A small Northern Ontario community is set to play a major role in North America’s clean energy future.
Electra Battery Materials is moving forward with plans to build North America’s first battery-grade cobalt refinery in Cobalt, Ont., with commercial operations expected to begin by the end of 2027. Once operational, the facility will produce up to 6,500 tonnes of cobalt sulfate annually—enough to supply approximately one million electric vehicle batteries each year.
A milestone for North America’s battery industry
The refinery will be the first of its kind in North America and only the second battery-grade cobalt refinery outside China. The project marks a significant step toward strengthening the continent’s critical mineral supply chain as demand for electric vehicles, energy storage systems and advanced technologies continues to grow.
Electra says the refinery will process cobalt hydroxide sourced from the Democratic Republic of the Congo (DRC), with the material shipped through South Africa and Montreal before being refined in Canada.
Reducing reliance on China
China currently dominates global cobalt refining, processing more than 75 per cent of the world’s supply. By establishing refining capacity in Canada, the project aims to diversify supply chains and improve North America’s access to a mineral considered essential for electric vehicles, consumer electronics and defence technologies.
Electra CEO Trent Mell says critical minerals have become increasingly important not only for transportation and renewable energy, but also for national security.
The refinery has received financial support from both the Canadian and U.S. governments, reflecting growing efforts to build more resilient domestic supply chains for critical minerals.
Industry sees both opportunity and challenges
While demand for cobalt is expected to increase, some industry experts note that evolving battery technologies could reduce future dependence on the metal. Others point to ongoing concerns surrounding cobalt mined in the DRC, particularly related to human rights and responsible sourcing.
Electra says it is committed to responsible procurement practices and believes cobalt will remain a critical material, particularly as demand grows in defence applications alongside the electric vehicle market.
A new chapter for the town of Cobalt
The refinery also represents an economic transformation for the historic mining community of Cobalt. Once one of the world’s leading silver-producing regions following the area’s famous 1903 discovery, the town is now positioning itself as a key hub in North America’s battery materials industry.
Although commercially viable local cobalt reserves have yet to be developed, the new refinery could help establish Cobalt as an important processing centre, supporting Canada’s broader strategy to strengthen its critical minerals sector and secure the supply chain for next-generation technologies.
The United States is taking a major step toward strengthening its domestic supply chain for critical minerals, with the U.S. Army announcing landmark agreements with four mining and materials companies to build mineral processing facilities on military bases across the country.
The initiative, announced by the Pentagon, represents the first program of its kind under the Trump administration aimed at reducing America’s dependence on foreign sources for strategically important minerals that are essential for defense, clean energy, and advanced manufacturing.
Four Companies Selected
The U.S. Army has signed agreements with:
REalloys Inc. – Rare earth minerals processing
Titan Mining Corp. – Graphite processing
ioneer Ltd. – Lithium processing
EnergyX – Boron processing
These facilities will process minerals that are considered vital to national security, supporting everything from military weapons systems and electronics to electric vehicle batteries and renewable energy technologies.
Strengthening America’s Supply Chain
Critical minerals such as rare earth elements, lithium, graphite, and boron play an increasingly important role in modern industries. However, the United States has long relied on imports—particularly from China—for much of its processing capacity.
By locating processing plants on military installations, the Pentagon aims to accelerate domestic production while enhancing the resilience of U.S. supply chains. The strategy also aligns with broader efforts to ensure reliable access to materials needed for defense readiness during periods of geopolitical uncertainty.
Why It Matters
The global competition for critical minerals has intensified as countries race to secure resources needed for electric vehicles, semiconductors, renewable energy infrastructure, and advanced defense technologies.
The Army’s new partnerships could help:
Reduce dependence on foreign mineral processing.
Strengthen U.S. national security.
Support domestic manufacturing and job creation.
Build a more resilient supply chain for emerging technologies.
Increase America’s competitiveness in the global critical minerals market.
A Strategic Investment
While the agreements focus on processing rather than mining, experts view processing capacity as one of the most significant bottlenecks in the global critical minerals supply chain. Expanding domestic processing capabilities could allow the United States to capture more value from both domestic and allied mineral resources.
As demand for critical minerals continues to grow, this first-of-its-kind initiative signals a long-term commitment to building a secure and independent supply chain that supports both economic growth and national defense.
Looking Ahead
The Pentagon’s partnerships with REalloys, Titan Mining, ioneer, and EnergyX mark an important milestone in America’s strategy to secure access to critical minerals. If successful, the initiative could serve as a model for future public-private partnerships aimed at strengthening the nation’s industrial base and reducing strategic vulnerabilities in global supply chains.
