Billions in US-funded rare earths flowing to Asian markets: report

Staff Writer | July 9, 2026 | 3:49 am Critical Minerals Markets Asia China USA Rare Earth

MP Materials owns and operates Mountain Pass, the only rare earths mine in the US. (Credit: MP Materials)

US-backed rare earths producers are selling much of their output to Japan and South Korea because American magnet manufacturing has yet to catch up with Washington’s drive to build a domestic critical minerals supply chain.

A report from Financial Times shows that rare earth products from MP Materials (NYSE: MP), Energy Fuels (NYSE American: UUUU; TSX: EFR) and Phoenix Tailings, companies that have collectively secured billions of dollars in US government support, are being shipped to Asian customers where magnet manufacturing remains far more established than in the US.

China has tightened exports of rare earths and other critical minerals, prompting Washington and its allies to accelerate efforts to secure alternative supply chains for materials used in everything from defence systems to electric vehicles.

Infographic: Who controls rare earth processing?

“Unless the [US defence] primes move quickly, I will sell out,” Phoenix Tailings CEO Nick Myers told FT. “Other companies are paying top dollar faster.” He said the company’s customers are “primarily in Korea and Japan,” where demand has surged following China’s export restrictions.

The sales underscore the challenge facing the Trump administration’s push to build an integrated domestic rare earths industry. While the US is rapidly expanding mining and processing capacity, downstream magnet manufacturing remains limited, leaving producers dependent on overseas buyers until American demand develops.

Building capacity

MP Materials, the largest US rare earth producer, said sales of its neodymium-praseodymium (NdPr) oxide and metal were primarily made through Sumitomo Corp. for distribution to Japanese customers, according to its latest quarterly results.

The company, owner of the Mountain Pass mine in California, has stopped selling mined rare earths to China’s Shenghe Resources under its agreement with the US government. It expects to begin shipping finished magnets to General Motors later this year under previously announced supply agreements with GM and Apple.

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Energy Fuels, which received conditional US government funding worth $725 million last month, also expects to export material to Asia in the near term.

The company has said it plans to ship rare earth oxides to South Korea while advancing its acquisition of Australian Strategic Materials, whose South Korean facility produces rare earth metals.

Energy Fuels also agreed in June to acquire German magnet maker Vacuumschmelze in a $1.9 billion deal that is expected to increase shipments to the company’s US operations.

China dominates global NdFeB magnet production, accounting for about 90% of output, according to US government estimates. Japan is the largest producer outside China, while South Korea, the US and Europe have smaller or emerging production bases.

Phoenix Tailings, which secured conditional $500 million in government support in June, said the funding will help expand production of rare earth metals and oxides.

MP Materials, meanwhile, continues to benefit from a federal pricing agreement that guarantees minimum prices for certain products while the broader US rare earths supply chain continues to take shape.