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New York, NY – July 30, 2026 – The Pentagon’s investment in MP Materials marked the biggest U.S. intervention in the rare earth industry in decades. The deal established a domestic champion for one of the world’s most strategically important supply chains and demonstrated that Washington is prepared to commit federal financial resources to critical mineral production. Companies mentioned in today’s commentary includes: Realloys Inc. (ALOY), MP Materials Corp. (NYSE: MP), Sociedad Química y Minera de Chile (NYSE: SQM), Lynas Rare Earths Ltd. (OTCQX: LYSDY), Southern Copper Corporation (NYSE: SCCO), BHP Group (NYSE: BHP).
Mountain Pass is the only large-scale rare earth mine operating in the United States and one of the world’s largest producers of light rare earths. Its ore is rich in neodymium and praseodymium (NdPr), the two elements that form the foundation of high-performance permanent magnets used in electric vehicles, industrial motors and defense systems. But the real challenge begins with heavy rare earths.
Dysprosium and terbium are two of the most strategically important heavy rare earth elements. They are added to permanent magnets that must operate under extreme temperatures, including those used in fighter aircraft, guided missiles, submarines and many advanced electric motors.
Mountain Pass is primarily a light rare earth deposit. While MP Materials has developed an SEG+ concentrate containing medium and heavy rare earths, additional sources of dysprosium- and terbium-bearing feedstock remain necessary to support large-scale domestic production of high-temperature permanent magnets. That has forced the industry to look elsewhere for heavy rare earth feedstock, along with the separation, metallization, alloy production and magnet manufacturing capacity needed to turn those materials into finished products.
The next fortunes in rare earths are unlikely to come from another Mountain Pass. They’ll come from the companies supplying what Mountain Pass cannot. That has opened an entirely new battleground across the rare earth industry.
Who Will Build the Rest of America’s Rare Earth Supply Chain?
REalloys (ALOY) is building the supply chain piece by piece.
Over the past year, REalloys has assembled a series of agreements spanning nearly every major stage of the industry, from heavy rare earth feedstock and separation to metallization and permanent magnet manufacturing. Feedstock comes first.
REalloys owns 100% of Hoidas Lake heavy rare earth mine in Saskatchewan,Canada And a 15-year supply arrangement for rare earth concentrate from the Tanbreez Project, one of the world’s largest rare earth deposits outside China. Additional agreements in Kazakhstan, Brazil and USA further diversified the company’s future supply base, reducing reliance on any single jurisdiction or project.
Also, earlier this year, the company secured long-term supply agreements with the Canadian government-run Saskatchewan Research Council (SRC) covering separated heavy rare earth oxides, including dysprosium and terbium. But rare earth oxides are not the final product. They must still move through metallization, alloy production and magnet manufacturing before they become usable products for the American defense and civilian economies. REalloys has that covered, as well.
Earlier this week, the company signed a strategic agreement with permanent magnet manufacturer JS Link to develop one of the first fully integrated non-Chinese rare earth magnet platforms, bringing together feedstock, processing, metallization and permanent magnet manufacturing under a single North American industrial strategy.
Washington has noticed, starting with the Defense Logistics Agency (DLA), which manages the National Defense Stockpile and serves as the combat logistics agency for the Department of Defense, NASA and numerous other federal agencies.
Washington has noticed.
In March, the Defense Logistics Agency awarded REalloys a contract worth up to $1.7 million to design a modular processing facility capable of producing 300 metric tons per year of samarium and gadolinium metals, making it one of the largest domestic sources.
Samarium and gadolinium are used in high-temperature samarium-cobalt magnets for fighter aircraft, precision-guided weapons, radar systems and other defense technologies. Reuters described the award as an “initial vote of confidence” in REalloys’ technology from the agency responsible for procuring strategic materials for the U.S. military.
The contract also addressed one of the least appreciated weaknesses in the American rare earth industry: metallization, or alloying. Mining and separating rare earth oxides are only the beginning. Those oxides must still be converted into metals before they can be manufactured into permanent magnets, and China has monopolized that part of the global supply chain.
More specifically, the DLA award supports development of REalloys’ proprietary metallization technology, one of the least developed segments of the U.S. rare earth supply chain.
The Pentagon’s message became even more explicit two months later. In May, REalloys (ALOY) disclosed that it had received a Department of Defense memorandum identifying domestic heavy rare earth production as an urgent national priority ahead of the January 1, 2027 deadline banning Chinese-origin rare earth magnets from defense procurement. The memorandum called for rapid expansion of domestic heavy rare earth processing, metallization and magnet manufacturing–the same industrial capabilities REalloys had already begun assembling through its partnerships and acquisitions. Just weeks later, in early July, the U.S. Army selected REalloys for exclusive negotiations to develop heavy rare earth processing facilities at the Tooele Army Depot in Utah…
Under the proposed agreement, REalloys would finance, construct and operate a commercial heavy rare earth processing complex at the Tooele Army Depot under an Enhanced Use Lease structure. Rather than owning the facilities itself, the Army would make land available while REalloys develops and operates the processing platform.
