Rare Earths Independent of China: Alternative Sources for Critical Materials

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Wuxi InfiMotion Technology Co., Ltd.

The USA and China have agreed on a one-year hiatus on export restrictions for critical raw materials. Due to fragile supply chains, the USA has started establishing alternative supply chains. However, the main investor is controversial.

The rare earths essential for the electronics industry are once again at the center of geopolitical tensions. After months of trade conflicts, the U.S. and China reached an important, albeit temporary, agreement at the end of October 2025: China will suspend its export restrictions on rare earths for one year, while the U.S. will reduce tariffs on certain Chinese products in return. For hardware developers, this development brings short-term relief.

Rare earths are indispensable for the production of:

• Smartphones and displays (neodymium, praseodymium),
• Electric motors and drivetrain technology (dysprosium, terbium),
• Magnetic sensors and actuators (samarium, gadolinium) and
• High-frequency electronics (lutetium).

The past months have shown how vulnerable supply chains are: U.S. companies were partially unable to access the sought-after raw materials, which delayed development projects and drove up costs. In parallel, the U.S. is already negotiating with Australia on an $8.5 billion initiative to establish alternative supply chains.

A concrete example is the Araxá project in Brazil by St. George Mining, which hosts six of the ten most critical minerals for the U.S. The project has one of the highest rare earth grades outside of China, with 4.13%, and features a JORC-compliant resource of over 44.1 million US short tons . JORC (Joint Ore Reserves Committee) is the international gold standard for the evaluation of mineral deposits and is comparable to industry standards in electronics. A JORC-compliant estimate means that the resource quantities have been assessed under strict, internationally recognized criteria and are considered reliable.

Particularly relevant for electronic applications: The deposit contains the elements critical for permanent magnets, neodymium and praseodymium, as well as the rare earths dysprosium and terbium, which are essential for high-performance applications.

Controversy Over Major Investor

The main investor in the project is Australian billionaire Gina Rinehart through her company Hancock Prospecting, with 22.5 million Australian dollars (US $14.7 million). Rinehart, who has already invested in major rare earth producers Lynas Rare Earth and MP Materials, is not without controversy. She has faced criticism in the past due to disagreements with Indigenous groups, climate-skeptical remarks, and attempts at art censorship.

A China-Independent Supply Chain Would Be Desirable

The one-year agreement provides the industry with planning security for short-term projects; however, in the long term, diversifying raw material sources remains essential. Developers should increasingly consider the availability of critical materials when selecting components and evaluate alternative material concepts. The fragile nature of the agreement highlights that a robust, China-independent supply chain for rare earths remains a strategic goal for Western economies. (heh)

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