With geopolitical competition intensifying and demand for critical minerals expected to rise sharply over the coming decades, investments like these may become increasingly central to U.S. economic and national security policy.
China has concluded the 14th Five-Year Plan period (2021–2025) with remarkable achievements in science, technology, and innovation. According to a report released by the National Bureau of Statistics, the country has significantly strengthened its innovation ecosystem, accelerated breakthroughs in strategic technologies, and deepened the integration of innovation across economic and social development.
From record investments in research and development to advancements in aerospace, artificial intelligence, and digital transformation, China’s progress demonstrates the growing role of science and technology as a driver of high-quality growth.
Rising Investment Fuels Innovation
One of the most notable achievements during the past five years has been the steady increase in research and development (R&D) investment.
China’s R&D expenditure grew from RMB 2.44 trillion in 2020 to RMB 3.93 trillion in 2025, representing an average annual growth rate of 10 percent. At the same time, R&D intensity—the proportion of R&D spending relative to GDP—increased from 2.36 percent to 2.80 percent, surpassing the average level of OECD countries.
The country also continued to expand its scientific workforce. Full-time R&D personnel increased from 5.24 million person-years in 2020 to 7.95 million person-years in 2025, maintaining China’s position as the global leader in R&D talent for 13 consecutive years.
The commercialization of research has also accelerated. The value of technology contracts nationwide rose sharply from RMB 2.8 trillion to RMB 7.6 trillion, highlighting stronger links between scientific discovery and industrial application.
Breakthroughs in Strategic Technologies
The 14th Five-Year Plan period witnessed major advances in frontier science and key technologies.
China established 77 national major scientific and technological infrastructure projects, many of which have reached internationally advanced standards. Significant progress was made in areas including:
Quantum information science
Artificial intelligence
Life sciences
Deep-sea exploration
Deep-earth research
Deep-space exploration
The country also achieved important milestones in semiconductor development, operating systems, and LiDAR technologies, strengthening its technological self-reliance in critical sectors.
Several landmark projects symbolize these achievements:
The Tiangong Space Station entered full operation and application.
The domestically developed C919 large passenger aircraft began regular commercial operations.
The “Mengxiang” deep-ocean drilling vessel was successfully commissioned.
These accomplishments demonstrate China’s growing ability to develop and deploy cutting-edge technologies at scale.
Building New Quality Productive Forces
Innovation has increasingly become the foundation of China’s industrial transformation.
By the end of 2025, the country had cultivated:
More than 600,000 technology and innovation-focused SMEs
504,000 high-tech enterprises
Over 140,000 specialized and sophisticated SMEs
Digital transformation has also accelerated across industries. Nearly 90 percent of industrial enterprises above designated size had completed digital transformation initiatives by the end of 2025.
Meanwhile, the “three new” economy—consisting of new industries, new business formats, and new business models—accounted for 18.01 percent of GDP in 2024, representing a significant increase compared with 2020.
China’s digital economy continued to expand, reaching 33.1 percent of GDP in 2024. The country also led the world with 101 “lighthouse factories,” globally recognized manufacturing facilities that showcase advanced digital and intelligent production capabilities.
Innovation Delivering Real-World Benefits
The impact of technological progress extends far beyond laboratories and factories.
Industrial robots are now deployed across 71 major industrial sectors, with China’s robot density significantly exceeding the global average. In the energy sector, the country accounts for more than half of the world’s installed new energy storage capacity.
Agricultural modernization has also accelerated, with the contribution rate of agricultural technological advancement surpassing 64 percent in 2025.
In healthcare, digital innovation has improved accessibility and efficiency. Remote medical service networks now cover every city and county nationwide, while cross-provincial direct settlement systems for medical expenses have benefited more than 560 million patient visits.
These developments illustrate how innovation is improving productivity, sustainability, and quality of life across society.
Looking Ahead: The 15th Five-Year Plan
As China enters the 15th Five-Year Plan period (2026–2030), the focus is shifting from building innovation capacity to maximizing innovation efficiency.
The latest report emphasizes the need to:
Deepen reforms in the science and technology system
Improve the efficiency of innovation ecosystems
Strengthen high-level technological self-reliance
Accelerate the development of new quality productive forces
Foster deeper integration between technological innovation and economic growth
With a stronger research base, world-class infrastructure, growing digital capabilities, and a thriving innovation ecosystem, China is positioning itself to play an increasingly influential role in shaping the future of global science and technology.
