Source : INDIA TODAY NEWS
The United States is trying to build a domestic supply chain for critical minerals used in weapons, aircraft and other industries, even as tighter rules bar defence contractors from sourcing key components from China. Companies are racing to expand output, but much of the new mining capacity is still years away, putting immediate focus on refining material from mining waste and recycled products.
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One company at the centre of that effort is Phoenix Tailings, which operates a small refinery in New Hampshire and plans to sharply increase its processing capacity with a USD 500 million Pentagon loan. The push has become more urgent as the war with Iran and the wider conflict in the Middle East have drawn down US munitions stockpiles, while President Donald Trump’s administration is pressing contractors to speed up weapons production under stricter sourcing rules.
At its facility in Exeter, New Hampshire, Phoenix Tailings uses electrolysis to separate critical elements from the powder left behind at traditional mines. The company says the site could help the US reduce its dependence on China in the processing of critical minerals, though it will take 14 to 18 months to build a new factory that would greatly expand its separation and metallisation capacity, a weak link in the US mines-to-magnets supply chain.
Workers at the refinery carry out the process in heat-resistant suits and sealed face masks. Anthony Balladon, chief commercial officer and a co-founder, said the challenge is growing. “It will be a tall order and a challenge to replenish these stocks and scale up in the time frame needed to meet defence demand and regulations,” he said, adding that the company is working hard to greatly increase capacity.
As its name suggests, Phoenix Tailings uses tailings, or waste from traditional mining, as well as recycled magnets and disk drives, as raw material for separation and metallisation, the stage where China has the strongest hold. The Massachusetts-based company plans to build a facility to extract and produce metals such as neodymium, praseodymium, terbium, dysprosium, samarium and yttrium, which are used in the defence, aerospace and automotive sectors.
“We call it the Freedom facility because, ultimately, the purpose of this is to ensure that the entire Western Hemisphere, the United States and its allies are free of Chinese influence within the rare-earth space,” Balladon said.
On a recent afternoon, two technicians in heat-resistant hazmat suits operated an array of cylinders, tubes, funnels and control panels mounted on a platform with bright yellow railings. A chemical process involving electricity removes oxygen and turns the oxide feed into a greyish neodymium-praseodymium metal used to make very strong permanent magnets for fighter jets, missiles, radar systems and drones.
Balladon said the metals Phoenix Tailings refines, and other critical minerals, play “an outsized role” in defence systems. A USD 150 million weapons system will not work if it is missing critical minerals worth only USD 20,000 to USD 30,000, he said. He added that the US defence sector particularly depends on samarium and needs 50 to 100 tonnes a year, but domestic capacity is very limited. According to Balladon, Phoenix Tailings is among the few companies able to produce the final metal, but its current capacity is only about 200 kilograms a year. He said that will rise to about five tonnes in the next three months, though it will be next year or 2028 before the company reaches its target of 120 tonnes.
Another company trying to adjust is Arnold Magnetic Technologies in Rochester, New York. For years, it relied on China for samarium to make samarium-cobalt magnets used in precision-guided missiles such as the Tomahawk. Now it is turning to material linked to abandoned mined dirt in La Rochelle, France, where Belgium-headquartered chemical company Solvay has restarted rare-earth separation after shutting operations in the 2000s, when China was building most of the world’s processing capacity.
The shift accelerated after April 2025, when China, according to the report, weaponised its near-monopoly by restricting the flow of processed critical materials and forcing the US government to back off in the trade war. Solvay then restarted separating neodymium and praseodymium at La Rochelle, and this year began separating heavier rare earths such as samarium, dysprosium and terbium, a company spokesperson said. “This ramp-up is driven by several factors: rapidly growing demand for permanent magnets, increased geopolitical focus on supply chain security, and strong customer demand in Europe and the United States for more diversified, resilient and traceable sources of supply,” the spokesperson said.
Arnold said the higher cost of sourcing from Solvay instead of China has not been a deciding factor. Matt Blake, chief executive officer of Arnold Magnetic Technologies, said the samarium-cobalt magnets it makes account for only a small share of the cost of a weapon system. “They are not the absolute cost drivers,” he said. Aaron Williams, the company’s chief commercial officer, said the increase in demand has helped the business. “From our end, it’s a good opportunistic growth,” he said.
Not every critical mineral presents the same path forward. Brodie Sutherland, chief executive officer of Patriot Critical Minerals Corp., which is seeking to explore and mine tungsten in the US, said he is concerned the country will not be able to manage without China-sourced tungsten after January 1, 2027, the deadline set by the Pentagon. He said the US is fully dependent on imports, with China controlling about 80 per cent of global mine supply and an even larger share of downstream processing. Efforts to raise US production will take years, he said, leaving the Pentagon and its contractors to rely on inventories, more recycling and limited supplies from outside China in the meantime.
The pressure has increased as the war with Iran cuts into already reduced US stockpiles of advanced missile interceptors. An analysis by the Centre for Strategic and International Studies said this could force the US and its Middle Eastern allies to take greater risks to conserve air defences, potentially putting American troops at risk. The think tank also warned in May that it could take at least three years to rebuild stocks of Tomahawk missiles, Patriot systems and THAAD, or Terminal High Altitude Area Defense, interceptors, raising concerns about US firepower in any future conflict with China.
Last month, Trump added to that pressure by announcing stricter controls on defence contractors sourcing critical materials from China. His executive order also limits the Pentagon’s ability to grant waivers when contractors cite a lack of domestic supply, and says contractors have not done enough to prioritise local production. “It is the policy of the United States that not only the finished equipment deployed by our military, but also the critical materials and components necessary to manufacture, maintain, sustain, and repair that equipment, are sourced domestically or from allied nations,” the July 20 order said.
In a statement, Lockheed Martin said, “we continuously assess the global rare earth supply chain to ensure access to critical materials that support our customers’ missions.” Raytheon Technologies and Northrop Grumman did not respond to requests for comment. Balladon said he believes US companies and their partners can still meet the challenge. “Ultimately, with the right support and partners across the industry,” he said, “we think we can make it happen.” The wider effort now hinges on whether new refining and supply arrangements can grow fast enough to support US defence demand while reducing reliance on China.
With PTI Inputs
– Ends
SOURCE :- TIMES OF INDIA
