Slow Progress in Overseas Rare Earth Mining Spurs Corporate Shift to Recycling【SMM Analysis】

Against the backdrop of the current US-China rivalry, China's export control policies on rare earths have prompted Western countries to deeply recognize the strategic importance of rare earth elements. To reduce their reliance on China, the West is actively attempting to build a complete rare earth industry chain, from mining to magnet manufacturing. However, the development cycle for rare earth resources is lengthy, and China holds an absolute technological advantage and economies of scale in rare earth mining, separation, and smelting. This makes it extremely difficult for the West to achieve breakthroughs in the industry chain in the short term, unable to meet their urgent immediate needs.

Confronted with this dilemma, Western enterprises and governments are channeling more resources into the field of rare earth recycling, viewing it as a crucial pathway to alleviate short-term supply pressures and enhance supply chain resilience. Several companies have begun deploying strategies to recover rare earth elements from waste materials such as discarded electronic products and industrial magnets, attempting to compensate for the shortfall in raw material supply through a circular economy model.

Recently, recycling companies including the US-based HyProMag, Australia's IonicRE, and Canada's Cyclic Materials have entered into new raw material supply and technical cooperation agreements with industry chain partners, driving the transition of rare earth recycling from pilot projects to commercial scale.

These collaborations cover multiple stages, from scrap collection and technical processing to high-end magnet production, aiming to significantly increase the rare earth recovery rate from the current level of less than 1%.

In June, a US-India joint venture launched a magnet recycling project aimed at improving the efficiency of ReElement chromatographic separation technology. The project is expected to process 2,000 metric tons per year of retired magnets from electric vehicles and wind power equipment, with a projected recovery rate of up to 90%.

In the following months, the rare earth recycling strategy led by US companies gradually became clearer and more established. HyProMag expanded the scope of its raw material agreements to include new sources such as electric motors and wind turbine rotors. The company formed a joint team with electronics recycler ILS to accelerate procurement progress at its Fort Worth, Texas plant. Over its 40-year operational period, the plant plans to recycle 750 metric tons of sintered NdFeB magnets and 807 metric tons of NdFeB by-products annually. HyProMag also plans to expand its operations to Nevada and South Carolina using a hub-and-spoke model, aiming to triple its recycling capacity. Australia's IonicRE has signed an agreement with US Strategic Metals (USSM) to produce rare earth oxides using recycled magnets. IonicRE will provide recycling technology through its UK subsidiary Ionic Technologies to produce Pr-Nd oxide and heavy rare earth elements (dysprosium, terbium, samarium, gadolinium, and holmium) with a purity exceeding 99.5%.

Canada's Cyclic Materials has entered into an exclusive ten-year agreement with German magnet producer VAC to specifically handle magnet production scrap from VAC's new plant in Sumter, South Carolina.

Cyclic Materials expects its recycling process to reduce carbon emissions by 75% compared to raw ore mining. The company is constructing a facility in Mesa, Arizona, with an annual processing capacity of 25,000 mt of scrap magnets, which is expected to commence operations in early 2026. Rare earth supply security has become a strategic priority for the US and European countries.

The EU's Critical Raw Materials Act requires that 15% of the EU's rare earth capacity be achieved through recycling by 2030. This policy direction provides clear market expectations and development momentum for European rare earth recycling enterprises.

The US is actively promoting the development of the rare earth recycling industry, primarily motivated by the desire to reduce dependence on rare earths from a single country, establish a multi-channel rare earth supply landscape, and safeguard the expansion of key industries such as military applications.

A rare earth recycling plant, jointly established by France and Japan in Lacq, France, is expected to produce 800 mt of light rare earths and 600 mt of heavy rare earths annually upon commissioning, accounting for approximately 15% of global production. This output will meet about 20% of Japan's future demand for dysprosium and terbium.

Rare earth recycling technology continues to advance, evolving from traditional hydrometallurgy toward more efficient and environmentally friendly methods. The EU's "nano-droplet emulsion separation" technology requires only hundreds of purification steps and achieves 95% selectivity. The HyProMag project, a collaboration between the UK and Germany, uses hydrogen processing technology to recover NdFeB magnets from electronic waste with a purity exceeding 99%. Meanwhile, industrial collaboration models for rare earth recycling are also being innovated.

The cooperation between Cyclic and VAC has established a closed-loop model of "production-recycling-reproduction." This partnership not only addresses the issue of scrap treatment but also provides a stable source of raw materials for new magnet production, reducing risks across the entire supply chain. The sustainable procurement requirements for rare earth magnets from end-users such as automakers like General Motors have further driven the development of the recycling industry. VAC's Sumter plant will prioritize supplying magnets for multiple EV models of General Motors over the next decade, and such long-term collaborations ensure demand stability for the recycling industry.

Currently, overseas rare earth recycling, much like mining at the ore end, is still in the early stages of technological research and exploration, with commercial operations still a long way off. Coupled with various variables such as international politics, the rare earth recycling industry may seem distant and elusive. However, as global industrial technology continues to advance, rare earth recycling will gradually move forward.