U.S.-Produced Rare Earths, Backed by Massive Funding to Reduce Reliance on China, Primarily Exported to South Korea and Japan

Reports indicate that rare earth elements produced in the United States with full-scale support from the Donald Trump administration are being exported primarily to South Korea and Japan, as they struggle to find sufficient demand within the U.S.

While the U.S. is accelerating efforts to build a rare earth supply chain to reduce its dependence on China, the domestic demand base for rare earths has yet to fully form, leading a significant portion of production to be directed toward Asian markets.

According to the British daily Financial Times (FT) on July 8, rare earth products manufactured by companies such as MP Materials, Energy Fuels, and Phoenix Tailings—which have received billions of dollars in support from the U.S. government—are currently being sold mainly to South Korean and Japanese firms.

Rare earths are essential raw materials for high-performance permanent magnets used in electric vehicle motors, wind turbines, fighter jets, missile guidance systems, and semiconductor equipment.

As China, which effectively dominates the rare earth ecosystem, has begun to weaponize its resources through export controls, the U.S. has been ambitiously pushing for a supply chain restructuring in response.

However, analysts suggest that demand for rare earths within the U.S. has not yet materialized in earnest.

Thomas Krumer, an analyst specializing in rare earths, told the FT, "Currently, the only countries that produce high-performance rare earth permanent magnets on a large scale are Japan and China, which developed the original technology."

Nick Myers, CEO of U.S. rare earth recycling technology firm Phoenix Tailings, also stated, "Our customers are mainly in South Korea and Japan."

According to rare earth expert John Ormerod, excluding China, Japan’s annual production of rare earth permanent magnets is between 10,000 and 15,000 tons, while South Korea produces between 2,000 and 3,000 tons.

The U.S. production volume remains below 1,000 tons.

This reality is clearly reflected in the latest quarterly results of MP Materials, the largest rare earth miner in the U.S.

The company’s largest revenue segment, the sale of neodymium-praseodymium (NdPr) oxides and metals—which are raw materials for rare earth permanent magnets—was generated mostly from a contract with Sumitomo Corporation of Americas, which supplies materials to Japanese clients.

Only a small portion of the volume was supplied to a U.S. technology and industrial company.

Another U.S. rare earth producer, Energy Fuels, is also actively targeting the Asian market.

Mark Chalmers, CEO of Energy Fuels, stated, "We plan to send rare earth oxides to South Korea soon."

The FT reported that last year, a major South Korean manufacturer succeeded in producing rare earth permanent magnets using oxides from Energy Fuels.

However, U.S. rare earth companies are focusing on expanding the supply chain within the U.S. in the long term.

Energy Fuels is pursuing the acquisition of Australian Strategic Materials, an Australian company that owns rare earth metal production facilities in South Korea, and has also signed a deal to acquire the German permanent magnet manufacturer Vacuumschmelze for $1.9 billion.

CEO Chalmers explained that through this deal, Energy Fuels' products will be supplied more frequently to Vacuumschmelze’s U.S. operations in the future.

(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.