Ionic Rare Earths and US Strategic Metals have taken a step toward building a domestic rare-earth magnet recycling operation in the United States. In a Thursday update to the Australian Securities Exchange, Ionic Rare Earths said the two companies have signed a non-binding term sheet for a 50-50 joint venture. The venture would process used permanent magnets—such as neodymium-iron-boron and samarium-cobalt—along with manufacturing scrap, at a fully permitted site in Missouri.
The term sheet replaces and “materially advances” a memorandum of understanding the companies signed in November 2025 for an integrated critical-minerals campus. While the agreement is not yet binding, it outlines a clear path forward, including a $100 million funding plan for initial recycling facilities and the licensing of Ionic’s proprietary recycling technology into the venture.
Why rare-earth magnet recycling matters
Rare-earth magnets are essential components in electric vehicles, wind turbines, smartphones, and many defense applications. Currently, China dominates the global supply chain for rare earths, from mining to processing to magnet manufacturing. That concentration has prompted Western governments and companies to seek alternative sources, including recycling.
Recycling used magnets and manufacturing scrap can reduce reliance on newly mined rare earths and lessen the environmental impact of extraction. It also creates a more circular supply chain, which is increasingly attractive to policymakers and manufacturers looking for stable, secure sources of critical materials.
The Missouri site is already fully permitted, which could shorten the timeline to production compared to greenfield projects that require lengthy permitting processes. The venture would initially focus on processing neodymium-iron-boron and samarium-cobalt magnets, with plans to study recycling other rare earths in the future.
What the deal includes
Under the proposed structure, Ionic Rare Earths and US Strategic Metals would each hold a 50% stake in the joint venture. Ionic would license its recycling technology, while US Strategic Metals would contribute the site and likely its operational expertise. The $100 million funding outline is earmarked for the initial recycling facilities, though the companies have not yet detailed how that capital would be split or raised.
The non-binding nature of the term sheet means the deal is still subject to due diligence, final agreements, and regulatory approvals. However, the fact that the companies have moved from a memorandum of understanding to a more detailed term sheet suggests progress is being made.
Ionic Rare Earths is an Australian-listed company focused on rare earth mining and recycling. Its UK subsidiary, Ionic Technologies, has developed a patented recycling process that can recover rare earths from magnets and other waste streams. US Strategic Metals is a US-based company that operates in the critical minerals space, with a focus on recycling and processing.
What it means for investors
For everyday investors, this news is a reminder that the rare earth supply chain is a hot area of interest. Governments and companies are pouring money into projects that can secure supplies of these critical materials, especially as demand for electric vehicles and clean energy technologies grows.
However, it's important to note that this deal is still in its early stages. Non-binding term sheets can fall through, and the $100 million funding is not yet secured. Investors should watch for further announcements, such as a binding agreement, funding commitments, and progress on the Missouri site.
The broader context is also relevant. Other companies are making similar moves. For example, Energy Fuels closed a deal to build a rare earth mine-to-magnet chain, and Lynas is expanding its rare earths supply chain. These developments highlight the growing competition to establish Western rare earth capabilities.
For those invested in rare earth-related stocks, the news could be a positive signal, but it's not a reason to make hasty decisions. The sector is volatile, and individual projects can face delays or cost overruns. As always, diversification and a long-term perspective are key.
Investors should also keep an eye on the broader metals market. Copper and zinc slipped recently as oil and dollar gains pressured metals, and zinc led Shanghai metals as global stockpiles shrank. These trends can affect sentiment across the mining and recycling sector.
In summary, the proposed joint venture between Ionic Rare Earths and US Strategic Metals is a meaningful step toward building a domestic rare earth recycling industry in the US. But it's still early days, and investors should treat it as a developing story rather than a done deal.
