Domestic Rare Earth Refining Becomes Critical as China Tightens Export Controls on Strategic Minerals

The global critical mineral market is undergoing a fundamental shift. As China restricts exports of essential rare earth elements and related compounds, a new window of opportunity has opened for U.S.-based producers capable of scaling domestic refining operations. ReElement Technologies Corporation, a subsidiary of American Resources Corporation (NASDAQ:AREC), is positioning itself at the center of this transformation with what industry observers describe as the nation’s most advanced, cost-competitive refining infrastructure.

The Supply Chain Crisis: Why Domestic Refining Matters Now

The restrictions imposed by China on April 3, 2025, targeting samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium compounds have crystallized a long-standing vulnerability in the American supply chain. These materials are essential for defense systems, advanced electronics, renewable energy technologies, and battery production. Unlike upstream mining operations, the refining and purification of rare earth minerals has remained a significant bottleneck—one that ReElement Technologies has engineered a solution for.

Traditional rare earth refining relies on hundreds of mixer-settler units requiring hazardous organic solvents and enormous capital investments. The modular chromatographic platform deployed by ReElement fundamentally disrupts this model. Through Ligand Assisted Displacement (LAD) chromatography, the company achieves high-purity separations using aqueous chemistry while reducing physical infrastructure requirements by orders of magnitude.

Proven Performance: Converting Feedstock to Defense-Grade Materials

ReElement’s operational track record demonstrates viability at commercial scale. The company has successfully separated and purified rare earth oxides to 99.5% purity levels from both ore feedstock and recycled permanent magnets, including neodymium and praseodymium. Heavy rare earth elements—historically the most difficult to process—have been separated with 99.5%+ efficiency for dysprosium and terbium oxides.

Beyond rare earths, ReElement has expanded into adjacent critical materials. Antimony, now subject to export restrictions, has been refined to 99.7% purity from stibnite ore. Battery-related materials show equally impressive results: lithium carbonate extraction from LFP battery scrap reaches 99.9978% purity, while recycled nickel sulfate from battery solutions consistently exceeds 99.5%.

The company’s technical roadmap extends to yttrium, gallium, germanium, and molybdenum—additional elements subject to Chinese export controls or supply disruptions.

Technology Edge: Scalability Without Sacrifice

What distinguishes ReElement’s approach is the combination of three traditionally opposing attributes: cost efficiency, environmental sustainability, and production flexibility. The LAD chromatography process eliminates dependency on toxic organic solvents, replacing them with aqueous chemistry that reduces both environmental risk and operational overhead.

The modular design means production capacity scales incrementally rather than requiring massive plant expansions. As domestic feedstock availability grows—whether from conventional mining, recycled magnets, or coal-derived waste streams—refining capacity can expand proportionally. This addresses a critical vulnerability in the current supply chain: the inability of existing infrastructure to absorb increased domestic ore production.

Policy Momentum: Executive Actions Align with Industrial Capacity

Three recent executive orders have created a regulatory framework favorable to domestic critical mineral production. Orders targeting “immediate measures to increase American mineral production,” investigating foreign mineral dependence risks, and supporting domestic energy production establish clear national security priorities. American Resources and ReElement have developed integrated technologies to monetize coal tailings and mine waste, enabling co-production of critical elements during land remediation—a capability that aligns directly with these policy objectives.

The timing presents an unusual convergence: government demand for supply chain independence, demonstrated production capability, and market price signals all pointing toward expanded domestic refining operations.

Market Opportunity Emerges from Constraint

The previous assumption that global rare earth markets were fixed is now obsolete. Chinese export restrictions are not temporary negotiating positions; they reflect a deliberate strategy to secure control over downstream manufacturing. This creates sustained demand for alternative sources.

ReElement positions American Resources with differentiated assets: not just refining capacity, but multi-feedstock versatility that can process ore, recycled materials, and waste streams. Mark Jensen, CEO of both entities, emphasized that ReElement represents “the only U.S. company actively refining and separating heavy rare earth elements under Chinese export control.” This distinction matters less as a marketing claim and more as operational reality—the infrastructure exists domestically in few locations.

For companies, defense contractors, and government agencies accustomed to global supply chains, the calculus is shifting. The question is no longer whether to diversify suppliers, but how quickly domestic options can scale. ReElement Technologies’ platform suggests the answer: faster than traditional refining models would indicate possible.

The next phase will determine whether this technical capability translates into market share and revenue. The opportunity window remains open—but it will not remain indefinite.