Agencies

US-based rare earth firm REalloys believes it has a road map to build a North American supply chain for critical minerals that bypasses China, working with Canadian and Japanese partners – a potential first, though not without risks and challenges.

The Ohio-based company expects to deliver rare earth products, including magnets, in early 2027, using a non-Chinese sourcing strategy that spans metal supply to procurement. In October, it received a letter of interest from the US Export-Import Bank, the official credit agency of the federal government, for a loan worth up to $200 million to finance processing and magnet facilities. REalloys operates a downstream facility for permanent magnets and critical metals in Ohio.

On Monday, it announced a partnership with Canada’s Saskatchewan Research Council, the province’s technology innovation unit.

The firm will invest US$21 million in a processing plant for heavy rare earths, the latest in a string of private sector initiatives aimed at breaking China’s grip on the supply chain.

“Our primary focus is the ability to process materials from a variety of different inputs, and so to somewhat become less tied to any single mine’s production, but [REalloys also] rather [wants to] focus on refining aspects, which is largely not done in North America today,” said Tim Johnston, the firm’s strategic adviser.

Rare earths have become one of Beijing’s biggest levers in its trade war with the US, prompting a scramble to diversify supply chains and reduce reliance on China, which accounts for 88 per cent of the global market share in refined rare earth production and 90 per cent of the magnet supply, according to Morgan Stanley.

In response to this near-monopoly, Washington has stepped up its global hunt for critical minerals, with US President Donald Trump signing a slew of deals during his October trip to Asia.

That included a memorandum of understanding with Malaysia, which already has processing capacity.

On Thursday, the United States also signed an agreement with its allies – Australia, Japan and South Korea – to secure mineral supply chains for artificial intelligence, amid concerns over China’s advances in the emerging technology.

Analysts estimate it could take the US 10 to 20 years to develop a secure, independent supply chain.

Johnston of REalloys said the company had decided to partner with the Saskatchewan Research Council in part because it had spent years developing a midstream process. our exclusive content you’ll need to subscribe.

TRY FOR FREE or UPGRADE Already a subscriber? LOG IN “The more that we can scale out the mining production in North America the better, but our ultimate focus is on separation, refining metal and magnet production.” Over the long term, he said REalloys plans to build a facility 10 times larger than the one in the Canadian province, using the same platform and technology and linking it to the firm’s production facilities in Ohio. Saskatchewan’s processing plant for heavy rare earths had been under construction for two years, he said, adding that the partnership with the Canadian institution would develop a North American- and European-focused procurement strategy for control panels, instrumentation, equipment and other inputs, “completely” moving away from China.

Upstream, REalloys processes materials from around the world and has contracts in place to feed its Canadian facility from both North and South American sources, he added. Separation and refining operations have been “developed in North America with a very extensive programme over the last five years for magnet production,” he said.

“We are working with Japanese vendors [on] actual magnet production.” However, Johnston also acknowledged that sourcing from non-Chinese suppliers remains difficult and risky compared to China, where procuring technology and components is simpler.

REalloys must overcome several challenges in the coming years, including research and development, training technical personnel and managing a plant that processes diverse inputs, he said.

“It was a strategic decision that was made,” he added. “You have to be purposeful in going about this strategy.” While US firms work to diversify supply chains, China has consolidated its dominance far beyond its borders.

Reflecting on this extensive influence and the prospect of a rare earth supply chain independent of Beijing, Johnston admitted “it’s going to take much longer to see that come to full fruition”.

“[It’s] difficult to give you an exact time frame, but it’s not something that will happen immediately.”

The country provided about US$24 billion in aid and credit for “transition minerals” for renewable energy technologies in Africa between 2000 and 2021, making it the continent’s largest financier of mineral projects, according to a report issued on Tuesday by the Africa Centre for Strategic Studies under the US Department of Defence.

“Chinese diplomats frequently negotiate directly with host governments on behalf of Chinese SOEs [state-owned enterprises], maximising leverage and facilitating entry into Africa’s mining belts,” the report’s authors said.

American firms like MP Materials, whose largest shareholder is now the federal government, are also expanding mining, refining and recycling operations in Mountain Pass, California.

Breaking China’s dominance in critical mineral processing faces a host of barriers, however, including high costs and environmental concerns, the scale of commercial production required, challenges obtaining permits and investor uncertainty about project timelines.