Geopolitical realignment, major deals, and new U.S. policy moves are rapidly transforming the rare earths and critical minerals landscape for batteries, energy, and defense.
At a glance – The past 24 hours have seen a surge in activity across the rare earths and critical minerals sector, with the United States emerging as the central force in a global effort to break China’s longstanding dominance. Major deals announced this week span five continents and include upstream offtake agreements, new funding vehicles, and landmark downstream acquisitions. These moves are underpinned by government financing and strategic partnerships, all aimed at accelerating the development of a resilient mine-to-magnet ecosystem outside China. The market is rewarding these efforts, with equities and strategic partners involved in these deals seeing improved valuations as the perceived “China risk” diminishes. However, experts caution that true supply chain resilience—especially in refining and magnet production—remains several years away, underscoring the need for a comprehensive industrial policy that fuses innovation, private capital, and defense imperatives into a coherent national strategy.
Technology advance – In a significant policy shift, MP Materials has confirmed new investments in heavy rare earth element (HREE) separation at its Texas facility and the forthcoming 10X Facility. While Mountain Pass is primarily rich in light rare earths, the company is now targeting the separation of critical heavy rare earths like dysprosium and terbium, essential for high-temperature magnets used in defense applications. China still controls nearly 90% of HREE extraction and almost all downstream processing, and recent export restrictions have sent prices for key elements soaring. The U.S. Department of Defense’s direct investment in MP Materials marks a move away from treating rare earths as mere commodities, instead recognizing them as strategic assets requiring long-term public support. This approach—anchored by price floors and long-term offtake agreements—signals a new era of government intervention designed to secure the supply of materials vital for advanced energy and defense technologies.
Partnerships – The United States has offered to buy equity stakes in Australian critical minerals companies as part of a broader funding package to expand supply and reduce reliance on China. This initiative was revealed following a high-level Australian delegation’s meetings with senior U.S. administration officials, including those from the National Security Council and International Trade Administration. The U.S. is encouraging companies to submit proposals for funding through various channels, signaling a willingness to underwrite the development of alternative supply chains for lithium, cobalt, and rare earths. These minerals are essential for clean energy, semiconductors, and weapons manufacturing. The move comes as China has responded to U.S. tariffs by restricting exports of rare earths and permanent magnets, directly impacting U.S. and European manufacturers. The U.S.-Australia collaboration is expected to accelerate the development of new mines and processing plants, particularly in Western Australia, further diversifying global supply chains.
Acquisitions/expansions – This week’s standout deal is the $700 million capital market financing secured by Energy Fuels, alongside a landmark downstream acquisition by USAR of LCM. Additionally, CVMR has launched a $42 billion funding vehicle targeting critical minerals projects in Africa, signaling a major expansion of capital flows into upstream and midstream assets. These transactions are part of a broader trend of ex-China alliances and innovative contract structures designed to secure the entire supply chain from mine to finished product. The Pakistan-U.S. midstream partnership announced this week further exemplifies the geopolitical realignment underway, as countries seek to insulate their industries from supply disruptions and price shocks. Investors are closely watching for concrete project milestones, such as new refinery groundbreakings and pilot plant results, which will be critical in translating these financial commitments into tangible supply chain resilience.
Regulatory/policy – The U.S. government is investing billions to strengthen its critical minerals supply chain and reduce dependence on China. Recent policy initiatives include the establishment of new funding channels, direct equity investments, and the creation of strategic reserves for key minerals. The Department of Defense’s evolving role—from passive buyer to active investor—reflects a broader recognition of the national security implications of critical mineral supply chains. Policymakers are also exploring the introduction of price floors and long-term offtake agreements to stabilize markets and incentivize domestic production. However, experts warn that extending such measures to larger or less defense-critical commodities may require significantly greater taxpayer funding and could face political resistance. The coming months will test the effectiveness of these policies as the U.S. and its allies seek to build a more self-reliant and transparent critical minerals ecosystem.
Finance/business – Financial markets have responded positively to the recent wave of deals and policy announcements, with rare earth equities and strategic partners seeing improved valuations. The diminished “China risk” is being priced in as investors gain confidence in the ability of Western and allied nations to secure alternative supply chains. Major capital commitments, such as Energy Fuels’ $700 million raise and CVMR’s $42 billion African fund, underscore the scale of investment flowing into the sector. However, analysts caution that the real test will come as these projects move from financing to execution. The core bottlenecks—particularly in separation and refining—remain formidable, and the ability to produce magnets at scale is still unproven outside China. Market participants are closely monitoring progress on new refineries, pilot plants, and definitive offtake contracts, which will be essential for delivering the foundation of a secure, high-tech future for batteries, energy systems, and defense supply chains.
Sources: Rare Earth Exchanges, energypolicy.columbia.edu, mining.com, shalemag.com, Reuters, company press releases
