Rare earth metals produced by US companies backed by the Trump administration—including MP Materials, Energy Fuels, and Phoenix Tailings—are being exported to Asian markets rather than supplying domestic demand, according to recent developments in the sector.
The three companies have collectively received billions of dollars in government support to develop American rare earth production capabilities. However, their products are flowing to Japanese and South Korean manufacturers, where the scale of magnet production remains significantly larger than emerging US operations. MP Materials, the largest US producer, sells its neodymium-praseodymium oxide primarily through a distribution agreement with Sumitomo Corporation of Americas to Japanese customers, with some material also going to an unnamed US technology company. Energy Fuels plans to send oxides to South Korea and has agreed to acquire a South Korean metal-making facility. Phoenix Tailings’ customers are predominantly Korean and Japanese firms seeking alternatives after China restricted rare earth exports.
The shortage of domestic demand reflects the nascent state of US magnet manufacturing. According to industry analysts, Japan produces 10,000-15,000 tonnes of neodymium iron boron magnets annually, South Korea produces 2,000-3,000 tonnes, while US production stands at 1,000 tonnes or less. China dominates global magnet production. The US government’s concern stems from Beijing’s control over critical minerals supplies, which are essential for defense systems, electric vehicles, and semiconductors.
Company executives indicated that Asian customers are willing to pay premium prices for rare earth materials given reduced Chinese exports. MP Materials has signed agreements with General Motors and Apple to supply magnets and expects to begin shipments to GM later this year. Energy Fuels announced a 1.9 billion dollar acquisition of German magnet maker Vacuumschmelze in June, while Phoenix Tailings received 500 million dollars in conditional government funding to expand production capacity.
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