Conclusion
The achievements of the 14th Five-Year Plan demonstrate a significant leap in China’s scientific and technological capabilities. Increased R&D investment, expanding talent resources, breakthroughs in strategic technologies, and widespread digital transformation have collectively strengthened the nation’s innovation-driven development model.
As the next five-year period begins, China’s continued commitment to science, technology, and innovation is expected to serve as a key engine for sustainable economic growth, industrial modernization, and improved public well-being.
The Democratic Republic of Congo (DRC) is no longer content with being merely the world’s largest cobalt supplier. Through a combination of export controls, strategic partnerships, and geopolitical repositioning, Kinshasa is transforming its role from resource provider to market maker.
The implications extend far beyond commodity markets. Congo’s evolving cobalt strategy is influencing global supply chains, altering China’s dominance in critical minerals, and creating new opportunities for Western investors seeking secure access to strategic resources.
From Price Taker to Price Setter
For years, Congo’s vast cobalt reserves fueled global battery production while the country remained vulnerable to commodity price cycles and foreign influence. That dynamic is changing.
Since imposing cobalt export restrictions in early 2025, Congo has steadily tightened control over the flow of the metal. A complete export ban eventually gave way to a quota system, but the impact on global supply has been profound.
China, historically the dominant buyer of Congolese cobalt, has seen imports collapse. Customs data show that Chinese imports of Congolese cobalt intermediates during the first four months of 2026 were only a fraction of the volumes recorded during the same period a year earlier.
The result has been a dramatic tightening of supply. Cobalt prices have more than doubled from pre-restriction levels, while unusual pricing patterns have emerged throughout the supply chain. Cobalt hydroxide—the primary form exported from Congo—has at times traded at prices equal to or even above refined cobalt metal, highlighting growing concerns about access to raw material.
What initially appeared to be a temporary supply disruption increasingly looks like a structural shift. Market participants are beginning to attach a premium to cobalt sourced from Congo, reflecting both scarcity and strategic importance.
Reducing Dependence on China
Perhaps the most significant aspect of Congo’s strategy is its attempt to diversify away from overwhelming dependence on Chinese operators.
China has spent decades building a dominant position in Congolese mining and refining. Chinese companies control many of the country’s largest cobalt and copper assets, while Chinese refiners process much of the world’s cobalt supply.
Now, however, Kinshasa appears determined to rebalance those relationships.
Recent developments suggest growing momentum behind Western investment initiatives. U.S.-based critical minerals platform Virtus Minerals recently acquired the copper and cobalt assets of Chemaf, positioning itself to revive operations that have faced years of uncertainty.
At the same time, Congo’s state-backed Entreprise Générale du Cobalt (EGC) has entered into agreements with commodity trader Trafigura and U.S. startup EVelution to support a proposed cobalt refinery in Arizona. Such projects could create direct links between Congolese mines and American manufacturing, reducing reliance on Chinese processing capacity.
These developments align closely with broader U.S. efforts to secure critical mineral supply chains amid intensifying competition with China.
Infrastructure Creates New Options
Infrastructure is playing a crucial role in Congo’s westward pivot.
The Lobito Atlantic Railway, backed by Western governments and investors, is emerging as a strategic alternative export route. Connecting the Congolese copper belt to Angola’s Atlantic port of Lobito, the corridor provides access to global markets without relying exclusively on transport networks historically aligned with Chinese interests.
The railway has become a symbol of a larger geopolitical contest over critical minerals. Control over extraction matters, but so does control over logistics, processing, and market access.
For Western investors, the corridor offers a practical pathway for moving minerals to Europe and North America. For Congo, it provides leverage and flexibility.
Solving the Artisanal Mining Challenge
Despite these opportunities, one major obstacle remains: artisanal and small-scale mining (ASM).
Artisanal miners produce a significant share of Congo’s cobalt, but the sector has long been associated with unsafe working conditions, child labor concerns, and informal trading networks. These issues have discouraged many Western buyers from sourcing Congolese cobalt directly.
The government understands that expanding access to Western markets requires stronger assurances around responsible sourcing.
To address this challenge, EGC has partnered with commodity trader Mercuria to establish what is being described as a “gold standard” framework for ethical artisanal cobalt production at the Kasulo mining site.
Success is far from guaranteed. Previous efforts to formalize the artisanal mining sector have delivered mixed results. However, creating a transparent and verifiable supply chain is essential if Congo hopes to attract Western customers seeking ethically sourced critical minerals.
The stakes are high. Without credible solutions, concerns over “blood cobalt” could continue limiting market access regardless of supply shortages.
