Critical Minerals: Bringing Processing Home

By Leslie Meredith

North America’s push to secure critical minerals is opening a multi-billion-dollar logistics opportunity. Hatch Logistics, Fracht North America and Notable Bridging Solutions share their views.

From Issue 3, 2026 of Breakbulk Magazine

(7-minute read)

The road to critical minerals independence for the United States involves an entire industrial sector in which the nation currently has very little domestic experience.

Beyond restarting shuttered mines and establishing strategic partnerships with friendly nations, the country faces a big task: establishing midstream mineral processing, chemical refining and the advanced manufacturing required to turn rare earth elements and other critical minerals into high-spec components.

Capital on a Massive Scale

“Between now and 2040, you have US$700 billion that’s going to be invested in mining projects globally, with the Americas being 70%,” says Sharan Swaminathan, who spent over 15 years leading finance, commercial and supply chain teams at BHP before joining Fracht North America as vice president of Industrials. “Within that, you’ve got Chile, Argentina, Peru, the U.S. and Canada as the big opportunities. If nobody does anything about it right now, there’ll be a shortage of minerals by 2035, 2040. So investments are happening today … in our own backyard.”

Unlike bulk commodities such as iron ore or coal, the energy transition and defense modernization demand a massive pivot toward copper, lithium, cobalt, nickel and rare earths, forcing developers to build entirely new domestic processing corridors.

Permanent rare earth magnets are essential for modern defense platforms, electric vehicle motors, robotics and radar systems. For decades, the U.S. has relied heavily on China, which controls approximately 70% of global rare earth extraction, nearly 90% of processing and refining, and over 90% of magnet manufacturing.

Federal mandates are now forcing a major supply chain shift. Under Department of Defense rules, Chinese-origin rare earth and other materials will be prohibited from use in U.S. military defense systems starting Jan. 1, 2027. The new DFARS rule closes a loophole that allowed defense contractors to buy oxides or alloys mined in China, process or melt them in a third country (such as Vietnam or Japan), and then classify the resulting magnet as compliant. No more. All such purchased materials must be free of Chinese-origin material.

Can the domestic supply chain meet that demand in time? Lyle Effio, a former Army Ranger with 25 years leading transportation and logistics operations in military support roles, previously advised private equity firms and now focuses on critical minerals, industrials and energy resilience investments that strengthen critical infrastructure security, gives a blunt assessment: “The simple answer is no.”

Breaking the Processing Bottleneck

The public conversation often treats critical minerals as a straightforward mining story, but experts point out that the real hurdle is downstream processing and metallurgy.

“There is no primary yttrium or gallium mine,” Effio says. “You’re mining gold, copper and then you’re getting antimony, zinc. You’re getting rare earths in there. You’re getting platinum group metals. Through other more advanced processes, you’re starting to get the rare earths as a secondary benefit.”

Taking those secondary elements and converting them into aerospace-grade or semiconductor-grade materials requires complex multistage solvent extraction, refining and alloying facilities that take anywhere from three to seven years to build.

“We may have rare earth production out of the mines in the next 18 months,” says Effio. “But is it refined to the spec: the 5N quality, the aerospace grade or the semiconductor grade that’s required? Well, the answer is likely no. We won’t meet the 2027 deadline, but the multi-decade buildout is inevitable and unavoidable. While integrated operations are emerging, mining, separation, refining and magnet production, we don’t yet have enough scale or speed across the sector. Many are still operating as disconnected stages rather than synchronized supply chains.”

Drawing on his time as a DARPA fellow, Effio points out that technical experts often lack the business and supply chain acumen needed to commercialize complex assets.

“A mining expert is not a marketing guy, is not a government affairs guy, is not a capital markets guy,” Effio says. “You have a bunch of these domains that need to be synchronized, coordinated. That’s something at DARPA we talked about often. You don’t want your data scientist expert working on the business plan. You want them jamming on the code. If you’re building advanced missiles, I don’t want you to worry about financing. I want you to build the best thing.”

Major global mining corporations have historically avoided rare earth processing because the risk profile and economics did not match their bulk-commodity business models. That vacuum is now being filled by a handful of specialized processors, refiners and magnet makers supported by government grants and offtake contracts. Most of these companies are less than 10 years old, and the older ones are under new ownership.

