The U.S. is at a critical juncture in the race to secure a domestic supply chain for rare earth elements (REEs). While rare earth mining has seen some resurgence, the country still faces a major bottleneck in secondary processing – the step where rare earth oxides (REOs) are converted into metals, alloys, and magnets for high-tech applications. As global supply chains remain vulnerable to geopolitical tensions and export restrictions, strengthening domestic rare earth refining and processing has become an urgent priority.

Current Challenges in U.S. Secondary Processing

1. Dependence on China for Refining & Processing

• China currently dominates over 85% of global rare earth refining and secondary processing.
• Even when rare earths are mined in the U.S. (e.g., at Mountain Pass, CA), they are often exported to China for processing due to the lack of domestic facilities.
• This dependence leaves the U.S. vulnerable to export restrictions and geopolitical risks, as seen in previous trade disputes.

2. Lack of Processing Infrastructure

• The U.S. lacks commercial-scale metallurgical facilities capable of refining REOs into usable metals and alloys.
• Unlike China, which has invested heavily in vertically integrated supply chains, the U.S. remains fragmented.
• The high capital costs and regulatory hurdles for new refining facilities slow down progress.

3. Environmental and Regulatory Barriers

• Traditional rare earth processing methods can produce radioactive and toxic waste, leading to strict environmental regulations.
• While China has historically been more lenient on pollution control, the U.S. must develop cleaner, more sustainable processing methods.

4. Limited Domestic Demand for Processed Rare Earths

• Many U.S. manufacturers rely on imported rare earth alloys and finished components rather than refining them domestically.
• The absence of major domestic magnet production means that even if the U.S. processes rare earths, downstream demand remains uncertain.

Future Outlook: What Needs to Happen?
To fully establish a domestic rare earth processing industry, the U.S. must address several key areas:

1. Increase Processing Capacity

• More investments are needed in refining, metal-making, and magnet production.
• Partnerships between the government, private sector, and research institutions can accelerate progress.

2. Develop a Circular Economy for Rare Earths

• Expanding rare earth recycling from old electronics, wind turbines, and EV motors can reduce reliance on mining.
• New recycling technologies can help recover rare earths from end-of-life products.

3. Strengthen U.S. Magnet Manufacturing

• Without domestic permanent magnet production, raw rare earth metals will still need to be exported for magnet fabrication.
• The U.S. must support high-tech magnet manufacturers to close the supply chain gap.

4. Improve Regulatory Efficiency Without Sacrificing Sustainability

• Streamlining permitting processes while maintaining environmental safeguards can encourage new processing projects.
• Supporting low-waste and energy-efficient technologies will make domestic processing competitive with global players.

Conclusion
The U.S. is making strides in secondary rare earth processing, but more investment, policy support, and technological advancements are needed to achieve self-sufficiency. By reshoring refining and manufacturing, strengthening sustainable processing methods, and fostering a domestic supply chain, the U.S. can secure its future in the global rare earth market and reduce dependency on foreign sources. The path ahead requires collaboration across government, industry, and research institutions – but the momentum is building toward a stronger, more resilient rare earth ecosystem.