition.

Two of these stood out. On 1 August the Financial Times reported that a miner may have found America's largest deposit of tungsten and that NASA is blocking its development. On 27 May the same paper reported that two US-backed rare earth rivals were fighting in court over alleged technology theft, and the Wall Street Journal came back to that fight on 29 June under the heading of a cutthroat battle to become America's rare-earth champion. Both are about what stands between a deposit and a working mine. The West has plenty of ground. Getting from ground to mine is the hard bit.

Beijing tightened in every direction at once, and its own producers had a profitable half year while doing it.

Beijing turns up in 73 stories over 47 days, and every one of them points the same way. On 28 May tungsten exports to Japan halved under tightened controls. On 19 June Beijing stepped up customs scrutiny of exports of indium, a metal that sits on no Chinese control list. On 22 June the Financial Times reported further export controls restricting trading with some US rare earth companies, which Beijing called retaliation for Washington's wrongful actions. On 24 June it detained two Japanese nationals over an alleged breach of rare earth export controls and opened a whistleblower hotline for violations. On 29 June it added 20 more entities to its export control blacklist, including units of Mitsubishi Electric, Mitsubishi Heavy Industries and Komatsu. On 24 July the New York Times reported a ban on shipments to 14 European companies in chemicals processing, electric motors and defence.

The bill showed up in the same three months. A survey reported on 16 July put rare-earth costs up more than 20% for Japanese firms. On 23 June antimony prices stood 2,600% above their level before China's ban. On 21 July Nikkei described a wide price gap between Chinese material and material from everywhere else under the export curbs. The IEA put $6.5 trillion a year of downstream production at risk should the controls suspended until November 2026 take full effect. On 9 July the Financial Times reported that Chinese manufacturers were using the export ban to move up the value chain and squeeze out foreign rivals. On 10 August the South China Morning Post reported that China's rare earth producers had booked or expected hefty first-half profits, and that using these minerals as trade leverage seemed to have left normal business alone.

The companies building the alternative chain reported missed estimates, cost overruns and a great deal of new equity.

Then the results came in, 53 stories of them, and they make harder reading than the announcements. Lynas posted record pricing for the fourth quarter of its 2026 financial year and missed on revenue, with a cost overrun on the Malaysia project, and said separately on 22 July that China's export curbs were pushing up the cost of that expansion. Energy Fuels missed on both lines for the second quarter, by $0.10 on earnings, and stuck to its 2026 outlook. USA Rare Earth reported a second-quarter revenue miss alongside what its own slides called value chain expansion. United States Antimony missed on second-quarter revenue and cut its outlook on 12 August, and its board approved a $100 million buyback a week later. Neo Performance Materials went the other way, raising full-year 2026 adjusted EBITDA guidance to a range of $140 million to $150 million on 9 July and beating second-quarter estimates on 11 August.

The fundraising never stopped. It ran from private placements of a few million dollars up to a $310 million Series B for Mariana Minerals, led by Khosla Ventures. Arafura planned a $250 million share sale backed by Australia's richest person. IMC Rare Earths, a Brazilian magnet rare earths developer, priced and closed a $20 million initial public offering in late July. Nth Cycle, a refiner, said it would list on the NYSE through a combination with Kensington Capital Acquisition Corp VI. One listing went the other way: Vedanta pulled the listing of its copper unit the day before the IPO, which the Financial Times noted had been meant to catch US enthusiasm for critical minerals. The one real production number in this chapter came from MP Materials on 7 August, which expects to make more than 1,000 metric tons of neodymium-praseodymium (NdPr) in the third quarter while working on a nine-figure gadolinium deal.

Refining took the Western money this quarter, and it has the least to show for it.

The biggest single commitments in this whole report are here, across 30 stories in 22 days. On 19 June Energy Fuels landed $725 million of US backing for a rare earth buildout. On 7 July Teck Resources, Canada Growth Fund and Natural Resources Canada's Canada Critical Minerals Accelerator signed a strategic investment agreement worth up to C$400 million to support strategic metals production at the Trail smelter in British Columbia. On 14 July American Resources' ReElement Technologies received a $25 million US investment to expand rare earth refining capacity, and a week later it began hiring ahead of commissioning in Indiana. USA Rare Earth entered definitive agreements for a strategic investment in Carester on 23 July, formalising a European rare earth partnership announced in April. On 15 July Alcoa began building a gallium plant at its Wagerup refinery.

The rest is one pilot plant and building-site update after another. Nova Minerals finished the engineering and design of its Estelle antimony pilot processing plant in Alaska on 13 July. Perpetua Resources, the US Army and Idaho National Laboratory launched an antimony trisulfide pilot plant on 30 July, which the Army called its nearest-term route to a fully domestic antimony supply chain. Electra reported progress on concrete, structural steel and equipment installation at its cobalt sulfate refinery in Ontario on 18 August. Completed, launched, installing, advancing. Every one of those words is attached to a pilot plant or a building site, and every Western separation plant in the quarter's reporting is still being built.

One project reached a final investment decision this quarter, a gallium plant in Australia, and three governments paid for it.

