Neodymium magnets and samarium-cobalt magnets, which generate the powerful magnetic fields essential to electric vehicle drive motors, offshore wind turbines, and defense guidance systems, rely on rare earth elements—neodymium, praseodymium, dysprosium, and terbium among them. For years, China has maintained overwhelming dominance across the mining-to-refining supply chain for these materials. As Western industry and governments scramble to reduce their dependence on China and secure alternative sources, magnet recycling—recovering rare earths directly from end-of-life products and manufacturing scrap—has drawn intense interest as a resource strategy that can be stood up far faster than developing new mines.
On September 3, 2026, US Strategic Metals (USSM), a US critical minerals developer, and Ionic Rare Earths USA, the American subsidiary of Australian Securities Exchange-listed Ionic Rare Earths (ASX: IXR), announced they had signed a non-binding term sheet to establish a joint venture aimed at building rare earth permanent magnet recycling capacity near Fredericktown, Missouri. The announcement touted what it called "the first magnet recycling plant in the United States" and outlined a plan to invest $100 million in the initial facility. However, a close reading of the primary source materials reveals that this arrangement is, at this stage, a non-binding framework agreement, with several significant preconditions still standing between the plan and an actual construction commitment.
A non-binding agreement and a discrepancy in land size
The documents released on September 3, 2026 confirm that the two companies have begun working out the terms of a formal joint venture agreement—not that construction or equipment orders have been finalized. Disclosure filed by Ionic Rare Earths with the Australian Securities Exchange (ASX) explicitly states that the term sheet is a non-binding agreement. Both companies have included caveats noting there is no certainty that the terms set out in the term sheet will ultimately take effect.
Under the proposed framework, the two companies would form a 50-50 joint venture and develop one or more magnet recycling facilities within USSM's permitted processing site in Fredericktown, Missouri. Notably, the two companies' public statements disagree on the size of that site: USSM's press release cites 1,750 acres, while Ionic Rare Earths' ASX disclosure states 1,800 acres (roughly 728.4 hectares). This discrepancy may stem from differing interpretations of parcel boundaries or the scope of land to be acquired, but neither company's disclosures reconcile the figures into a single, unified number.
データを表で見る
| Reported acreage (acres) | |
|---|---|
| USSM announcement | 1,750 |
| Ionic RE ASX disclosure | 1,800 |
This announcement is positioned as an advancement of a memorandum of understanding (MOU) the two companies signed on November 10, 2025, at the Australian Embassy in Washington, D.C. Whereas that earlier MOU represented an initial-stage statement of intent to collaborate, the current term sheet includes the outlines of an equity structure and governance framework. Stacy W. Hastie, co-founder and CEO of USSM, said, "The United States cannot afford to fall behind in the race to build industries that are key to our national security and economic future," signaling his eagerness to move the joint venture forward quickly. Such statements from executives, however, are standard rhetoric expressing enthusiasm for a project—they do not guarantee that legal or financial obligations will actually be fulfilled.
The initial $100 million funding structure and a five-member board
The business plan outlined in the term sheet envisions a total of $100 million in funding for construction of the initial recycling facility. Within that $100 million, the proposed capital structure is asymmetric: USSM is slated to contribute $95 million toward construction costs, while the remaining $5 million would be split evenly between Ionic USA and USSM, with each contributing $2.5 million in equity.
However, all of these funding figures remain only an intended framework at this point. The $5 million is planned as an initial equity contribution to complete Front-End Engineering Design (FEED) and accelerate a pilot-scale recycling process either at the Missouri site or at another location agreed upon by the joint venture—but as with the $95 million construction budget, actual disbursement of funds depends on satisfying preconditions such as execution of definitive agreements and each party securing its own capital. None of this funding is currently committed. Should additional capital expenditure or working capital be needed beyond the initial facility, the plan calls for the joint venture itself to raise those funds externally or from its own resources.
Regarding governance, the plan calls for a five-member board of directors to oversee day-to-day operations, with USSM appointing three directors and Ionic USA appointing the remaining two. While USSM would hold a majority on the management side, Ionic USA is expected to retain substantive control over technical matters.
