90% China Processing Share, 2027 US Ban to Boost Domestic Rare Earth Firms
China holds 90% of processed rare earths after a 30-year state-backed strategy that used predatory pricing, state financing and export controls. Updated DFARS rules effective January 1, 2027 will ban Chinese-origin rare earth materials in US defense systems, driving demand for domestic suppliers like The Metals Company.
1. China’s Rare Earth Processing Monopoly
Over three decades, China deliberately built a processing monopoly, controlling roughly 90% of global rare earth refining and metal-making through state-backed financing, predatory pricing and export controls designed to suppress foreign competitors.
2. Upcoming DFARS Ban on Chinese-Origin Materials
Beginning January 1, 2027, updated DFARS regulations will prohibit any Chinese-origin rare earths at all stages—from mining to fabrication—in US weapons systems, closing previous loopholes and triggering compliance audits and penalties.
3. Implications for The Metals Company
The Metals Company, as a non-Chinese rare earth miner and processor, stands to benefit from the ban through increased defense-sector demand. With few domestic alternatives currently available, the company could see a material uptick in contracts and strategic partnerships to supply critical rare earth metals.