Growing Leverage in a Tightening Market
Congo’s position is being strengthened by supply disruptions elsewhere.
Several competing sources of cobalt face challenges. Canadian producer Sherritt International’s refining operations have come under pressure from U.S. sanctions affecting its Cuban partnerships. Madagascar’s Ambatovy nickel-cobalt project suffered cyclone-related disruptions and is undergoing ownership changes. Meanwhile, Indonesian producers are grappling with tighter mining quotas and processing constraints.
These developments further increase Congo’s influence over a market where it already accounts for more than 70% of global mine production.
In other words, there are few realistic alternatives.
A New Strategic Role
The broader story is not simply about higher cobalt prices. It is about a country leveraging its resource dominance to reshape its geopolitical position.
By restricting exports, encouraging Western investment, developing alternative infrastructure, and attempting to formalize artisanal production, Congo is seeking greater control over both its resources and its future.
Whether the strategy succeeds remains uncertain. Balancing relationships with China while attracting Western capital will require careful diplomacy. Reforming the artisanal mining sector will be difficult. And sustaining investor confidence will depend on political stability and regulatory consistency.
Yet one thing is increasingly clear: Congo is no longer just supplying the global cobalt market. It is actively redefining it.
As demand for batteries, electric vehicles, defense technologies, and advanced electronics continues to grow, Congo’s decisions will have an outsized influence on the future of critical minerals. The country is emerging not merely as a producer of cobalt, but as one of the most important strategic players in the global race for resources.
This version is designed for a business, commodities, mining, or geopolitical affairs audience and is fully original rather than a rewrite of the Reuters text.
The global race for critical minerals has entered a new and potentially volatile chapter. China has imposed new restrictions on exports of key rare-earth materials to major U.S. companies, directly targeting efforts by Washington to rebuild domestic supply chains for strategically important magnets and advanced technologies.
The decision signals a significant escalation in the ongoing competition between the world’s two largest economies and highlights how critical minerals have become a powerful geopolitical tool.
Why Rare Earths Matter
Rare-earth elements are essential ingredients in a vast array of modern technologies. They are used in:
Electric vehicles
Wind turbines
Military drones
Advanced defense systems
Artificial intelligence hardware
Consumer electronics
Industrial machinery
While many countries possess rare-earth deposits, China dominates the global processing and refining industry. It supplies approximately 90% of the world’s light rare earths and refines more than 98% of heavy rare earths—materials that are particularly important for high-performance magnets and advanced technologies.
This dominance has given Beijing considerable leverage over global supply chains.
China’s New Restrictions
China’s Ministry of Commerce announced that ten American companies will face new restrictions on purchasing certain dual-use products from Chinese suppliers. Among the affected organizations are two of the most important players in the U.S. rare-earth sector:
MP Materials
USA Rare Earth
Both companies are central to the U.S. government’s strategy to reduce dependence on Chinese supplies.
The restrictions cover several critical rare-earth metals, including heavy rare earths such as dysprosium and terbium. These materials are essential for producing heat-resistant magnets used in electric motors, automotive systems, military applications, and industrial equipment.
A Blow to U.S. Supply Chain Ambitions
The timing is particularly significant.
Over the past several years, the U.S. government has invested heavily in rebuilding domestic rare-earth production capabilities. The Department of Defense and other federal agencies have directed hundreds of millions of dollars toward developing mining, refining, and magnet manufacturing infrastructure.
MP Materials operates the Mountain Pass mine in California, the largest rare-earth mining operation in the United States. The company is also constructing magnet manufacturing facilities in Texas designed to serve both commercial and defense customers.
Meanwhile, USA Rare Earth has been rebuilding domestic manufacturing capacity in Oklahoma and pursuing international partnerships to secure alternative supplies of critical minerals.
The new Chinese restrictions create additional obstacles for these efforts by limiting access to the materials needed during the industry’s transition period.
The Dysprosium Challenge
One of the most pressing concerns involves dysprosium, a heavy rare-earth element used to improve magnet performance under high temperatures.
Industry data indicates that Chinese shipments of dysprosium to the United States have effectively stopped since April 2025. The material is crucial for components found in:
Power steering systems
Braking systems
Electric motors
Aerospace applications
Defense technologies
Manufacturers can partially substitute dysprosium with terbium, but supplies of terbium have also become extremely limited.
Without reliable access to these materials, scaling domestic magnet production becomes significantly more difficult.
Global Concerns Growing
The latest move comes as governments worldwide seek to diversify critical mineral supply chains.
At the recent G7 summit, leaders pledged to reduce dependence on any single supplier and outlined a goal that no more than 60% of rare-earth imports should come from one country by 2030.