According to the outline of the joint venture agreement, Ionic USA would chair the Technical Operations Committee and take the lead on technical, operational, and commercial matters, as well as on procurement of scrap magnets as feedstock. The plan also calls for Ionic Technologies—a subsidiary of Ionic Rare Earths that operates a demonstration facility in Belfast, Northern Ireland—to grant the joint venture a non-exclusive license to its proprietary technology covering rare earth permanent magnets, magnet scrap, and heavy rare earth compounds. This reflects an international division of labor: a US resource company with land and permits in hand supplies capital and site access, while an Australian-linked company that has spent years validating its technology in the UK brings the technical license and operational know-how.
Performance data from the Belfast pilot plant and verification of the extraction technology
The Missouri facility plan is built around a hydrometallurgical magnet recycling process developed by Ionic Technologies. While conventional magnet recycling approaches include pyrometallurgical methods, which melt materials in high-temperature furnaces, and hydrogen decrepitation, which regenerates material while preserving magnetic properties, Ionic Technologies' method combines acid leaching with multi-stage solvent extraction to separate and purify materials down to the elemental level.
According to the company, the process begins with shredding and grinding waste magnets and manufacturing scrap. The material is then dissolved in an acidic solution, chemically separating and removing base metals and impurities such as iron, manganese, aluminum, nickel, copper, and boron. The remaining rare earth elements—neodymium, praseodymium, dysprosium, terbium, and others—are then separated element by element through a 15-stage solvent extraction process, ultimately precipitating as high-purity individual oxides. Ionic Technologies claims this process achieves near-complete extraction of rare earth oxides even from low-grade spent magnets, heavily oxidized scrap, or material with surface coatings and protective films, yielding products with purity exceeding 99.5%.
It is worth noting, however, that these performance metrics—"near-complete extraction" and "purity exceeding 99.5%"—are figures cited in the company's own press releases and technical materials. The announcement materials reviewed here do not present independent, third-party verification of these claims.
データを表で見る
| Initial production volume (kg) | |
|---|---|
| Neodymium oxide (Nd2O3) | 4.2 |
| Dysprosium oxide (Dy2O3) | 0.6 |
The operational track record Ionic Technologies points to as evidence of pilot-scale success comes from its demonstration facility in Belfast, Northern Ireland. This Belfast plant has capacity to process 30 tonnes of waste magnets and swarf annually, and the company reports that since full-scale operations began in June 2023, it has produced a cumulative total of over 10 tonnes of separated, refined rare earth oxides (REO). Looking specifically at the initial production figures announced on June 19, 2023, the plant recovered 4.2 kilograms of 99.7%-pure neodymium oxide () and 0.6 kilograms of 99.8%-pure dysprosium oxide (). These are trial-run figures measured in kilograms—a scale vastly different from the tens of thousands of tonnes that commercial production plants routinely handle—and significant engineering hurdles remain in scaling up from a demonstration plant to an industrial-scale facility in the United States.
| Evaluation Item | Belfast Demonstration Plant (Ionic Technologies) | Proposed Missouri Joint Venture Facility (USSM / Ionic USA) |
|---|---|---|
| Development/operational status | Operating pilot demonstration site since June 2023 | Concept stage based on non-binding agreement (construction not yet started) |
| Annual processing capacity | Waste magnets and swarf: 30 tonnes/year | No specific nameplate capacity disclosed in official announcement materials |
| Production track record to date | Over 10 tonnes cumulative separated rare earth oxides (initial refining measured in kg) | None (pre-construction) |
| Estimated investment scale | Pilot-scale equipment (utilizing grants including from UK government) | $100 million in planned funding for initial facility |
| Purpose and positioning | Engineering validation of 15-stage solvent extraction process and sample shipments | Establishing a commercial-scale recycling hub on US soil |
Integrating magnet recycling into a multi-metal refining hub, and target elements
The recycling facility proposed for Fredericktown, Missouri is not conceived as a standalone plant built from scratch on undeveloped land. Instead, the plan calls for integrating magnet processing capability into the existing critical minerals complex USSM already operates at the site.
