China's rare earth restrictions hit US missile magnet production

Key Points:

• Phoenix Tailings, a small refinery in New Hampshire, is expanding with a $500 million Pentagon loan to increase domestic production of critical minerals, aiming to reduce U.S. reliance on China for rare-earth processing essential to defense systems.
• The company extracts valuable elements like neodymium and samarium from mining waste and recycled materials, with plans to boost production capacity from 200 kilograms to 120 tons by 2028 to meet growing defense and industrial demand.
• U.S. defense contractors face challenges due to stricter White House rules banning sourcing critical minerals from China, amid urgent military needs driven by conflicts such as the war in the Middle East that deplete munitions stockpiles.
• Other U.S. companies, like Arnold Magnetic Technologies, are sourcing rare earths from European suppliers such as Solvay in France to diversify supply chains, despite higher costs compared to Chinese sources.
• Experts warn that some critical minerals, like tungsten, remain heavily dependent on Chinese imports, and ramping up U.S. production will take years, necessitating reliance on existing inventories and recycling in the short term.