I. Supply Chain Collaboration and Capacity Layout
European rare earth processor Solvay Group announced two key supply agreements this week, aimed at strengthening rare earth supply chain collaboration between Europe and the US. Its agreement with US magnet manufacturer Noveon involves four rare earth elements—neodymium, praseodymium, dysprosium, and terbium—for manufacturing sintered NdFeB permanent magnets; the agreement with Permag focuses on samarium oxide supply, which will be converted into samarium metal by UK-based Less Common Metals for use in high-temperature resistant magnets. Solvay plans to increase capacity at its La Rochelle plant in France in phases: Pr-Nd and samarium oxide production is expected to commence soon, while dysprosium and terbium production is scheduled to start within 2026. CEO Philippe Kehren noted that the US market, due to stronger fiscal support and higher customer readiness, has become the current focus of cooperation, while Europe still needs to address the issue of a "customer base that guarantees sales volume and price levels." Additionally, Solvay is collaborating with Canada's Cyclic Materials to extract rare earth residues from recycled batteries and magnets, targeting to meet 30% of Europe's rare earth demand by 2030.
Domestic US capacity construction is advancing simultaneously. MP Materials announced it will begin producing heavy rare earth elements by mid-2026, with an annual capacity of approximately 200 mt of dysprosium and terbium, to support its plan for an annual production of 10,000 mt of NdFeB magnets. The company's Pr-Nd oxide production reached 721 mt in Q3, up 21% QoQ, and it expects to return to profitability in Q4. US rare earth magnet manufacturer Noveon has an annual capacity of 2,000 mt (expandable to 10,000 mt) and plans to build a new plant in South Korea, with customers including enterprises like Denso and General Motors.
II. Resource Development and Project Breakthroughs
In the resource development sector, US critical minerals developer Critical Metals' Tanbreez rare earth project in Greenland obtained a key environmental permit, clearing a major regulatory hurdle before production. The project is expected to produce 85,000 mt of rare earth concentrate annually at full operation, with production anticipated to start in 2026. Meanwhile, deep-sea rare minerals company applied to the US National Oceanic and Atmospheric Administration for a seabed exploration permit, aiming to develop Pacific rare earth resources. This move follows the US-Japan agreement on the Minamitorishima deep-sea rare earth cooperation plan, reflecting increased Western attention to non-traditional rare earth sources.
Capital markets responded positively to rare earth projects. Critical Metals' stock price rose over 64% year-to-date and surged 176% in the past three months; recent US government equity investments in mining companies like Trilogy Metals further stimulated speculative enthusiasm for rare earth concept stocks.
III. Low-Carbon Technology and Circular Economy
On the technological innovation front, Australian rare earth producer Lynas is collaborating with electrochemical technology company Solidec to deploy a pilot project for on-site hydrogen peroxide generation at its Australian plant. The technology only requires water, electricity, and air, reducing the carbon footprint of rare earth processing by 90%, and aims to address chemical supply chain bottlenecks in rare earth production. Additionally, Australian rare earth company Ionic Rare Earths signed a memorandum of understanding with US Strategic Metals, planning to build a recycling facility in Missouri to extract magnetic rare earth oxides such as neodymium and praseodymium from secondary resources, further strengthening the circular supply chain layout.
IV. Geopolitical Policies and Market Impact
China recently strengthened export controls on rare earth items and related technologies, requiring that re-exports of products containing Chinese rare earth components overseas must obtain a license, and explicitly incorporating technology controls into the policy. This has already driven up overseas rare earth prices; for example, the price of dysprosium metal rose from $335/kg to $780/kg, and is expected to potentially exceed $900/kg in the near future. The EU faces a significant gap in rare earth processing capacity, with internal processing in 2024 meeting only 38% of demand, while rare earth trade between the US and Australia increased by 67% YoY, reflecting an accelerated diversification of Western supply chains.
The US is driving supply chain restructuring through both policy and capital. The Trump administration invested in enterprises such as MP Materials and Critical Metals, and set a floor price for rare earth purchases; the US and Australia signed an $8.5 billion rare earth agreement, including the construction of refining facilities in Australia and funding from the US Department of Defense for a gallium refinery. These measures highlight the US strategic shift from "filling gaps through imports" to "filling gaps through mining within controlled areas."