Deals across borders make up 28 stories, and Alcoa's is the clearest. On 14 July the company said that it and the governments of Australia, Japan and the United States had reached a final investment decision to build a gallium production plant at its Wagerup alumina refinery in Western Australia. Gallium is one of the metals Beijing controls, and a final investment decision is further than anything else in this chapter got.

The rest is a map being redrawn, some of it firmer than the rest. On 1 June USA Rare Earth invested roughly $200 million in France through 2030 to expand metal, alloy and magnet operations there, and on 20 July it combined with Serra Verde in a $2.8 billion deal whose chief executive now leads it. On 26 June Canada and Japan weighed joint critical mineral projects and joint stockpiling, and Japan separately extended cooperation with France in the search for supply outside China. On 29 July the US backed a rare earths project in Madagascar, and the Harena project turned up in a White House announcement on 10 August. Australia's Arafura said its $1.6 billion project would start construction in September, and the Wall Street Journal reported the mine could supply roughly 4% of the world's neodymium and praseodymium. Several smaller agreements sit underneath those, an India and Myanmar accord to foster mineral ties and an 18-year Iluka supply deal with VHM among them, and every one of them is a memorandum or a supply deal.

Two things complicate that map. On 22 May Lynas's deal with the Pentagon triggered an outcry in Malaysia. On 17 July the Wall Street Journal reported that Europe's effort to loosen Beijing's grip on the materials it needs to rearm had run into the deep pockets of the United States, under the heading that the US is trampling allies in the global hunt for rare earths.

Most of Washington's awards ran to tens of millions of dollars, against downstream production the IEA counts in trillions.

Washington shows up in 28 stories, and what strikes you is how small the individual awards are. The Department of Energy picked Core Natural Resources, Peabody and American Resources over the first ten days of July, each for a rare earth extraction or recovery pilot, and on 13 July the Pentagon put $25 million into ReElement Technologies. On 7 August the administration backed three mineral projects with $58 million of financing. In the third week of August it picked Felix Gold and American Tungsten & Antimony's US subsidiary for awards of up to $18 million each, both for antimony. Two awards broke that scale, both reported on 10 August: a $1.4 billion Department of Defense loan to Sila for battery materials production in Washington State, and a US Department of War investment in an Australian scandium mine, after which the miner rose as much as 29%.

The two numbers in that heading measure different things, and it is worth being clear about which is which. The IEA's $6.5 trillion is annual downstream production exposed to a control regime. What it would cost to replace the supply is a separate number, and nothing reported this quarter put a figure on it. The comparison sets the scale of what is at stake beside the scale of the response so far.

The quarter had its doubters too. On 28 July the Financial Times reported that funding gaps were hobbling western critical mineral objectives, and that government-backed financing was needed to draw private investment in. On 4 August the Pentagon cancelled a tender to buy up to $300 million of lithium carbonate for the national strategic stockpile. On 31 July senators asked five departments and the Export-Import Bank to preserve records relating to the Trump and Lutnick families' ties to critical mineral deals. And on 20 August the Financial Times published an opinion that the administration is losing its war of independence on rare earths, citing inefficiency, untrustworthiness and cronyism. That last one is an opinion column, and it reads as one.

The magnet is the point of the entire exercise, and in July the Pentagon's own suppliers said it will arrive too late.

Magnets are the smallest of the chain's four industrial stages, 18 stories, and the single most important thing in the quarter is here. On 27 July US producers acknowledged they cannot build enough domestic processing and magnet capacity before the 1 January 2027 cutoff, and that the administration was weighing whether to extend access to some Chinese rare earth materials past that date. Read the rest of this chapter against that sentence.

The building is real, and it is early. Energy Fuels agreed to buy the German magnet group Vac from Ara Partners for $1.9 billion, in what the Financial Times called a race to develop mine-to-magnet supply chains. On 30 June ReElement Technologies and POSCO formed a $200 million joint venture for US rare earth and magnet production. On 7 July Lynas signed a deal with South Korea's JS Link for a magnet factory in Malaysia. On 14 July USA Rare Earth said it had produced commercial-grade dysprosium oxide and neodymium-praseodymium oxide samples at its Wheat Ridge facility from recycled magnet material, which it said puts it among the few companies outside Asia able to separate heavy rare earths. On 17 August Evolution Metals said it had become one of the only known commercial-scale producers of neodymium-iron-boron magnet grades qualified by original equipment manufacturers, and had taken delivery of its first shipment of neodymium-praseodymium metal from outside China ahead of the same January 2027 deadline. Samples, qualifications and a first shipment are the first things a factory makes.

The buyers said very little this quarter, and what they did say was about designing their need for the material down.

The buyers account for 10 stories over 10 days, the thinnest industrial chapter here. The companies that use rare earths stayed quiet while the companies that dig and refine them published constantly.