However, achieving that objective will be challenging. Building new mines, processing facilities, and refining operations requires years of investment, environmental approvals, technical expertise, and substantial capital.
Even promising projects in Australia, Brazil, Canada, and the United States remain far from matching China’s current production capacity.
Trade Tensions Could Reignite
The restrictions also threaten to reignite trade tensions between Washington and Beijing.
Although previous diplomatic discussions included conversations about maintaining access to critical minerals, progress has been limited. China’s latest action demonstrates that rare-earth exports remain a powerful strategic lever that can be deployed during periods of economic or political disagreement.
For U.S. policymakers, the message is clear: securing resilient supply chains for critical materials has become a national security priority rather than simply an economic objective.
Looking Ahead
China’s decision underscores a broader reality shaping the global economy. Control over critical minerals is increasingly becoming as important as control over energy resources was in previous decades.
As nations compete to secure supplies for electric vehicles, renewable energy, advanced computing, and defense systems, rare earths are likely to remain at the center of geopolitical negotiations and trade disputes.
For American manufacturers, the challenge now is accelerating efforts to develop alternative sources while navigating a market where China continues to hold overwhelming influence.
The outcome of this struggle may help determine not only the future of global trade but also which nations lead the next generation of technological innovation.
This version is optimized for a business, technology, or geopolitics audience and is written to avoid copyright concerns by presenting original analysis and structure rather than reproducing the source article.
The United States has taken a significant step toward securing access to one of Africa’s most valuable untapped mineral resources through a preliminary agreement with Kenya involving the Mrima Hill rare earth and niobium deposit, estimated to be worth $62.4 billion (Sh9.7 trillion).
The proposed partnership represents a major geopolitical and economic development, as Washington strengthens its position in the global competition for critical minerals—an arena where China has long maintained a dominant influence.
A New Model for Resource Development
Announced by Kenyan President William Ruto during the G7 Summit, the agreement is centered on the mineral-rich Mrima Hill site in Kwale County. Unlike traditional extractive arrangements that focus on exporting raw materials, the deal is expected to require that strategic minerals be processed within Kenya before entering global markets.
This approach aligns with Kenya’s broader objective of increasing local value addition, creating jobs, and capturing a greater share of the economic benefits generated by its natural resources.
According to President Ruto, discussions with the United States are already at an advanced stage and could soon result in a formal agreement.
“We have agreed that the minerals will be processed in Kenya,” Ruto stated, emphasizing a shared commitment to local industrial development rather than the export of unprocessed resources.
Critical Minerals at the Center of Global Competition
The agreement comes amid an intensifying global race for access to critical minerals essential for clean energy technologies, advanced manufacturing, electronics, and defense systems.
Rare earth elements and niobium are key components in electric vehicles, renewable energy infrastructure, semiconductors, and high-performance industrial applications. As demand continues to grow, major powers are increasingly seeking secure and diversified supply chains.
China currently dominates much of the world’s mineral processing and refining capacity, particularly for rare earth elements, giving Beijing substantial influence over global supply chains. In response, the United States has been actively pursuing strategic partnerships across Africa and other resource-rich regions to reduce dependence on Chinese-controlled processing networks.
Africa’s Growing Leverage
Kenya’s negotiations reflect a broader trend across Africa, where governments are seeking greater control over how their resources are developed and monetized. Rather than exporting raw materials, many countries are now prioritizing domestic processing, industrialization, and local value retention.
Beyond Kenya, the United States has pursued similar partnerships in countries such as the Democratic Republic of Congo, where access to cobalt and copper plays a crucial role in global battery production. Meanwhile, Russia has expanded its footprint in several African nations through mining and resource agreements linked to broader security and geopolitical interests.
A Shift in the Global Minerals Landscape
The proposed Kenya-US agreement signals more than just a commercial partnership. It highlights a changing global minerals landscape in which African nations are gaining greater bargaining power and demanding more equitable terms for resource development.
For Washington, securing access to rare earth supplies is an important step toward strengthening supply chain resilience and reducing reliance on China. For Kenya, the deal offers an opportunity to accelerate industrial growth while ensuring that more value from its natural resources remains within the country.
As competition for critical minerals intensifies, the Mrima Hill project could become a defining example of how Africa’s resource wealth is reshaping international economic and geopolitical relationships.
# The G7 Just Pledged to Break China’s Rare Earth Grip — There’s a Lot of Work to Do
For decades, the world’s advanced economies have enjoyed the benefits of globalization while quietly allowing a critical vulnerability to emerge: dependence on China for rare earth minerals and permanent magnets.
