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Key developments: 2025 saw China tighten export controls on heavy rare earths, prompting the United States and its allies to accelerate alternative sourcing. Australia sealed a critical minerals deal with the United States on 21 October 2025, while the United States is set to ban Chinese‑origin rare‑earth metals and magnets in defense systems from January 2027. The Pentagon’s $400 million investment in MP Materials, coupled with a $150 million loan and a ten‑year offtake agreement, underpins a domestic push that has already delivered a record 50,692 tons of rare‑earth oxide in 2025 and the start of neodymium‑iron‑boron magnet production in Texas.
Why it matters: The new U.S. defense restriction creates an urgent need for a secure, non‑Chinese supply chain for heavy rare earths such as dysprosium and terbium, which are essential for high‑temperature magnets used in military hardware, electric vehicles, and renewable‑energy turbines. China still dominates the market, supplying roughly 60% of mined magnet rare earths, 91% of refined output and 94% of permanent‑magnet production, making the U.S. and its partners vulnerable to geopolitical pressure.
What to watch next: • MP Materials’ progress on its heavy‑rare‑earth separation line (target 200 t/yr of dysprosium and terbium). • Expansion of processing capacity in Brazil’s Serra Verde project and Saudi Arabia’s Jabal Sayid partnership with Maaden and MP Materials. • Further government funding rounds, such as the June agreement with USA Rare Earth that includes $277 million in grants and a $1.3 billion loan. • Implementation of the 2027 U.S. defense procurement ban and its impact on defense‑related supply contracts. [[1, 2, 3]]