The past year has marked a significant shift in how North America is approaching the development of rare earth elements and critical minerals. A wave of government-backed investments and coordinated funding initiatives has transformed the landscape, signaling a move away from reliance on traditional private-sector financing toward a more strategic and publicly supported approach. This change reflects broader geopolitical realities, especially the desire of the U.S. and Canada to build resilient supply chains and reduce dependence on Chinese dominance in critical mineral markets.
In the United States, the Export-Import Bank (EXIM) plays a central role in this shift. It has recently issued a letter of interest for up to $200 million to REAlloys Inc., aiming to support the development of downstream processing and magnet manufacturing facilities in North America. This move is part of a broader U.S. strategy driven by national security and energy independence goals. The government’s approach is notable for its willingness to finance up to 60–70% of project costs, a stark contrast to the traditional private investment models that often favor a much higher equity stake. Such support reduces financing costs and accelerates project timelines, making it easier for companies to advance critical mineral projects more quickly.
Canada has also stepped forward with similar intentions. With a commitment of C$6.4 billion across G-7 nations, the Canadian government is actively funding projects from resource extraction to processing and manufacturing. A notable example is the support for Ucore Rare Metals’ (TSXV: UCU, OTCQX: UURAF) processing facility in Saskatchewan, where federal funds are helping establish the first commercial-scale rare earth processing plant in North America. This facility aims to produce 400 metric tons of rare earth oxides annually, focusing on heavy rare earths such as samarium and gadolinium, which are critical for military and technological uses.
The broader investment environment in North America reveals a deliberate push to develop a full supply chain for rare earths and other critical minerals. This includes exploration and resource development projects, with some aimed at extracting elements like niobium, scandium, and other specialty metals. For instance, NioCorp Developments (NASDAQ: NB) is pushing forward on its Elk Creek project in Nebraska, which is set to become North America’s highest-grade niobium deposit. In addition, efforts are underway to develop processing and recycling capabilities, such as Saskatchewan Research Council’s commercial-scale plant, which produces separated rare earth oxides for manufacturing.
The rationale for these investments extends beyond securing raw materials; they are closely tied to technological needs, primarily the production of rare earth magnets used in electric vehicles and wind turbines. Countries are trying to establish capabilities that can reduce their reliance on Chinese processing and refining facilities, which currently control roughly 85% or more of the global supply. This dependency poses risks not only to supply security but also to pricing stability, especially as demand for electrification and clean energy accelerates.
Parallel to government investment, market-driven phenomena are apparent. Industry leaders, including Ucore Rare Metals, are exploring partnerships and investments that can enhance their processing capabilities and create more integrated supply chains. These efforts often include commitments to sustainability, with technology designed to recover and recycle critical materials from waste streams, a move that adds resilience and reduces environmental impacts.
Overall, the North American sector’s funding spree is driven by multiple factors. Geopolitics has played a major role, with authorities seeking to insulate their economies from market shocks and political tensions. Strategic funding aims to create a domestic supply of crucial materials, ensuring that critical industries such as defense, renewable energy, and electronics have reliable access to the raw inputs they need to grow. The scale of investments and the coordinated public-private efforts underscore a fundamental shift: developing a critical minerals infrastructure is now viewed as a matter of national security rather than just market economics.
For companies in this space, this environment offers both opportunities and challenges. The flush of government support can reduce financing hurdles and timeframes, but it also requires navigating regulatory processes and meeting high standards for environmental and community engagement. Whether it is through refining, resource development, or technology innovation, the ongoing expansion of critical minerals efforts across North America signals a long-term commitment to building resilient, domestic supply chains, one project, one investment at a time.Â