The Permitting Trap and the Knowledge Gap

Even with billions in capital and strong policy support, the domestic buildout faces regulatory obstacles that project teams must factor into their schedules.

“You kind of get this chicken-and-the-egg problem when it comes to deploying capital at the state and local level,” Effio says. “While federal policy is now actively coordinating to streamline permitting for critical infrastructure, non-federal projects still face fragmented state and municipal approval processes.

“Federal infrastructure projects like Tooele bypass these state/ local constraints through Executive Order 14241, but commercial private projects remain vulnerable to local litigation and municipal delays. The same government that is potentially going to grant to you the funds to accelerate your project is also the government that may not give you that environmental permit.”

Effio points out that without systemic regulatory reform or federal intervention, new processing facilities and reopened mines risk being stopped before construction begins.

“When you enter an area as a startup or even as a current established company in the processing game, and you’re going to build a rare earth processing facility,” Effio says. “Even if you get it approved through the city and the state, there’s nothing stopping a local resident that lives 10 miles from it from filing an environmental air quality lawsuit.” The civil litigation can delay a project until it is no longer viable.

To break the logjam, Effio argues that the federal government must establish a clear national-security mechanism to protect critical supply chain infrastructure.

“The government has to have some type of conversation that this is critical infrastructure. For our national security, we have to have it,” Effio says. “Will the proper [environmental] measures be taken into account? Yes. But there has to be some type of national security override of saying, hey look, it’s in our national imperative that we have to do this. Policymakers and decision makers have to make those hard calls.”

Behind the permitting hurdle comes a human problem: a whole generation of mining and metallurgical expertise has vanished from the active workforce. Much of what is known about U.S. deposits in now defunct mines exists only in the memories and personal files of retired veterans in their 70s and 80s.

“When that company was shut down, where did those legacy documents, corporate mining surveys, where’d all that stuff go? Thirty years ago, it wasn’t into a computer; it’s in someone’s brain,” Effio says. “One of these guys will stop and say, ‘Hold on, I think I have that,’ and turn right around in his chair. He’ll say, ‘Hey, I remember Round Top 20 years ago when I was the master surveyor.’ I’ll ask him, ‘Are you kidding me? You had it sitting right behind you?’ And he’ll reply, ‘Oh yeah, I saw this on the news and remembered surveying it 25 years ago.’ While geologists and surveyors have recently begun site assessments, commercial-scale production hasn’t touched these deposits in decades.

“Companies and government agencies should actively engage these subject matter experts who hold decades of institutional knowledge about domestic deposits, legacy mining operations and historical geological data.”

Using Buildout Models to Predict Viability

Once a project has been defined, you can use that information to assess the likelihood that it will be greenlighted. Processing facilities come in three main types, and here’s a brief description of each, along with several examples.

1. Military-Hosted Facilities (Fastest Approvals and Highest Likelihood to Proceed) Projects situated on active federal military land under Executive Order 14241 avoid municipal zoning disputes, local civil litigation and protracted environmental review cycles. Backed by guaranteed defense demand, these sites have the shortest path to construction. At Tooele Army Depot in Utah, REalloys has been selected under a long-term Army lease to build a heavy rare earth separation facility for dysprosium and terbium, alongside Ioneer’s planned commercial boron plant, targeting development starting in 2027 and initial operations in 2028.

2. Downstream Magnet and Alloy Plants (Standard Industrial Permitting) Facilities that convert refined metals into finished magnets face low environmental opposition because they do not handle raw ore extraction or radioactive tailings like thorium and uranium. They permit like standard advanced manufacturing facilities and benefit from direct automotive and defense offtake agreements. In Fort Worth, Texas, MP Materials is expanding sintered NdFeB magnet manufacturing backed by a 10-year military purchase commitment. In San Marcos, Texas, Noveon Magnetics operates a commercial plant producing permanent magnets from recycled feedstock. In Cherokee County, South Carolina, USA Rare Earth is investing $1.2 billion in a plant designed to produce 6,400 tonnes of permanent magnets and 5,000 tonnes of specialized alloys annually.

