A small refinery in New Hampshire is at the centre of a major US push to reduce its dependence on China for critical minerals used in weapons, aerospace and advanced technologies. A giant American flag hanging on the warehouse wall reflects the national importance attached to the materials being processed inside.
Inside the Phoenix Tailings facility in Exeter, workers are extracting valuable elements from mining waste stored in large one-tonne bags.
The company uses electrolysis to separate critical minerals from the powder left behind after traditional mining operations — a process Washington sees as crucial to rebuilding a domestic supply chain.
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Pentagon-backed expansion to boost US mineral production
Phoenix Tailings is preparing for a major expansion after securing a $500-million loan from the Pentagon. The company plans to build a new factory that will significantly increase its ability to separate and produce critical metals.
The new facility is expected to take 14 to 18 months to build and will focus on one of the weakest stages in the US mines-to-magnets supply chain — separation and metallisation.
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The company says the expansion is aimed at producing metals including neodymium, praseodymium, terbium, dysprosium, samarium and yttrium, which are required in defence, aerospace and automotive industries.
“We call it the Freedom facility because, ultimately, the purpose of this is to ensure that the entire Western Hemisphere, the United States and its allies are free of Chinese influence within the rare-earth space,” Anthony Balladon, chief commercial officer and co-founder of Phoenix Tailings was quoted as saying by news agency Associated Press.
Critical minerals become a defence priority
The urgency around these materials has grown as conflicts in the Middle East put pressure on US weapons supplies.
Critical minerals are essential components in systems such as Tomahawk cruise missiles, THAAD interceptors and F-35 fighter jets.
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At the same time, the White House has pushed defence contractors to increase weapons production while imposing stricter restrictions on sourcing critical mineral components from China.
Mining waste becomes new source of rare earth elements
While the US is attempting to revive domestic mining, many new mines are still years away from becoming operational. As a result, companies are looking at alternative sources, including waste left behind by existing mining operations.
Phoenix Tailings uses mining waste, along with recycled magnets and disk drives, as raw materials for extracting critical minerals.
At its facility, technicians wearing heat-resistant suits and sealed face masks operate equipment that uses electricity to remove oxygen from mineral oxides, producing a greyish metal known as neodymium-praseodymium.
The material is used to make powerful permanent magnets found in fighter jets, missiles, radar systems and drones.
Balladon said critical minerals have a major impact on defence systems despite their relatively small cost compared with the overall value of weapons. “A $150-million weapons system won’t work if it’s missing critical minerals that may be worth only $20,000 to $30,000,” he said.
US production remains far behind demand
Phoenix Tailings is among the few companies capable of producing final metal products, according to Balladon. However, its current production capacity remains limited at around 200 kilograms (440 pounds) a year.
The US defence sector has a particularly strong requirement for samarium, needing between 50 and 100 tons annually, while domestic production remains limited.
Companies look overseas as they rebuild supply chains
The challenge has also pushed other US companies to search for alternatives outside China.
Arnold Magnetic Technologies, a US magnet maker, previously depended on China for samarium used in high-strength magnets for precision-guided missiles, including Tomahawks.
The company has now turned to France, where Solvay restarted rare-earth processing operations at its La Rochelle facility after previously stopping them in the 2000s.
Dependence on China remains a challenge
Despite efforts to increase domestic production, some minerals remain difficult for the US to replace.
Brodie Sutherland, chief executive officer of Patriot Critical Minerals Corp., said the US may struggle to move away from Chinese tungsten supplies before a Pentagon deadline of January 1, 2027.
The US currently depends entirely on imports for tungsten, with China controlling around 80% of global mine supply and an even larger share of processing.
(With inputs from AP)