Now, the Group of Seven (G7) nations are finally attempting to confront that reality. At their recent summit in Evian, France, G7 leaders agreed on an ambitious goal: by 2030, no single country should account for more than 60% of their imports of rare earth elements and permanent magnets. Beyond that, they hope to reduce reliance further, targeting a 50% threshold as soon as possible.
The message is clear. The world’s leading democracies have concluded that China’s dominance over critical minerals has become both an economic and national security risk.
The challenge? Breaking that dependence may take far longer than the politicians would like.
## Why Rare Earths Matter
Rare earths are a group of 17 metallic elements that play an essential role in modern technology. On their own, these materials may seem obscure. But when processed into permanent magnets—particularly neodymium-iron-boron (NdFeB) magnets—they become indispensable.
These magnets are found in:
* Electric vehicles
* Wind turbines
* Smartphones
* Industrial robotics
* Military drones
* Precision-guided missiles
* Radar systems
* Advanced defense technologies
Their unique properties allow manufacturers to build lighter, stronger, and more energy-efficient motors and electronic systems. In other words, rare earth magnets have become one of the foundational technologies of the 21st century.
## China’s Dominance Is Overwhelming
China’s position in this market is difficult to overstate. The country currently accounts for roughly:
* 70% of global rare earth production
* Around 70% of critical mineral refining capacity
* Approximately 95% of rare earth permanent magnet manufacturing
This dominance wasn’t built overnight. For years, China invested heavily in mining, refining, processing expertise, and manufacturing infrastructure while many Western nations outsourced these activities due to environmental concerns, lower costs, and regulatory hurdles. The result is a supply chain where much of the world depends on China not merely for raw materials but for the highly specialized processing required to make those materials usable.That processing stage has become the true strategic bottleneck.
## Why the G7 Is Acting Now
The urgency stems from recent geopolitical tensions.
Over the past several years, Beijing has increasingly used export controls on critical minerals as a policy tool. Since 2020, China has imposed multiple restrictions on key materials used in defense and clean energy technologies.
Last year, China introduced sweeping export controls on rare earths and other critical minerals, raising fears that manufacturing lines across North America, Europe, and Asia could face severe disruptions.
The issue became even more visible during escalating trade disputes with the United States and amid growing tensions surrounding Taiwan.
Officials across the G7 have come to a sobering realization:
If China chose to significantly restrict exports, major sectors of the global economy could be affected almost immediately. The International Energy Agency has warned that trillions of dollars of economic activity outside China could be exposed to supply disruptions if export controls were fully implemented.
For military planners, the concern is even more immediate. Rare earth magnets are embedded in everything from fighter aircraft and missile guidance systems to surveillance drones. Dependence on a geopolitical rival for these materials creates a strategic vulnerability few governments are comfortable accepting.
## Lessons From Japan
The G7 is not the first group to recognize this problem. Japan learned the lesson more than a decade ago. In 2010, following a maritime dispute with China, Japanese companies suddenly found themselves facing restrictions on rare earth exports. Tokyo responded with a long-term strategy to diversify suppliers, invest in overseas mining projects, and build stockpiles. Yet even after more than 15 years of effort, Japan still sources roughly 75% of its rare earth imports from China.
That reality offers a sobering perspective on the G7’s latest pledge.
Diversification is possible. Rapid diversification is much harder.
## Building a Western Supply Chain
Despite the challenges, efforts are underway to create alternative supply chains. In the United States, several companies are positioning themselves as key players in what policymakers increasingly call a “mine-to-magnet” strategy.
### MP Materials
MP Materials operates Mountain Pass in California, the only commercial-scale rare earth mine in the United States.
The company has also expanded processing and magnet manufacturing capabilities in Texas and recently received significant support from the U.S. Department of Defense to strengthen domestic separation and refining capacity.
Its goal is straightforward: reduce reliance on Chinese processing and create a fully integrated American supply chain.
### USA Rare Earth
Another emerging player is USA Rare Earth. The company is developing mining, processing, and magnet manufacturing operations designed to produce rare earth permanent magnets domestically. Backed by federal incentives through the CHIPS and Science Act, the company aims to establish large-scale production capabilities and become a cornerstone of a Western rare earth ecosystem. These efforts represent important progress. But they are only the beginning.
## The Hard Part: Heavy Rare Earths
One major complication is that not all rare earths are equal. Many Western projects focus primarily on so-called “light” rare earth elements.