3. Integrated Chemical Refineries (High Heavy-Lift Demand but Longer Permitting Horizons)

Greenfield hydrometallurgy and solvent extraction refineries carry the highest regulatory hurdle and public scrutiny. When backed by state or provincial governments using closed-loop, zero-liquid-discharge designs, they represent major capital investments requiring large autoclaves, chemical tanks and heavy modular skids. Canada’s Saskatchewan Research Council (SRC) has built a US$200 million facility in Saskatoon that combines automated solvent extraction with metal smelting to produce 525 tonnes per year of NdPr metal. In Utah, Energy Fuels is expanding commercial rare earth carbonate processing and downstream metallization at its White Mesa site.

Get in Early

Building this integrated industry requires specialized transport, heavy lifting and complex project engineering long before commercial production begins.

“Integrated rare earth developments are fundamentally different because they often seek to establish multiple stages of processing that may not currently exist domestically,” says Jonathan Cournoyer, global logistics lead at Hatch, an EPC firm based in Canada, known for its mining projects. “Instead of building a single operation, developers may be creating an entire value chain that includes mining, concentration, separation, refining, metals production and ultimately magnet manufacturing. The result is a much higher degree of interface management.”

Cournoyer stresses that logistics planning must be integrated into the earliest engineering phases rather than treated as an afterthought.

“Logistics decisions influence project outcomes long before the first shipment is activated,” Cournoyer explains. “During feasibility and early engineering, logistics can help determine equipment sizing limits, modularization opportunities, site selection criteria, trade compliance requirements, transportation corridors, port strategies, rail access requirements, laydown needs and construction sequencing approaches. The ability or inability to move a large process module by road, rail or barge may directly impact engineering decisions, fabrication strategies and overall project economics.”

Cournoyer outlines the capabilities engineering firms demand from logistics partners: “For logistics providers, we look far beyond transportation capability. The strongest providers understand engineering schedules, procurement processes, customs compliance, risk management and construction requirements. They can contribute during early project planning, not simply execute shipments after a purchase order has been issued.”

Swaminathan agrees that new mine sites create unique route survey and due diligence requirements for forwarders.

“Because of where some of these new deposits are, they’re in locations that have not been accessed before, which means there’s more due diligence required,” Swaminathan says. “More route surveys are required, along with understanding impact to community and understanding the risks with some of these projects being in mountainous areas.”

Effio notes that project forwarders should be actively consulting with developers on midstream and outbound infrastructure.

“A logistics provider should be knocking down doors of any processing company, magnet making company, mining company,” Effio says. “A lot of people talk about how you don’t need to own the mine, you need to own the picks and shovels. These guys are building a mine and rock has to move. Is it going on a truck? Is it going on a train? Oh wait, there’s no train tracks. This is going to be a 50-year project. Maybe we should talk to the railroad.”

Patience Will Pay Off

Securing North America’s critical supply chain will take years of disciplined execution, international collaboration and heavy industrial investment.

Commercial end-users are gradually realizing that their technologies depend entirely on this buildout. “I’ve talked to a lot of folks in tech and defense tech who will not invest in a mine, like a hard stop,” Effio says. “I remind them that they’re building these solar deals or 80% of their portfolio is in tech. Do you know that none of that tech will be built without mining and processing the materials? That means supply constraints on next-generation electronics will accelerate. Without domestic processing, we’re dependent on geopolitical goodwill to maintain tech innovation cycles.”

He adds that domestic security requires working closely with international partners: “We will not be able to do it domestically alone. We’re thinking about it wrong if we’re not thinking internationally.”

For the breakbulk community, this extended timeline is an asset. Unlike fast-moving market bubbles, building a multi-stage minerals corridor creates a multi-decade development cycle where service sectors up and down the supply chain are needed.

“It’s going to happen whether we like it or not,” Effio says. “The supply chain is flexible, it is resilient. Companies have to make money, so they are incentivized to fix it. There’s a lot of opportunity zones for the folks in the middle who are moving things.”

Read more: What It Takes To Win Rare Earth Processing Work

Top photo: Earth moving at Rio Tinto and BHP’s Resolution Copper project in Arizona. Credit: Rio Tinto.