US Seeks to Break Dependence on China, Diversifies Rare Earth Sources to Malaysia and Brazil
To reduce its reliance on Chinese rare earths, the U.S. is diversifying its supply chain through Lynas's production in Malaysia and by funding acquisitions in Brazil. The Pentagon is supporting these efforts with millions in grants, aiming for a China-free supply chain by 2027.
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- 📰 Published: April 27, 2026 at 20:56
- 🔍 Collected: April 27, 2026 at 21:32 (35 min after Published)
- 🤖 AI Analyzed: April 28, 2026 at 02:45 (5h 13m after Collected)
China's use of rare earths as leverage has prompted Western nations to strive for independence from Chinese supply. Media reports indicate that Australia's Lynas Rare Earths, which supplies the U.S. military, has begun producing heavy rare earths in Malaysia—a field currently dominated by China—as part of the Pentagon's risk-diversification efforts. Countries like Brazil are also becoming new sources for the U.S.
Lynas CEO Amanda Lacaze stated that for the past 20 years, no country other than China has produced separated heavy rare earths. The report describes the company as being at the forefront of efforts by the U.S. and its allies to prevent China from using rare earths as global leverage.
In March, the Pentagon signed a preliminary $96 million agreement with Lynas to procure rare earth products. That same month, Lynas began producing samarium oxide, a rare mineral high in demand for military use, such as for heat-resistant magnets in fighter jet motors and missiles.
Furthermore, mining giant MP Materials, backed by billions in U.S. government funding, plans to build its own heavy rare earth refinery, expected to start production this year.
The challenge in moving away from Chinese supply lies in building refining capacity. Separating rare earths using industrial acids typically requires hundreds of steps. A decade ago, Lynas had a refinery in Kuantan, Malaysia, but it only produced common light rare earths, while heavy rare earths were processed in China. However, in 2025, amidst the height of the U.S.-China trade war, Lynas finally completed a heavy rare earth processing facility there.
Due to wastewater treatment issues facing its planned facility in Texas, Lynas shifted focus to building a second, larger heavy rare earth processing plant in Kuantan, scheduled for completion in 2028.
Meanwhile, Lynas achieved a quick victory in the commercial production of samarium in March. Samarium was previously refined almost entirely in China, making it a mineral with the highest risk of supply disruption, which could cost U.S. industry billions.
Beyond Lynas and MP Materials, Washington is looking for more suppliers. In February, the U.S. provided a $565 million loan to Brazil-based Serra Verde, which operates a mine with large heavy rare earth reserves. USA Rare Earth announced last week it would acquire Serra Verde for approximately $2.8 billion to ensure a stable supply to the U.S.
While the U.S. government set a 2027 deadline for defense companies to have 'zero rare earths from China,' Gracelin Baskaran of the Center for Strategic and International Studies (CSIS) noted that the effort for independence is still in its early stages. While the trend is real, converting it into full production will take several years.
Lynas CEO Amanda Lacaze stated that for the past 20 years, no country other than China has produced separated heavy rare earths. The report describes the company as being at the forefront of efforts by the U.S. and its allies to prevent China from using rare earths as global leverage.
In March, the Pentagon signed a preliminary $96 million agreement with Lynas to procure rare earth products. That same month, Lynas began producing samarium oxide, a rare mineral high in demand for military use, such as for heat-resistant magnets in fighter jet motors and missiles.
Furthermore, mining giant MP Materials, backed by billions in U.S. government funding, plans to build its own heavy rare earth refinery, expected to start production this year.
The challenge in moving away from Chinese supply lies in building refining capacity. Separating rare earths using industrial acids typically requires hundreds of steps. A decade ago, Lynas had a refinery in Kuantan, Malaysia, but it only produced common light rare earths, while heavy rare earths were processed in China. However, in 2025, amidst the height of the U.S.-China trade war, Lynas finally completed a heavy rare earth processing facility there.
Due to wastewater treatment issues facing its planned facility in Texas, Lynas shifted focus to building a second, larger heavy rare earth processing plant in Kuantan, scheduled for completion in 2028.
Meanwhile, Lynas achieved a quick victory in the commercial production of samarium in March. Samarium was previously refined almost entirely in China, making it a mineral with the highest risk of supply disruption, which could cost U.S. industry billions.
Beyond Lynas and MP Materials, Washington is looking for more suppliers. In February, the U.S. provided a $565 million loan to Brazil-based Serra Verde, which operates a mine with large heavy rare earth reserves. USA Rare Earth announced last week it would acquire Serra Verde for approximately $2.8 billion to ensure a stable supply to the U.S.
While the U.S. government set a 2027 deadline for defense companies to have 'zero rare earths from China,' Gracelin Baskaran of the Center for Strategic and International Studies (CSIS) noted that the effort for independence is still in its early stages. While the trend is real, converting it into full production will take several years.