Washington Bets on Rare Earth Players in an Effort to Escape China's Shadow

China’s rare earth export curbs have jolted Washington into a race to rebuild its supply chain. USA Rare Earth’sUSAR

$2.8B acquisition of Brazil’s Serra Verde Group is the latest move to loosen China’s grip on minerals vital to tech and defense. It’s a high-stakes push fueled by urgency, with government backing flowing to companies that promise output but have yet to prove it at scale.

Output illusion: USA Rare EarthUSAR

CEO Barbara Humpton calls the push for independence “the very early innings,” even as China controls about 90% of rare earths processing. The company previously secured a $1.6B non-binding deal with the Commerce Department despite having no active mine, aiming to build a full US supply chain. Its Serra Verde deal adds near-term supply, while the Round Top project in Texas remains unmined with low-grade, costly deposits. This push builds on a growing pipeline of government-backed projects across critical minerals.

• Backing has ramped across rare earth projects from mid-2025 through early 2026, including MP MaterialsMP
  and USA Rare Earth, to build a domestic supply.
• The push also spans lithium and copper, with Lithium AmericasLAC
  and Trilogy MetalsTMQ
  supported to secure broader critical mineral chains.

All Drill, No Deliver

Here’s where it gets contentious. USA Rare Earth still hasn’t completed a definitive feasibility study for Round Top, leaving the project’s economics uncertain despite decades of stalled development. Even so, it’s targeting commercial-scale mining by 2028 under an accelerated plan, while scrutiny builds over political ties after Cantor Fitzgerald backed its IPO and $1.5B raise. The concerns go beyond a single project and point to broader execution risks.

• Round Top’s complex mineral mix complicates processing, with much of its value tied to uranium, hafnium, and lithium rather than rare earths.
• That risk isn’t isolated, with other government-backed projects like Vulcan Elements and ReElement Technologies also raising concerns about financial viability.

Resilience gamble: The Trump administration’s approach mirrors venture capital, backing multiple companies so a few wins can still “move the needle,” as Adamas Intelligence’s Ryan Castilloux notes. It also means “taking greater risks” to build supply chain resilience, according to former State Department chief economist Heidi Crebo-Rediker. With China already using export curbs as leverage, Washington is betting speed matters more than certainty, even if these projects won’t “solve problems today.” The buildout is real and well funded, but turning deposits into viable output at scale is the part still to come.