US And Saudi Forge Rare Earth Alliance, But Are We Trading One Dependency For Another?

Saudi Arabian Mining Company (Ma'aden) has signed a memorandum of understanding with MP Materials MP to develop an integrated rare earth supply chain in Saudi Arabia. The agreement, signed on the sidelines of the U.S.-Saudi Investment Forum 2025 in Riyadh, reflects both governments' appetites for securing critical mineral supply chains.

Under the agreement, Ma'aden and MP Materials will explore cooperation across the rare earth value chain—from mining and separation to refining and magnet production. Rare earth magnets are essential components in electric vehicles, wind turbines, aerospace systems, and robotics industries, projected to grow exponentially over the next decade.

Ma'aden, which operates 17 mines and exports minerals to 55 countries in 2024, continues to scale its mining sector as part of Saudi Arabia's Vision 2030 economic strategy.

"We aim to create a global hub for a fully integrated rare earth value chain supporting advanced manufacturing in the Kingdom," said Ma'aden CEO Bob Wilt. "This is an integral step in the exploration and development of minerals that will drive economic and industrial growth for the Kingdom."

MP Materials, which operates the only commercial-scale rare earth mine and processing facility in the U.S., brings the technical expertise and industrial scale needed to help establish Saudi Arabia as a major player in this field.

"Today's announcement is an important first step towards rebalancing the global supply chain in a moment of transformational growth fueled by emerging technologies—especially in robotics and physical AI," said MP Materials CEO James Litinsky.

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The rare earth sector has taken on increasing strategic importance as the U.S. seeks to reduce dependence on China, which accounts for over 60% of production and over 80% of refining capacity. The Biden and Trump administrations have made reshoring and diversifying rare earth supply chains a national security priority.  Although used in relatively small quantities, these minerals are essential for the functionality of many advanced technologies.

In addition to the Ma'aden-MP Materials deal, U.S. and Saudi officials also advanced a $9 billion critical minerals initiative that allows Grand Mines Mining LLC to explore for lithium, cobalt, and rare earths in Saudi Arabia and Africa, with future exports directed to the United States, according to The Washington Post.

However, the broader implications of these deals, especially those involving advanced AI hardware exports, have drawn criticism. Sam Winter-Levy, a Technology and International Affairs Program fellow at the Carnegie Endowment for International Peace, warned about offshoring American AI and critical minerals know-how to the Middle East.

"We essentially spent the last half-century trying to reduce the leverage of these states over the U.S. because of their control of the oil supply. Why would we recreate that dependency?" he said, pointing at Saudi Arabia’s close ties with Russia and China.

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