- China’s actions have dramatically escalated since April 2025, when it announced export restrictions.
- Once raw rare earth ores are mined, the most technically complex, costly and regulatory-sensitive steps are separation, refining and magnet manufacturing.
- Ucore Rare Metals is stepping in to help alleviate the bottleneck.
When supply chains are weaponized, entire industries hang in the balance. China’s 2025 export licensing and control measures over rare-earth alloys, mixtures and magnets have become a real bottleneck for manufacturers and defense companies that rely on those materials. Ucore Rare Metals (TSX.V: UCU) (OTCQX: UURAF) is stepping into that gap, advancing its RapidSX(TM) processing technology and a U.S.-aligned rare-earth strategy aimed at reducing dependence on China and ensuring early production by next year.
China’s actions have dramatically escalated since April 2025, when it announced export restrictions on seven medium and heavy rare-earth elements, including samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium, along with related permanent magnets and mixtures. These export controls cover all destination countries, not just the United States, meaning that companies which are normally secure in their supply chains, including many in the defense sector, suddenly face delays or uncertainty in accessing essential materials.
Automakers, electronics companies, aerospace firms and manufacturers of components for defense systems have sounded alarms. Reuters reported that Germany’s automakers are warning that China’s restrictions could force production halts without rapid licensing or alternative sourcing (https://ibn.fm/HtDhL).
Even more striking is how specialized some of the blocked materials are: rare‐earth magnets and components that are critical for permanent magnet motors used in electric vehicles, drones, weapon systems, guidance systems and sensors. In mid-June 2025, the Chinese government began issuing a small number of export licenses for some magnets and alloys, but the backlog of unprocessed applications remains large (https://ibn.fm/nNpXT).
The partial licensing has offered temporary relief for U.S. automakers and European manufacturers, but many warn the instability remains. The trade truce talks between the United States and China left some military‐use magnets unlicensed, a point of tension and concern for companies that build both consumer goods and defense hardware.
The control over exports acts as a bottleneck because once raw rare-earth ores are mined, the most technically complex, costly and regulatory-sensitive steps are separation, refining and magnet manufacturing. China still dominates those mid- and downstream steps globally. Even if raw supply is available elsewhere, without licensed, high-quality separation and refining capacity in the U.S. or allied nations, companies remain vulnerable.
In some cases, U.S. defense or aerospace contractors have reported that they cannot obtain particular specialty magnet grades necessary for systems unless they are approved via these constrained licensing channels. This uncertainty affects procurement and scheduling, and in many cases it has pushed firms to look for stockpiles or alternative suppliers, which can be more expensive or less reliable.
Ucore Rare Metals is stepping in to help alleviate the problem (https://ibn.fm/rou3P). The company has gained notable momentum with U.S. government support. In May 2025, Ucore secured a $18.4 million funding agreement with the U.S. Department of Defense to advance its RapidSX separation technology toward full-scale production in its Strategic Metals Complex in Alexandria, Louisiana (https://ibn.fm/E2ITq). The funding covers construction of a production-ready RapidSX machine, infrastructure and tech transfer from its Canadian demonstration facility. The goal is to reach early production of rare-earth oxide products in the second half of 2026.
RapidSX is Ucore’s proprietary processing technology platform designed to separate and purify both heavy and light rare-earth elements more efficiently, with modular scalable units and a smaller environmental footprint than many conventional solvent extraction methods (https://ibn.fm/10I3E). Ucore’s Commercial Demonstration Facility in Kingston, Ontario, has already been operating with its demo plant largely continuously processing mixed feedstocks and testing flow sheets to validate the RapidSX system’s performance. These demonstration runs help de-risk the scale-up to the Louisiana Strategic Metals Complex (“SMC”).
On top of technology, Ucore is addressing regulatory and financial levers. The project in Louisiana has received tax incentives from the state, including an Industrial Tax Exemption Program estimated to save about $8.2 million over a 10-year period for the facility, and longstanding lease arrangements, land acquisition and site preparation work. Feedstock partnerships are being developed, bolstering non-China-sourced materials.
All of this positions Ucore to potentially produce rare-earth oxide (“REO”) or total rare-earth oxide (“TREO”) outputs first in modest volumes, ramping up toward thousands of tonnes annually as its SMC comes online. The licensing bottleneck that China’s restrictions have imposed has highlighted the strategic urgency for companies such as Ucore. If Ucore meets its 2026 milestone, it could become a key Western source of REEs and magnets, reducing the vulnerability of U.S. manufacturers and defense contractors to external supply risks.
For more information, visit www.Ucore.com.
NOTE TO INVESTORS: The latest news and updates relating to UURAF are available in the company’s newsroom at https://ibn.fm/UURAF
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