REalloys CEO says U.S. rare-earth bottleneck lies in processing, not mining

Investing.com -- Western efforts to rebuild rare-earth supply chains are increasingly shifting toward processing and metallization rather than mining alone, according to REalloys CEO Lipi Sternheim, who told Investing.com that the real bottleneck in the industry sits squarely in the midstream of the value chain.

Most companies outside China are focused on mining deposits or producing light rare-earth oxides, Sternheim said in an interview.

However, he noted that REalloys, by contrast, is targeting the more technically complex stages such as refining, heavy rare-earth metallization and magnet manufacturing, areas where China has spent decades building industrial capacity.

“The industry often summarizes this dynamic with a simple phrase: ‘There’s no such thing as rare earth… there’s rare processing,’” Sternheim commented, noting that the most capital-intensive steps include metallization, alloying, and magnet production.

The company is developing what it describes as the first multi-source rare-earth midstream processing platform in North America.

Instead of relying on a single mine, REalloys plans to aggregate feedstock from multiple global sources and process it domestically. Sternheim explained that this approach reduces capital intensity while accelerating the timeline to production.

Initial heavy rare-earth metals production is expected in 2027, targeting materials such as dysprosium and terbium, critical inputs for high-performance magnets used in defense systems, aerospace technologies and advanced manufacturing.

Over the next 12 months, Sternheim identified key milestones, including commissioning rare-earth oxide production capacity at the Saskatchewan Research Council facility, deploying oxide-to-metal conversion technology for domestic metallization, and launching a pilot NdFeB magnet manufacturing facility in Euclid, Ohio.

The company recently strengthened its financing position through a capital raise and a $200 million letter of interest from the U.S. Export-Import Bank, though Sternheim said scaling a full rare-earth supply chain will likely involve project financing, strategic partners and offtake agreements.

“Our long-term plan anticipates a mix of project finance, strategic partners, government programs, and customer offtake agreements as we scale toward full magnet production capacity,” he stated.

REalloys recently announced a $1.7 million Defense Logistics Agency (DLA) contract that includes the engineering design for a 300-ton-a-year production facility built around modular reactors that can be rapidly scaled to meet demand from the Department of War and commercial markets.

Sternheim stated that the company will be the sole operator of the facility once it is built. However, he explained that “while the ultimate structure of a full-scale facility could include partnerships with government or industrial stakeholders,” REalloys is expected to play the “central operating role in scaling and deploying this technology platform.”

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