2025 marked an inflection point. Chinese export restrictions on rare earths triggered production stoppages at various manufacturers across Europe. What had long been – at best – modelled as tail risk became an operational reality. In an era of geoeconomic competition, access to critical materials is no longer a given. When the material is missing, price becomes irrelevant.
The reflex response – new mines, faster – is necessary, but insufficient on its own. Primary supply alone cannot keep pace with the speed, cost, and political complexity of that trajectory, and processing and refining remain a major bottleneck for both primary and secondary value chains. The more complete answer thus lies in a fundamentally more intelligent use of what already exists.
Circularity Is More Than Recycling: Working the Full Stack
Reducing primary supply dependency requires working the entire circular stack: recycling to recover elemental value from end-of-life material, remanufacturing and refurbishment to preserve embedded value at component and product level, reuse to extend product lifecycles outright, and – increasingly – material innovation and design adaptation to reduce or substitute critical material content at source.
The highest-value interventions sit furthest from the shredder. A drivetrain component returned from the field and remanufactured to original specification retains vastly more embedded value than one processed for elemental recovery – the rare earth magnets, copper windings, and precision alloys stay in their highest-value form at a fraction of original production cost. Tier 1 suppliers already operating service infrastructure for industrial motors, automation components, and power electronics are one commercial model away from transforming that into a remanufacturing operation with a captive feedstock stream Ultimately, OEMs and Tier 1s might increasingly retain ownership of material-intensive assets and sell performance rather than products, increasing the premium on material quality, traceability, and specification consistency. For miners and advanced materials producers, this is a commercial opening: those who can guarantee provenance and certify material properties across multiple lifecycles are positioned to move beyond commodity price exposure into longer-tenor, more stable relationships with the manufacturers who depend on their output. As circular asset financing matures – long-duration service contracts backed by material-intensive hardware increasingly resembling infrastructure-grade cash flows – the upstream industry has a genuine opportunity to be architects of that structure rather than price-takers outside it.
Nonetheless, scaling recycling, processing and refining infrastructure remains equally indispensable. Recycling is the necessary floor, and midstream processing and refining capacity is the bottleneck that constrains the entire system – for primary and secondary material flows alike. Building that capacity is a strategic infrastructure challenge of the same order as mine development, and it needs to be treated as such by capital allocators and policymakers. Equally, automated disassembly infrastructure has been chronically underinvested: robotic disassembly, AI-driven sorting, and automated grading have the potential to change the game for higher-grade material liberation and remanufacturing at scale.
The Bankability Gap On Both Sides of the Value Chain
For further scaling resilient supply chains, the World Economic Forum’s recent Making Critical Minerals Bankable highlights constraints such as risk allocation, revenue certainty, and delivery confidence – varying fundamentally by mineral, and partly regarding primary or secondary value chains. Copper’s chokepoints are permitting and infrastructure. Lithium’s are price volatility and absent hedging instruments.
Secondary supply faces the same bankability pathologies, compounded. Price benchmarks for recycled materials are weak or absent. Qualification cycles for recycled content are long and non-standardised. The de-risking frameworks being built for primary extraction need equivalent counterparts on the secondary side.
Rare earths require demand anchors just to justify market entry against an incumbent controlling over 90% of refining capacity. In last year’s report Closing The Loop On Rare Earth Magnets, CIRCULAR REPUBLIC and Porsche Consulting showed how recycling can cover 30 % of Europe’s demand on the midterm and which good practices already work today.
That capital markets are beginning to price this seriously is no longer in doubt. JPMorgan Chase’s Security and Resiliency Initiative – committing up to $1.5 trillion over ten years to industries critical to economic security, with critical minerals explicitly among the priority sectors and up to $10 billion in direct equity and venture capital – is one of the most consequential private sector commitments the materials industry has seen. The underlying logic is clear: the resilience of open market economies depends, in the end, on who controls access to the materials and manufacturing basis that modern societies run on.
Collaboration Is Key
The largest barrier to scaling circularity is not technical, it is organisational. Recovery and remanufacturing require coordination across actors who were never designed to operate as a system. Through CIRCULAR REPUBLIC’s work with major OEMs, Tier 1 suppliers, and industrial companies, the pattern is consistent: circularity scales when treated as a supply chain strategy rather than a compliance exercise. In magnet recycling specifically, Ionic Technologies, HyproMag, and Carrester are each approaching rare earth recovery from distinct process angles and are beginning to operate at volumes relevant to Tier 1 supply chains. The bottleneck has shifted from process chemistry to commercial infrastructure: qualifying recycled material with OEM procurement, establishing reference pricing, and building the reverse logistics connecting field returns to reprocessing capacity.
Also beyond the immediate rare earths space, startups are providing much of the technical breakthrough capacity that established players cannot develop at the same speed. The SPRIND Critical Materials Challenge — a €35M programme backed by Germany’s Federal Agency for Disruptive Innovation, with NSF as a transatlantic partner — is one of the most targeted public efforts in Europe to identify and scale these solutions. Among the ventures emerging from that pipeline, DEScycle exemplifies the disruption potential: their technology selectively dissolves high-value and critical metals from complex secondary feedstocks at room temperature and atmospheric pressure, enabling decentralised metal recovery close to the source. For incumbent smelter operators, that is both a competitive threat and an integration opportunity.
The West’s Answer to State Capitalism
China’s dominance in critical materials is not a geological accident. It is the result of deliberate industrial policy: state-backed financing, integrated value chains built at a loss to capture market share, and the strategic patience to absorb returns that private capital cannot. The result is a concentration of processing and refining capacity weaponized as economic coercion.
The West’s response cannot defer to market forces that have demonstrably failed to price geopolitical risk correctly. What is required is bold trade policy combined with genuine industrial commitment. Governments must steer, support, and incentivize industry – particularly OEMs and Tier 1s that deepened supply chain dependencies for margin efficiency – must treat diversification as a board-level priority and accept its share of the cost. Neither can carry this alone.
Circularity belongs at the centre of that compact. It simultaneously reduces primary supply dependency, builds material stocks in allied economies, and generates commercially viable business models. The ore body is already above ground. The work is in building the mine.
