US and India Sign Critical Minerals Agreement for Supply Chain Security

[SMM Rare Earth Express] The Ministry of Commerce issued an announcement on June 29, stating that in accordance with the Export Control Law of the People's Republic of China and other laws and regulations, and to safeguard national security and interests as well as fulfill international non-proliferation obligations, it has decided to include 20 entities, including the Defense Research Institute, that are involved in enhancing Japan's military capabilities, on the export control list. Effective immediately, export operators are prohibited from exporting dual-use items to the above-mentioned entities, and organizations and individuals from any country or region are prohibited from transferring or supplying dual-use items originating from China to these entities. Under special circumstances where export is genuinely necessary, an application must be submitted to the Ministry of Commerce. A spokesperson for the Ministry of Commerce stated that this move aims to resolutely curb Japan's reckless moves of "new-type militarism." The entities on the list include the Defense Research Institute, the Ground Equipment Research Institute, the Ship Equipment Research Institute, the Aviation Equipment Research Institute, as well as several enterprises such as Mitsubishi Electric Defense and Space Technology Co., Ltd. and Mitsubishi Heavy Industries Marine Technology Co., Ltd.

Using the Energy Fuels-VAC merger as a lens, this article analyzes the U.S. playbook of acquiring de-risked, international rare earth assets. Despite sovereign backing creating a $110/kg price floor for non-Chinese supply, structural bottlenecks in heavy rare earth refining and limited market share (~15%) mean China’s dominance remains unshaken in the near term.

Taking Energy Fuels' $1.9 billion acquisition of Germany-based VAC as a starting point, this article systematically reviews the US's recent acquisition trajectory for mature international rare earth assets. From taking a controlling stake in the Serra Verde heavy rare earth mine in Brazil and acquiring the UK's LCM alloy plant, to securing capacity from Australia's Lynas, the US is leveraging state capital to bypass lengthy certification cycles through cross-border acquisitions, building a non-China "mining-refining-magnet" supply chain. The article notes that although the $110/kg government price anchor has rewritten project IRR models, Western magnet capacity accounts for only 15% of the global total, and the heavy rare earth closed loop cannot be verified until after 2027, making it difficult to shake China's dominance in the short term.