IonicRE eyes multiple magnet recycling plants in USA amid push for sovereign supply

Ionic Rare Earths Ltd (ASX:IXR, OTC:IXRRF) plans to establish several magnet recycling facilities across the United States, aiming to address near-term shortages in rare earth oxides (REOs) and support US efforts to eliminate Chinese-origin critical minerals from its defence and industrial supply chains. 

Discussions are underway with multiple US-based groups, with support from both the private sector and government stakeholders. The move follows escalating concerns over supply chain vulnerabilities after China introduced rare earth export restrictions in April.

The proposed facilities would utilise proprietary separation and refining technology developed by Ionic Technologies, IonicRE’s 100%-owned UK subsidiary. These operations are intended to process both end-of-life magnets and manufacturing swarf to produce high-purity REOs — critical to electric vehicles, wind turbines and defence systems. 

Samples from Ionic’s demonstration plant in Belfast have been dispatched to potential US partners to advance technical and investment due diligence.

“IonicRE has been working through several iterations of supply chain resilience with US-based parties for some time now, and recent discussions have focused on immediate activities to address near-term shortages in access to these critical elements for advanced manufacturing and defence,” IonicRE managing director Tim Harrison said.

“We believe that our patented magnet recycling technology delivering separated magnet rare earth oxides provides a strategic foil and first-step solution to a much larger primary supply chain solution that will require substantial capital and time investment to resolve.”

Driving strategic supply chain resilience

IXR’s initiative aligns with the Trump administration’s executive order calling for the United States to become a leading processor of non-fuel minerals, including rare earths. 

As US demand for REOs escalates — especially neodymium, praseodymium, dysprosium and terbium for NdFeB magnets — the company is positioning its technology as a near-term solution. The recycling strategy also targets restricted elements such as samarium and scandium, which are vital to defence and automotive applications.

“During this window, we can envisage several recycling facilities providing supply chain relief for key applications in the US and other closely aligned markets, adding to our existing partnerships in the UK, Europe, South Korea and Brazil,” Harrison said.

The US Department of Defense has mandated the elimination of Chinese-origin rare earth elements (REEs) in all defence systems by January 1, 2027. 

Phase 1 prohibits delivery of items containing Chinese-sourced NdFeB or samarium-cobalt (SmCo) magnets, with a full supply chain ban to follow. IonicRE’s technology could provide an essential domestic alternative during this critical transition period.

International expansion and joint venture activity

IonicRE’s strategy builds on global expansion efforts already underway in Europe, South Korea and Brazil. 

In the United States, the company is also evaluating a rare earth refinery under its 50:50 Viridion joint venture with Viridis Mining and Minerals Ltd (ASX:VMM). The Brazilian counterpart to this initiative is supported by government funding and has already delivered recycled magnet REO feedstock to local manufacturers.

The company’s expansion reflects a circular economy model for rare earths, integrating mining, refining and recycling across multiple jurisdictions. Its Belfast-based demonstration plant has achieved REO purity levels exceeding 99.9% and has drawn interest from stakeholders seeking a reliable, lower-emission alternative to traditional mining.

US targets rare earth supply chain independence by 2027

The United States is accelerating efforts to eliminate reliance on Chinese rare earths in defence systems by 2027, driven by bipartisan policy initiatives spanning both the Biden and Trump administrations.

Key legislative steps began with the National Defense Authorization Acts (NDAA) for FY2023 and FY2024, which introduced phased restrictions on Chinese-origin rare earth magnets in defence platforms. These were reinforced through updates to the Defense Federal Acquisition Regulation Supplement (DFARS), outlining a two-stage ban:

1. Phase 1 (until end-2026): Contractors are prohibited from supplying end items with magnets melted or produced in China, Russia, Iran or North Korea. However, magnets using Chinese-origin feedstock may still be used if processed elsewhere.
2. Phase 2 (from January 1, 2027): The ban will extend to cover the full magnet supply chain, including mining, refining, alloying and manufacturing. Any involvement from covered countries will disqualify the product.

In response, the DoD and defence suppliers are actively seeking domestic sources for separated REOs, particularly neodymium, praseodymium, dysprosium, terbium and samarium.

Despite a temporary easing of tensions between the US and China, the broader global supply outlook for rare earths remains constrained, prompting continued diversification efforts across allied nations.

“The US is demanding ‘independence day’ in rare earths supply, without which both its economy and defence industry are critically exposed... Ionic Rare Earths via our magnet recycling technology is capable of playing a vital role as a low-capex, low-emission and rapid potential source of domestic rare earths supply,” IXR executive chairman Brett Lynch said.

Technology overview and future outlook

Ionic Technologies, established in 2015 as a spinout from Queen’s University Belfast, offers a proprietary method for recovering REOs from low-grade or waste magnets. The process is efficient, non-hazardous and scalable, with significantly reduced environmental impact compared to traditional extraction methods.

With active engagement from potential partners and an established platform in Belfast, IonicRE is accelerating efforts to commercialise its magnet recycling process globally. This includes scaling production to meet surging demand across the electric mobility, renewable energy and defence sectors.