Economy

U.S. Government and Private Sector Boost Rare Earth Production and Recycling to Counter Chinese Dominance

Illustration for: U.S. Government and Private Sector Boost Rare Earth Production and Recycling to Counter Chinese Dominance
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Jul 6, 2026

THE BARE STORY

The United States government is partnering with domestic industry to secure its critical mineral supply chain and reduce its dependence on China, which currently dominates the global market for rare earth elements. These 17 metallic elements are essential for manufacturing everyday electronics like smartphones, electric vehicles, and wind turbines, as well as critical military systems such as the F-35 fighter jet. Following a 2025 trade crisis where China restricted rare earth supplies in response to U.S. tariffs, the Pentagon intervened by investing $400 million in MP Materials—the operator of the only active U.S. rare earth mine in Mountain Pass, California—for a 15 percent ownership stake and a 10-year guaranteed price floor.

According to U.S. Secretary of the Interior Doug Burgum and MP Materials CEO James Litinsky, China controls more than 90 percent of the world's rare earth magnets, leaving the U.S. vulnerable to supply disruptions. The 2025 supply squeeze previously forced companies like Ford Motors to temporarily suspend production of some vehicles. Under the agreement with the Pentagon, MP Materials is tasked with increasing its magnet production tenfold. The company has refined key elements to high purity levels and is building a larger manufacturing facility in Fort Worth, Texas, scheduled for completion in 2028, to supply magnets to clients such as General Motors and Apple.

In addition to mining, proponents are pointing to recycling as a vital strategy for securing the supply chain, given that less than 1 percent of consumed rare earths are currently recycled. Julie Klinger, an environmental studies professor at the University of Wisconsin–Madison, stated that rare earths are discarded annually in retired aircraft, decommissioned ships, electronics, and mining waste. Klinger noted that recycling these existing materials is more environmentally friendly than opening new mines.

To advance recycling efforts, Apple has partnered with MP Materials as part of a $500 million commitment to use American-made rare earth magnets. Under the collaboration, MP Materials will process end-of-life magnet materials at its California refinery, which will then be manufactured into magnets at its Texas facility for Apple products. To support this initiative, Apple has developed a specialized robot named Daisy to disassemble iPhones and recover materials that traditional recycling processes often miss.

Same Facts. Different Perspectives.

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Perspective by Grok

• Securing National Sovereignty First National security and strategic deterrence require absolute self-reliance in critical defense and industrial inputs. Relying on an adversarial nation that controls over 90 percent of the world's rare earth magnets leaves vital military platforms, such as the F-35 fighter jet, highly vulnerable to foreign economic coercion. Protecting domestic sovereignty justifies direct state intervention to secure the physical supply chains that underpin national defense.

• Stabilizing Key Economic Engines Active government intervention is necessary to shield domestic manufacturing from hostile foreign supply manipulations. The $400 million Pentagon investment in MP Materials, coupled with a 15 percent ownership stake and a 10-year guaranteed price floor, provides the financial predictability needed to counter Chinese market dominance. This strategic public-private partnership ensures that critical industries, like automotive manufacturing, avoid catastrophic production halts similar to those experienced by Ford Motors during the 2025 trade crisis.

• Expanding Domestic Industrial Capacity Long-term security cannot be achieved through recycling alone, necessitating a massive expansion of primary domestic processing and manufacturing infrastructure. Scaling magnet production tenfold and constructing the new Fort Worth facility by 2028 is vital to meeting the raw volume demands of defense and high-tech sectors. Relying on low-yield recycling methods is an insufficient strategy when confronting immediate geopolitical threats that require robust, high-volume industrial outputs.

How it may affect me

As a U.S. reader:

• In the short term, you are less likely to experience disruptions or delays when purchasing electric vehicles or electronic devices, as domestic supply chains stabilize and avoid manufacturing halts like those previously experienced by Ford Motors.

• Over the long term, you can expect a larger share of your consumer electronics, such as Apple iPhones, to be manufactured using recycled domestic rare earth magnets processed at U.S. facilities starting around 2028.

• You may see your tax dollars used for direct government intervention in the private sector, specifically the Pentagon's 400 million dollar investment and 15 percent ownership stake in MP Materials to secure national defense systems like the F-35 fighter jet.

• You may experience localized environmental and public health impacts, with some proponents warning of toxic waste risks near mining communities like Mountain Pass, California, while others advocate for low-impact recycling technologies to reduce these hazards.

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