United States: Domestic rare earth production push – ING

ING’s report by Coco Zhang and Ewa Manthey explains how the United States is enhancing domestic Rare earth production. Federal support now includes grants, loans, equity stakes, purchase agreements and price floors for key products like NdPr oxide and magnets. New refining and magnet capacity is being announced, though high production costs mean some segments will scale more slowly.

Government-backed capacity expansion

"Federal support has extended well beyond the traditional tools of grants and loans, to purchase agreements, price floors, and equity investments."

"In June 2026, the Department of Commerce struck a deal with USA Rare Earth. In addition to $277m in direct grants and a $1.3bn senior secured loan to help develop vertically integrated production, the government will also acquire a 16% equity stake in the company, giving it a direct interest in the development of a domestic rare earth supply chain."

"Similarly, in 2025, the Department of Defence (DOD) announced it would acquire a 15% stake in MP Materials, alongside a 10-year purchase agreement for the company’s magnets and a 10-year price floor for neodymium-praseodymium (NdPr) oxide, a critical input for permanent magnets."

"These developments suggest government support is beginning to deliver results, with rising output in key supply chain bottlenecks and an ambitious pipeline of new capacity. However, high production costs remain key hurdles."

"As a result, some parts of the supply chain could scale rapidly, while others will take longer to develop."