China, however, remains especially dominant in the production and processing of “heavy” rare earths—materials that are crucial for many advanced defense and high-performance industrial applications. Without secure access to these heavier elements, building a truly independent magnet supply chain remains difficult. Industry experts caution that current Western investments, while encouraging, do not yet solve this deeper problem.
## Obstacles Ahead
The G7’s target may be politically appealing, but achieving it will require overcoming significant obstacles.
### Capital Requirements
Mining and refining projects require billions of dollars in investment before they produce meaningful output.
### Regulatory Challenges
Permitting new mines can take years, particularly in North America and Europe.
### Environmental Concerns
Rare earth extraction and refining are energy-intensive and can create substantial environmental impacts if not carefully managed.
### Community Opposition
Many proposed mining projects face local resistance regardless of their strategic importance.
### Technical Expertise
China’s advantage isn’t just geological.
It also possesses decades of accumulated processing knowledge, engineering expertise, and industrial capacity that cannot be replicated overnight.
## More Than Mining
Recognizing these realities, G7 leaders are discussing additional measures beyond simply opening new mines.
These include:
* Expanding recycling of rare earth materials
* Developing strategic stockpiles
* Supporting refining and processing facilities
* Creating industrial procurement quotas
* Coordinating investments across allied nations
Defense manufacturing may become a particular focus, with governments potentially requiring portions of critical materials to come from non-Chinese sources. Such policies could help create the guaranteed demand necessary for new projects to attract financing.
## The Bottom Line
The G7’s commitment marks one of the strongest collective efforts yet to reduce dependence on China for critical minerals. The goal is ambitious, and perhaps necessarily so. Without clear targets, governments and industries often fail to act. But ambition alone will not be enough.
China’s dominance in rare earths was built over decades through sustained investment, industrial policy, and strategic planning. Reversing that dominance will require the same level of long-term commitment from the United States, Europe, Japan, and their allies.
The good news is that the process has begun. The difficult reality is that diversification is not a five-year project—it may be a generation-long effort.
The G7 has taken an important first step.
Now comes the hard part: turning a political pledge into a functioning supply chain.
As the world accelerates toward electrification and clean energy, rare earth elements (REEs) have become some of the most strategically important minerals on the planet. They are essential components in electric vehicles, wind turbines, smartphones, computers, advanced defense systems, and countless other technologies that power modern life.
A recent study by researchers at the University of Michigan suggests that North America may have the resources needed to build a more self-reliant rare earth supply chain—provided the right economic and policy conditions are in place.
Growing Demand for Critical Minerals
Global demand for rare earth elements is expected to rise significantly over the coming decades. Researchers estimate that worldwide demand will increase from approximately 91 kilotons in 2024 to 123 kilotons by 2030 and 150 kilotons by 2040.
Today, however, the global rare earth industry remains heavily concentrated. China accounts for roughly 70% of global rare earth mining, while the United States contributes only about 11%. This imbalance has raised concerns about supply chain security, economic competitiveness, and national defense readiness.
Assessing North America’s Resource Potential
The University of Michigan team evaluated 28 rare earth deposits across North America, analyzing factors such as ore tonnage, mineral grade, and total rare earth oxide content. Their findings indicate that North America possesses enough rare earth resources to satisfy U.S. demand for decades.
The challenge is not the availability of resources, but whether those resources can be extracted economically.
Many North American deposits are lower in quality than leading operations in China and Australia. In addition, some deposits contain elements such as thorium, a naturally occurring radioactive material that can increase mining and disposal costs.
Despite these challenges, researchers believe several deposits could support a competitive domestic supply chain, particularly if governments provide targeted support during the industry’s development phase.
Light vs. Heavy Rare Earth Elements
Rare earth elements are typically divided into two categories: light rare earths and heavy rare earths.
Light rare earth elements are more abundant and are widely used in magnets, batteries, electronics, and renewable energy technologies. Heavy rare earth elements are less common but highly valuable because they improve the performance and heat resistance of high-strength magnets.
The study found a geographic advantage across North America:
The United States holds substantial deposits of light rare earth elements.
Canada possesses many of the region’s most significant heavy rare earth deposits.
This distribution suggests that a coordinated North American strategy could strengthen supply security while leveraging the strengths of both countries.
Why Domestic Mining Matters
Rare earth elements are classified as critical minerals because they support industries vital to economic growth, clean energy, and national security. Supply disruptions can have far-reaching consequences, affecting everything from electric vehicle manufacturing to advanced military technologies.