What the buyers did say pointed one way. On 27 May Nikkei reported that Denso, a Toyota supplier, aims to cut its rare-earth reliance through research and development spending. On 22 June an analysis noted the electric vehicle industry's outsized exposure to cobalt supply disruption, and that leading makers had already moved standard-range vehicles to lithium iron phosphate chemistry. On 5 August Channel NewsAsia reported that Europe's race to arm Ukraine had exposed how hard it is to build drones without China, and that Kyiv had secured an EU exemption to buy drone components from China. On 18 August Ramaco signed a memorandum of understanding with Bedrock Semiconductor for gallium, and a memorandum is as far as it goes. One consequence did show up in a share price, over in the last chapter: on 10 August Morgan Stanley cut Kennametal to a Sell equivalent over the impact of a tungsten price spike, which is an analyst's judgement about a buyer paying more.

A licence is the chokepoint in this story, and the lanes are clear.

Moving the material around produced seven stories over seven days, the smallest chapter here, and the size of it is what is interesting. Over a full quarter, physical movement barely generated separate coverage at all. What you would expect to be a shipping problem turns out to be a paperwork one. The movement stories that did appear are about permission: on 24 June China detained two Japanese nationals over alleged rare earth smuggling, and opened a whistleblower hotline for export violations at the same time. Everything else about moving this material sits in the China chapter above, under export controls, licensing and blacklists.

The real logistics stories were few and small. On 22 July South Star reported the first shipment of graphite from its Santa Cruz plant in Brazil. On 26 May Quad ministers unveiled energy, critical minerals and Fiji port plans. On 4 August the Pentagon cancelled a $300 million lithium tender for the strategic stockpile, and that stockpile stays empty. And on 27 July the Financial Times reported on a sacred Kenyan hill sitting over a rare-earth deposit, contested between US, Chinese and Australian companies.

In the last month of the quarter the West picked up China's own instrument and banned the export of its own scrap.

Seven stories over five days, nearly all of them in the final weeks, and they mark a turn. On 30 July the president ordered restrictions on the export of critical minerals scrap. On 5 August the Financial Times reported a year-long ban on overseas sales of scrap tungsten and black mass, the shredded material recovered from used batteries, and the Bureau of Industry and Security began requiring a licence for those exports to secure domestic supply. A country that spent the quarter objecting to export controls brought in its own, on the waste stream.

The rest of the chapter is about designing the need away. On 30 July Nikkei reported that a Japanese parts maker had shipped rare-earth-free sunroof motors for German cars. On 13 July HyProMag turned up as a magnet business built on scrap. On 10 July Mint split its critical minerals work into e-scrap and battery businesses. On 31 July Ars Technica reported that the chemistry of electric vehicle batteries and motors leaves a large recycling opportunity inside China itself. Recovery and substitution are the only two routes here that start from material already above ground, and between them they managed seven stories in three months.

The doubts arrived in the same quarter as the money.

Another 14 stories fit none of the chapters above, and most of them watch the effort from outside it. On 30 July the Financial Times reported that hedge funds had raised their bets against US-backed critical minerals companies, worried the rally had run too far. On 7 and 8 July Democratic lawmakers began probing the commerce secretary's role in the $1.6 billion USA Rare Earth deal, and reports said his former firm had helped the company raise private funds in connection with the US government's investment. On 31 May the Financial Times reported that companies trying to boost western supplies face legal and community obstacles over environmental damage. On 26 May an analysis warned critical minerals buyers against building butter mountains and aluminium floods, which is a warning about oversupply written in a quarter about scarcity.

The corporate housekeeping is here too. Cullinan Metals rebranded as Automata Rare Earth and took the ticker AREE. On 11 August Blue Moon Metals agreed to buy 33 tungsten and antimony projects in a $20.5 million cash-and-stock deal. Encounter Resources presented a niobium growth push at Diggers & Dealers. In one quarter a company renamed itself after a rare earth and funds built short positions across the sector. The money has arrived, and the verdict is still out.

The West is short of the middle of the chain, and the quarter's money went mostly to its two ends.

Three things this report can actually say, and each one is a count from the pages above.

Ground is the one thing there is plenty of. Deposits, drill results, licences and staked properties produced 117 stories in three months, the biggest chapter here by a wide margin, and the two items in it that said the most were about a tungsten deposit whose development NASA is blocking and two US-backed rivals fighting in court over alleged technology theft. Both are about the distance between a deposit and a working mine. Finding more ground was the easy part.

The trouble is in the middle. Refining and magnets produced 48 stories between them, the two smallest industrial chapters of the four, and they are the step China holds. The verbs in those chapters are announced, funded, signed, launched, installing and advancing. The refining chapter ends with every plant still on the building site, and the most important story in the magnet chapter is the Pentagon's own suppliers saying on 27 July that they cannot build the capacity before the 1 January 2027 cutoff. Money arriving at a step and capacity arriving at it are two different events, and this quarter shows how far apart they can be.

The news and the share prices pointed opposite ways. All 13 companies in the table come out well in what was reported about them, and we have a share price for 12. Eight of those fell and four lost more than a quarter of their value. Seven came out well in the news and their shares still fell 8% or more. Only one explanation of that gap has a name attached to it, and it is the Financial Times story from 30 July in the chapter above. The funds were short because they thought the rally had run too far. That is what they did and the reason they gave. This report puts the news next to the prices and leaves it there. Nothing here says one caused the other.