The complex is designed to receive heavy rare earth materials from allied and domestic suppliers and convert them into high-purity products for government and commercial customers. Initial commercial development is targeted for 2027, with operating capability expected no later than 2028. The project would make Tooele Army Depot the first U.S. military installation to host commercial heavy rare earth processing. The facilities are intended to produce materials for multiple federal agencies, including the U.S. Army, the Defense Logistics Agency, the Department of Energy and NASA.
REalloys calls it North America’s “missing midstream”, and it’s where domination means much more than owning the biggest mine. It’s about owning the facilities that transform rare earth concentrates into high-purity metals, specialized alloys and, ultimately, permanent magnets. That’s where China built its global advantage. It’s also where North America’s largely disappeared.
REalloys is trying to bring it back. It’s building the largest heavy rare earth metallization facility outside China, creating a new source of dysprosium and terbium metals for Western manufacturers. The end goal is to connect that metallization capacity to a fully integrated mine-to-magnet supply chain, with permanent magnet manufacturing targeted at up to 10,000 tonnes annually. The high-level national security urgency and the fast cycle of deal-making and government contracts are now creating steady momentum, with investors already funding the buildout. Just days before the U.S. Army announcement, REalloys secured approximately $100 million from institutional investors to accelerate construction, giving the company fresh capital to expand one of the most ambitious rare earth manufacturing platforms in North America.
Other companies to keep an eye on:
MP Materials Corp. (NYSE: MP)
MP Materials has largely completed its strategy of rebuilding a fully domestic rare earth magnet supply chain. While Mountain Pass remains one of the world’s premier rare earth deposits, the company’s emphasis has shifted toward value-added refining and magnet manufacturing.
Its Fort Worth, Texas facility is ramping production of finished NdFeB magnets manufactured from internally separated oxides, creating an end-to-end U.S. supply chain. Initial annual magnet capacity is near 1,000 metric tons, with staged expansion tied to automotive and defense demand.
Department of Defense support continues to accelerate development of heavy rare earth separation capabilities, including dysprosium and terbium. Multi-year government supply agreements reinforce MP’s position as both a commercial supplier and a strategic national security partner.
Sociedad Química y Minera de Chile (NYSE: SQM)
Sociedad Química y Minera de Chile remains one of the world’s most consequential lithium producers, supplying high-purity lithium carbonate and lithium hydroxide that feed lithium-ion battery supply chains globally. Headquartered in Santiago and operating extensive brine extraction and chemical refining infrastructure in Chile’s Atacama Desert, SQM leverages decades of extraction experience and advanced purification to deliver material into EV and energy storage markets.
The company’s vertically integrated model spans brine resource development, lithium chemical production, and specialty industrial chemicals, helping it manage pricing cycles and diversify revenue beyond battery metals. Despite geopolitical and regulatory headwinds in Chile’s evolving lithium policy landscape, SQM maintains strategic partnerships and continues to expand capacity targeted at battery-grade chemicals.
SQM is also investing in direct lithium extraction and downstream ventures aimed at lowering water usage and carbon intensity per tonne of lithium produced, positioning the business as a core supplier to automakers and renewable energy OEMs seeking sustainable North-South supply chain solutions through the late 2020s.
Lynas Rare Earths Ltd. (OTC: LYSDY)
Lynas Rare Earths remains the leading producer of separated rare earth materials outside China. The company has restructured its processing chain to mitigate regulatory risk and expand long-term throughput.
The Kalgoorlie cracking and leaching plant in Western Australia is fully operational, allowing Mt Weld concentrate to be processed domestically and radioactive residues to be managed before shipment. This shift has enhanced supply security while addressing prior Malaysian regulatory concerns.
In the United States, Lynas is progressing construction of its Seadrift, Texas heavy rare earth separation facility, supported by Department of Defense funding. The plant will produce dysprosium and terbium critical to high-temperature magnets used in EV and defense applications.
Southern Copper Corporation (NYSE: SCCO)
Southern Copper remains one of the industry’s largest reserve holders at a time when structural copper deficits are forecast later this decade. Its Peruvian and Mexican operations rank among the lowest-cost globally, providing resilience amid price volatility.
The long-delayed Tía María project in Peru has entered active development, with expected annual output near 120,000 tonnes using SX-EW processing technology designed to limit environmental intensity. The project represents a major incremental growth catalyst.
BHP Group (NYSE: BHP)
BHP has sharpened its portfolio focus around so-called “future-facing commodities,” prioritizing copper and nickel as structural demand drivers while reducing legacy exposure to thermal coal and petroleum. Its attempted acquisition of Anglo American underscored management’s willingness to pursue transformative scale in copper, even though the transaction did not ultimately proceed.
The company continues investing heavily in Escondida in Chile, the world’s largest copper mine, extending mine life through concentrator upgrades and resource conversion. In the United States, BHP remains a joint venture partner with Rio Tinto on the Resolution Copper project in Arizona, a deposit that could materially increase domestic copper supply if permitted.
Nickel West in Australia provides exposure to battery-grade nickel, although production pacing has been adjusted in response to softer short-term battery demand and price weakness. BHP’s competitive advantage lies in balance sheet strength, multi-decade reserve life, and the capacity to fund capital-intensive projects through commodity cycles , positioning it to benefit from projected copper deficits in the late 2020s.
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