Bloomberg Businessweek ICYMI: The Business of Rare Earth Materials in the US
Apr 23, 2025
Joshua Ballard, CEO of USA Rare Earth, sheds light on the crucial yet challenging landscape of rare earth materials in the U.S. He details the heavy reliance on China for processing and the implications of recent export controls. Discussion points also include the intricacies of building a domestic supply chain, efforts to establish a pilot plant in Texas, and the strategic shift towards magnet manufacturing. Ballard emphasizes the pressing need for the U.S. to develop its capabilities in this vital sector, especially amidst rising geopolitical tensions.
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China's Supply Chain Dominance
- China dominates the rare earths supply chain globally, controlling over 98% of heavy rare earth processing.
- The U.S. is currently highly reliant on imports and has minimal domestic production and refining capacity.
US Magnet Market Demand
- The global magnet market uses around 250,000-300,000 tons annually, with the U.S. consuming about 25-30%.
- USA Rare Earth's facility will produce up to 5,000 tons of magnets, a significant domestic contribution.
Higher US Manufacturing Costs
- Producing rare earth magnets in the U.S. costs roughly double compared to China.
- Higher costs stem from lack of domestic supply chain, greater logistics, overhead, labor, and regulatory expenses.