Alaska Strikes Rare Earths, But China Still Holds the Keys to Processing Them

Geochemical testing confirmed the presence of all five permanent magnet rare earths at Graphite Creek, including neodymium, praseodymium, dysprosium, terbium, and samarium. The discovery matters because China controls roughly 70% of global rare earth mining and around 90% of processing, with 99% of heavy rare earths processing until recently. When your supplier also writes the export license rules, you don't have a supply chain. You have a dependency with an off switch.

For US manufacturers, the timeline to relief stretches years into the future. Graphite One is working with a Department of Energy National Lab to develop extraction methods and separation pathways for the rare earths, but the time horizon to build out a complete US rare earth supply chain remains at 15 to 20 years. Environmental and regulatory costs are the main reason the supply chain is not yet fully developed outside China. Saskatchewan's rare earth processing facility cost above $100 million for a single operation, and Lynas Rare Earths' first US refinery carries a price tag that has risen from an original $400 million, with unanticipated wastewater treatment challenges causing delays and cost increases.

Meanwhile, China's new export restrictions require government approval for any products containing even trace Chinese rare earth materials, with companies affiliated with foreign militaries largely denied export licenses starting December 1, 2025. Export data from May 2025 shows China's total exports of rare earth magnets fell 74% year-over-year, with US-specific shipments plummeting 93.3%. The squeeze is already happening.

For non-US companies, particularly European and Asian manufacturers, Alaska's potential production creates both opportunity and strategic complications. A UBS Evidence Labs report highlighted that dependence on China is most acute for graphite and rare earths among critical minerals. European automotive manufacturers face the same reality as their American counterparts: MP Materials' Fort Worth facility will begin producing 1,000 tons of neodymium-iron-boron magnets in 2025, compared to China's 240,000 tons in 2023. Even if Alaska reaches full production, global capacity gaps remain massive.

Tier suppliers across electronics, automotive, and defense sectors face immediate pressure. The new Chinese controls include parts, components and assemblies beyond isolated rare earth materials, potentially impacting energy, automotive, defense, semiconductors, aerospace, industrial motors and AI data centers. Companies built supply chains assuming Chinese materials would flow freely. Those assumptions just expired.

The broader pattern extends beyond rare earths. Australia's Serra Verde rare earths project, backed by the US-led Minerals Security Partnership, has ore already locked into offtake agreements with China for processing because China's overwhelming midstream dominance left no viable alternative. New mining projects keep feeding the same bottleneck they're meant to bypass.

The real story isn't geological. It's strategic. When competitive advantage depends on elements buried in adversarial territory, you're not optimizing logistics. You're managing compounding geopolitical exposure that resets with every product generation, every defense contract, every grid-scale battery installation. Companies that treated mineral sourcing as a procurement function are discovering it's a national security calculation that occasionally produces motors.

Alaska's discovery offers hope measured in decades, not quarters. Until domestic processing reaches scale, manufacturers remain exposed to export controls wielded as economic weapons. The era of assuming materials flow freely across borders just ended. The question isn't whether to diversify. It's whether you can move faster than your competitors while China still controls the refining infrastructure everyone needs.

In a world of black swans and cascading disruptions, this is what resilience in action looks like.