China holds a dominant position in the global supply of rare earth elements (REEs), especially those used in permanent magnets vital for electric vehicles, wind turbines, military systems, and electronics. The country controls over 90% of global REE magnet production and nearly all processing capacity for heavy REEs. This monopoly has created vulnerabilities in Western supply chains, made stark by recent export restrictions amid escalating geopolitical tensions. As nations seek to transition to greener technologies and reduce strategic dependencies, finding reliable and sustainable alternatives to rare-earth magnets has become critical. Research into new materials like iron nitride and tetrataenite, along with innovations in recycling and additive manufacturing, offers hope—but industrial maturity is still a challenge. This urgency has sparked a global race, with several major players outside the Nordic region taking bold steps to challenge China’s magnetic monopoly.
Non-Nordic Global Competitors: Challenging China’s Magnet Monopoly
United States: Mining, Materials, and Manufacturing
The U.S. is leveraging public and private sectors to reduce dependence on Chinese REEs. California-based MP Materials operates the Mountain Pass mine, the only active rare-earth mine in the U.S. The company is expanding into magnet production, supported by Department of Defense funding. Texas-based startup Noveon Magnetics recycles REEs from used magnets and produces high-performance magnets in-house, creating a closed-loop supply chain. On the research front, Ames National Laboratory is leading efforts to develop alternatives like alnico and iron nitride magnets, supported by the Critical Materials Institute.
Japan: Early Diversification and Cutting-Edge R&D
Japan was an early mover in reducing REE reliance after a 2010 trade dispute with China. The country has invested heavily in alternative magnet research and REE recycling. Companies like Hitachi Metals and Daido Steel have pioneered magnets that use reduced amounts of heavy rare earths or eliminate them entirely. The National Institute for Materials Science (NIMS) conducts extensive research on iron-based and L10-phase magnets. Japan also maintains strategic REE reserves and offshore processing agreements with Vietnam and India.
Germany: Advanced Recycling and Industrial Strategy
Germany is focusing on high-tech recycling and advanced magnetic materials. Fraunhofer Institutes and RWTH Aachen University are developing scalable processes for REE magnet recovery from electronic waste. Vacuumschmelze GmbH, a global magnet manufacturer, is working on next-gen rare-earth-reduced magnets for automotive applications. Germany supports the European Raw Materials Alliance (ERMA), which aims to secure domestic REE value chains and fund innovation projects across the EU.
Australia: Mining Powerhouse with Upstream Ambitions
Australia is rich in rare earths and aims to move beyond extraction into processing and manufacturing. Lynas Rare Earths, the largest producer outside China, operates mines in Western Australia and a processing plant in Malaysia. With backing from the Australian and U.S. governments, Lynas is building a separation facility in Texas. Australia is also funding research into REE-free magnet technologies via the CSIRO and universities like UNSW.
South Korea: Strategic Partnerships and Magnetic R&D
South Korea is investing in securing REE supply chains and developing magnetic materials through public-private partnerships. Hyundai and LG are backing local startups to build domestic magnet production capacity. The Korea Institute of Materials Science (KIMS) leads research on REE alternatives and magnetic alloys. South Korea is also forging resource diplomacy with African and Southeast Asian nations to diversify its supply base.
Photo: Gregory F. Maxwell <gmaxwell@gmail.com> Ferrofluid on a reflective glass plate under the influence of a strong magnetic field.