USSM currently maintains multi-faceted recovery capabilities at its Fredericktown site for cobalt, antimony sulfide, nickel metal, lithium carbonate, copper cathode, and rare earth elements. By leveraging existing infrastructure that extracts multiple critical metals from historical mine tailings and byproducts—and sharing wastewater treatment systems, reagent supply chains, and power infrastructure with the new magnet recycling operation—the plan aims to hold down both initial construction costs and ongoing operating expenses.
The initial facility is expected to process end-of-life products and manufacturing scrap from neodymium-iron-boron (NdFeB) magnets and samarium-cobalt (SmCo) magnets. The joint venture also plans to evaluate opportunities to recover medium and heavy rare earth elements from feedstocks other than magnets. Even the list of heavy rare earths mentioned as recovery targets differs between the two companies' disclosures: USSM's press release lists seven elements—europium (Eu), gadolinium (Gd), holmium (Ho), erbium (Er), thulium (Tm), lutetium (Lu), and yttrium (Y)—while Ionic Rare Earths' disclosure lists eight, adding ytterbium (Yb).
The November 2025 MOU had outlined a vision for the Missouri facility centered on neodymium and praseodymium (light rare earths), while also recovering heavy rare earths including dysprosium, terbium, samarium, gadolinium, and holmium. Dysprosium and terbium in particular are critical additives that give neodymium magnets the heat resistance needed to retain their magnetic strength at high temperatures—and both are elements China has designated for tightened export controls.
Tim Harrison, Managing Director of Ionic Rare Earths, said at the time of the November 2025 partnership announcement that "magnet recycling is the fastest and lowest-cost pathway to building a China-free rare earths supply chain in the United States." This statement reflects one perspective when compared to the reality that mining rare earths from ore requires more than a decade and enormous capital investment for mine development, environmental permitting, and management of tailings containing radioactive materials such as thorium and uranium. Whether securing a stable supply of recycling feedstock and achieving profitability will truly prove as easy as claimed remains to be rigorously tested by market prices and scrap availability once the plant is operational.
Hurdles to commercialization and remaining unresolved conditions
Coverage of the US critical minerals supply chain tends to gravitate toward headlines like "first US magnet recycling plant set for construction" or "a ring closing around China." But the agreement reached here is nothing more than a term sheet aiming toward a definitive contract by the end of 2026—it would be a departure from the facts to characterize this as a plant under construction or funding as already disbursed.
Several conditions must still be met before the joint venture becomes a reality. First, the parties must finalize their ongoing negotiations and execute legally binding definitive agreements by the end of 2026. Second, each party must actually raise and pay in the agreed capital contributions—USSM's $95 million and the combined $5 million split evenly between the two companies. Beyond that, there is no guarantee that the various commercial contracts, additional permitting renewals, and engineering design approvals will proceed smoothly.
Above all, the September 3, 2026 announcement materials contain no disclosed groundbreaking date for the new Missouri plant, no specific timeline for the start of production, and no nameplate capacity figure indicating how many tonnes of waste magnets the completed facility would be able to process annually. Exactly what scale of initial operation the company—which currently runs a 30-tonne-per-year demonstration plant in Belfast—intends to launch in North America, and the detailed technical design behind it, will not be known until the Front-End Engineering Design (FEED) work is complete.
Numerous unknown variables remain as the project attempts to move from demonstration scale to industrial scale: establishing automated, low-cost, safe dismantling processes to extract magnets from scrapped EV motors; ensuring the solvent extraction process is flexible enough to handle magnet scrap of varying composition sourced from around the world; and maintaining economic viability against price pressure from newly smelted Chinese rare earths. Whether the Missouri project becomes a genuine cornerstone of supply chain restructuring, or stalls at the conceptual stage, will depend on the outcome of the definitive agreement process by the end of 2026 and the steady execution of actual capital investment that follows.