In the small, unknown city of Stillwater, Oklahoma, the parking lot outside a low industrial building sits empty, and the machines inside remain silent. However, this factory may play a significant role in breaking China’s monopoly on the global rare earth market in the near future.
According to a report by The Washington Post on June 22, USA Rare Earth (USARE) is a crucial player in rebuilding the domestic supply chain for high-performance magnets in the United States. The magnets produced here will be used in products such as drones, electric vehicles, smartphones, medical equipment, and military weapons.
The company is ramping up its production line, recruiting dozens of skilled technical experts, and continuously improving the scientific formulas for magnets, preparing to produce millions of powerful neodymium magnets by early 2026.
Concerns arise from the potential risks in the U.S. industrial supply chain due to geopolitical factors. This mineral is essential for manufacturing strong magnets and is widely used across various industries such as technology, defense, and manufacturing. In recent weeks, China has weaponized its dominant position in this industry by cutting off the supply of rare earth products needed by U.S. automakers in a bid to gain leverage in trade negotiations with President Trump.
In the past, high production costs and environmental concerns led U.S. businesses to hand over the rare earth market to China. Now, U.S. enterprises are striving to regain their past rare earth manufacturing capabilities. However, challenges faced by USARE and other companies indicate that a complete shift away from reliance on Chinese rare earth will take time and require deep intervention by the federal government.
USARE CEO Joshua Ballard stated, “Our self-sufficiency in rare earths won’t be an issue in the future. But in the coming years, the world is expected to face challenges due to rare earth scarcity. Unfortunately, we have been overly dependent on China. This has been our predicament for the past few decades, and getting out of it will take time.”
The U.S. rare earth company is located in Stillwater, Oklahoma, with a 310,000-square-foot factory, former home to a Rolling Stone magazine printing plant, where the outline of the rare earth metal manufacturing process is gradually taking form. Technicians are gathered around towering equipment acquired from a Hitachi factory, which was shelved after only 18 months of use a decade ago. Workers are diligently operating machines that hum with automation.
USARE is taking a cautious approach to growth. The company plans to begin producing magnets at a rate of 600 tons per year at the start of next year, with production doubling by the end of the year. Ballard told investors last month that the factory is expected to produce 5,000 tons (equivalent to billions of units) of magnets in a few years, with an annual revenue of $800 million.
Director of Magnet Operations Robert Fredette, nearing retirement, was offered a rehire by the company. Having worked in this industry for a long time, the 62-year-old recalls the early 1980s when a pair of scientists independently invented the first rare earth magnet.
At that time, the United States held a leading position in global magnet production. But as China became a low-cost producer with strong government support, industries like this one—along with many others—shifted overseas, prompting a determined effort by President Trump to reverse this trend.
“Many talented individuals I knew left, with some opening magnet factories in China,” said Fredette, known as “Magnet Bob” in the factory.
For years, the U.S. has been pushing for developing alternatives to Chinese rare earth mines, natural sources containing one of the 17 rare earth elements, such as neodymium.
Among them, the most advanced technologically is MP Materials, which operates the only remaining rare earth mine in the United States and aspires to be the “American champion” in achieving a fully integrated domestic supply chain. MP Materials’ mine is located in Mountain Pass, California, about an hour’s drive southwest of Las Vegas. The company received a $45 million grant from the Biden administration in 2022 and is expected to start producing magnets for General Motors later this year at a factory in Woburn.
Ryan Castilloux, founder and managing director of Toronto’s Adamas Intelligence, stated that MP Materials is poised to secure a significant portion of magnet orders from major manufacturers like General Motors. However, for the U.S. to establish a complete and independent supply chain, USARE and other small companies are also essential in meeting various specialized magnet demands.
In the civilian and defense markets, a wide range of industrial magnets in almost unlimited shapes and sizes need to be produced, often with special requirements for working under high temperatures, low temperatures, and other harsh conditions.
“It’s not realistic to expect one or two manufacturers to meet all (domestic U.S.) needs in the short term,” he said. “That’s why a supplier ecosystem is crucial.”
USARE’s cautious development aims to control risks, but the company faces visible challenges: finding enough highly skilled employees who left the U.S. rare earth industry years ago to rebuild the production process, gaining government support, and competing with low-cost producers in China.
Another significant issue is whether the company can commercialize the Round Top Mountain deposit near the Mexico border in southeastern El Paso. The company has identified the deposit to contain significant amounts of various rare earth elements.
The company’s long-term plan is to replace raw materials purchased from South Korea with rare earth ore it mines itself. This “from mine to magnet” supply chain is highly desired in the industry. However, many rare earth elements in the Round Top Mountain deposit have lower concentrations. The company has not yet begun mining the ore, and some industry analysts doubt the profitability of extracting these ores.
China’s control over the rare earth market makes cost considerations a key factor. Many analysts suggest that the U.S. federal government needs to increase its involvement, possibly requiring public subsidies to match the support provided by the Chinese government to its rare earth producers.
In April of this year, Trump ordered the Department of Commerce to investigate the impact of imported critical minerals and their products (including magnets) on national security. This investigation might lead to new tariffs imposed beyond those signed by President Biden and scheduled to take effect next year.
President Trump also called for the acceleration of approval processes for new mining operations, such as those planned by USA Rare Earth in its Texas deposits. According to industry analysts, government officials are also considering other related supportive measures, including financing, tax incentives, procurement commitments, and mineral reserves.
A senior government official, who wished to remain anonymous, stated, “Given the President’s high level of interest in critical minerals mining, this administration will continue to utilize all available means to enhance the resilience of our supply chain.”