Historically, the United States mined rare earths at California’s Mountain Pass mine, but much of the industry’s processing capacity eventually shifted overseas. Today, experts argue that rebuilding domestic mining alone is not enough. North America must also develop processing, refining, and manufacturing capabilities to create a fully integrated supply chain.
The Path Forward
The study concludes that North America has the geological resources needed to establish a more resilient rare earth industry. However, success will depend on balancing economic viability, environmental responsibility, and strategic investment.
As demand for electric vehicles, renewable energy systems, and advanced technologies continues to grow, developing a secure domestic supply of rare earth elements could become one of the most important industrial challenges—and opportunities—of the coming decades.
Indian industrial groups Reliance, Vedanta and Adani have shown interest in developing facilities to process Andhra Pradesh state’s significant reserves of increasingly important rare-earth minerals, according to two sources with knowledge of the matter.
With New Delhi seeking to cut India’s dependence on China for rare earths, the three companies are among about 10 who have expressed interest in setting up rare earth facilities in the southern state, one of the sources said.
Andhra Pradesh holds 211 million metric tons of beach sand mineral resources, including rare earths, across 16 identified coastal deposits, according to a draft document. India has 482.6 million tons of rare earth ore resources, according to the Geological Survey of India.
RARE EARTH AMBITIONS
The interest comes as New Delhi steps up efforts to build domestic rare earth mining, processing and magnet manufacturing capacity, while Andhra Pradesh aims to attract 500 billion rupees ($5.2 billion) in rare earth and titanium investments over the next decade.
The plans were set out in a draft government document.
The Andhra Pradesh government, Reliance Industries Ltd, Vedanta Ltd and Adani Enterprises Ltd did not respond to Reuters emails seeking comment.
Andhra Pradesh was among four states identified in February’s federal budget for the development of rare earth “corridors” covering mining, processing and magnet production.
The initiative followed New Delhi’s approval in November of a 73 billion rupee programme to support rare earth magnet manufacturing.
Rare earth elements are essential for permanent magnets used in applications such as electric vehicle motors. While India holds substantial rare earth reserves, it lacks industrial-scale facilities capable of processing the minerals to high purity levels.
CAPITAL INCENTIVES AND OTHER MEASURES
Andhra Pradesh plans to issue tenders for rare earth facilities after securing cabinet approval for its rare earth corridor policy, which is expected within a month, the sources said.
The state also plans to offer capital-linked incentives and additional benefits for projects with investments of 10 billion rupees or more, the sources said.
Andhra Pradesh has been courting large-scale investments, attracting companies including Google and ArcelorMittal Nippon Steel, and aims to secure $1 trillion in investment commitments by 2029, a state minister told Reuters last November.
Pip: Welcome to a show about the rocks that run the world — or at least the ones that run the drones, the defense contracts, and the supply chains holding everything together.
Mara: Today we're looking at work from Nanthakumar Victor Emmanuel, P.Eng, and it lands squarely in rare earth territory — specifically who controls the magnets inside American military drones, and what one company is doing about it.
Pip: Let's start with the Pentagon's drone ambitions and the supply chain problem underneath them.
The Pentagon's Drone Ambitions vs. China's Magnet Grip
Mara: The setup here is stark: the United States military wants a lot of drones, fast, and almost every one of them depends on a component it doesn't control.
Pip: The post puts the numbers plainly: "The Pentagon recently placed the largest drone order in American history — 30,000 one-way attack drones, with plans to scale past 300,000 by early 2028."
Mara: And the constraint hiding inside that ambition is the rare earth magnet. According to Goldman Sachs figures cited in the post, roughly 98 percent of the world's magnets are manufactured in China. So the upshot is: you can order all the drones you want, but if the magnets aren't there, the drones aren't either.
Pip: Three hundred thousand drones is a serious procurement target. The magnet math is the part that doesn't scale with good intentions.
Mara: That's where REalloys enters the picture. The post describes the company as holding the only fully non-Chinese mine-to-magnet heavy rare earth supply chain in North America — covering processed metals, finished alloys, and the magnet-ready inputs that defense contractors actually need.
Pip: So the chain runs from the ground to the finished input, entirely outside China. That's the gap REalloys is positioned to fill, and it's a gap the Pentagon's own order just made very visible.
Mara: The original reporting is sourced to The Globe and Mail, and the post frames REalloys not as a speculative play but as a company that has spent years building toward exactly this moment in defense procurement.
Pip: The timing is either very good planning or very good luck — probably some of both.
Mara: Rare earth supply chains don't move fast, but defense procurement deadlines do. That tension is what makes this story worth watching.
Pip: The magnets are small. The stakes are not. More next time.
