How U.S. Businesses Can Benefit From the Growth of Domestic Rare Earth Production

Analysis

How U.S. Businesses Can Benefit From the Growth of
Domestic Rare Earth Production

Most people do not understand how rare earth minerals push innovative technologies to a whole new level. Common technologies such as electric motors, wind turbines, semiconductors, and military technologies depend on these important minerals that remain almost unknown to the public.

For many years, American companies relied on purchasing rare earth minerals from foreign companies, particularly from China, which is said to possess more than 60% of the world’s mining resources and more than 90% of its processing capacity.

According to the IEA’s Global Critical Minerals Outlook, that concentration has created real exposure for American businesses, from price volatility to outright supply disruption.

That dependence is now being addressed at scale, as the American authorities are investing money, forming partnerships with other countries, and developing technologies that will allow early stand to gain the most from it.

Why This Shift Is Happening Now

The demand for essential minerals is rapidly growing due to the transition to clean energy, digital infrastructure expansion, and increasing defense requirements. This demand has shown how precarious import-dependent supply chains are, especially when a single country holds so much leverage.

Washington has responded with real capital behind the effort. For instance, Project Vault aims to establish reserves of strategic minerals, and its budget can reach $10 billion. Besides that, the Department of Energy and Export-Import Bank have allocated hundreds of millions of dollars more for processing facilities and new mining projects.

Internationally, the initiative called the 2026 Critical Minerals Ministerial brought together representatives from more than 50 nations to launch FORGE, aimed at diversifying mineral supply from various countries and not relying on a single source for imports.

Over $30 billion

allocated by the U.S. government to support this initiative and attract private investment.

Mining Without New Holes in the Ground

One of the more overlooked developments in this shift is how much of the new supply is coming from materials that already exist above ground.

Research conducted by Georgia Tech on byproduct recovery shows that using coal ash, kaolin tailings, and mine waste allows one to recover rare earths without additional mining.

11 million tons

of potentially recoverable rare earths could be held in U.S. coal ash alone.

Coal ash could potentially hold 11 million tons of recoverable rare earths in the US alone, meaning that it has almost eight times the current amount of rare elements reserves on land, according to University of Texas research.

This new method of obtaining rare elements should be viewed positively from an environmental perspective and is also beneficial to businesses that rely on the availability of rare materials in the future. As the need for permits becomes much lower with such products, new materials can be made available much sooner than with traditional mining.

This approach matters for businesses beyond its environmental appeal. Projects with a smaller land footprint typically face fewer permitting delays and less regulatory friction, which means new supply can come online faster than it would through conventional mining.

For companies trying to plan around future material availability, that speed is a meaningful advantage.

Where the Opportunity Is for Businesses

The policy and technology shifts create several concrete entry points for companies willing to engage now rather than waiting for the market to mature.

Secure supply through offtake agreements.

Securing contracts with domestic producers or recycling companies helps businesses avoid both price volatility and shortages associated with relying on imports.

Tap federal financing.

Government agencies like EXIM, the U.S. Department of Energy, and the Development Finance Corporation are providing funds to businesses engaged in supply chain projects. In other words, companies can access funds that were rarely available before.

Build ESG credentials that matter.

Availability of by-product recovery and sustainable sourcing provide companies with real green stories that positively resonate with investors, regulators, and consumers.

Move before the market solidifies.

Early engagement means better terms, stronger relationships with emerging producers and a seat at the table as industry standards take shape. Companies that wait until the supply chain is fully built out will be negotiating from a weaker position.

Industries Positioned to Benefit Most

While the opportunity touches nearly every sector, a few stand out:

Manufacturing

gains more predictable input costs and reduced exposure to overseas disruption.

Defense contractors

benefit directly from onshore magnet and component production tied to national security priorities.

Renewable energy and automotive companies

depend on rare earth magnets for turbines and EV motors, making supply security a direct input to growth plans.

Electronics and infrastructure firms

can build sourcing strategies around a more diversified, resilient base of suppliers.

Reality Check

What to Watch Out For

The opportunity is real, but it is not without friction. There has been progress in terms of obtaining necessary permits, but it requires patience. Capital intensity remains high for new processing facilities, and some of the more advanced recovery techniques are still being proven at commercial scale.

International competition adds another layer of complexity, particularly if other producers attempt to flood the market and undercut pricing for new domestic supply.

None of this erases the opportunity, but it does mean businesses need a clear-eyed strategy rather than a reactive one.

The Bottom Line

The increase in domestic production of rare earth minerals is not only about politics in Washington. This is a timing question for businesses that rely on these materials when producing their goods.

Companies that assess their exposure now, explore offtake and financing opportunities, and align themselves with the right partners will be better positioned than those who wait for the supply chain to fully mature.

Shepherd Strategies assists clients in various industries, including manufacturing, defense, energy, and infrastructure, with this type of transformation, offering services ranging from supply chain audits to policy involvement and financial strategy consultations.

If your business depends on critical minerals, now is the time to talk through what this transition means for you.

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In a world of sheep and wolves, we are the shepherds

Analysis

How U.S. Businesses Can Benefit From the Growth of
Domestic Rare Earth Production

In a world of sheep and wolves, we are the shepherds

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