Buyers Lock the Mine-to-Magnet Chain

A company known for electrification and automation has just tied itself to a rare earth project that still has to clear permitting, financing and separation scale-up. That is an odd thing for a buyer to do, until you look at what the alternative has become.

Schneider Electric and Torngat Metals signed a non-binding memorandum of understanding to explore a strategic industrial partnership, according to Schneider's release. The project is anchored at Strange Lake in Nunavik, with associated infrastructure in Labrador and a planned separation facility in Sept-Îles. The deal is thin on binding terms. It is thick on intent, and the intent is the story. When prices swing too hard to finance a mine the old way, the people who need the metal start building the chain themselves.

The price of not knowing

DLA Piper's survey puts numbers on the freeze. Of the 550 participants interviewed, 23% said projects that looked viable were deferred or cancelled because of unpredictable commodity prices, MINING.COM reported. Another 12% called volatility a dealbreaker.

Among respondents who called volatility a major constraint, 28% struggled to secure bankable long-term offtake agreements, 27% had postponed investment decisions and 26% faced a higher cost of capital. Each of those is a lender saying it cannot see the revenue.

The IEA sees the same thing from altitude. Its Global Critical Minerals Outlook 2026 says critical mineral investment declined by 9%, ending several years of growth, with investors turning cautious despite strong underlying demand. Battery metals saw capital spending fall by more than 20%, which the agency called "the largest decline in over a decade". Lithium companies cut investment by around 40%.

The cuts came as prices moved the other way. Lithium prices climbed sharply on energy storage demand and tight supply, the IEA says, while cobalt rose by around 130% on Congolese export restrictions. Prices rose and capital still retreated, because a price that jumps is as hard to finance against as one that falls.

Buyers move upstream

DLA Piper found that at least 37% of surveyed developers and 32% of mining and raw materials producers have adopted vertical integration, controlling more stages from extraction through refining, manufacturing and recycling. "developers and miners are now actively working to hold the stretch of the chain they depend on most." said DLA Piper partner Oliver Wright.

Schneider's version starts before the first tonne is mined. Vivek Kapoor, the company's Global Lead for Mining, Minerals & Metals, told International Mining that such arrangements are similar in strategic intent to an early-stage offtake relationship. He said they go beyond what peers typically undertake and give both sides an incentive to deliver on project KPIs. On the sidelines of the FT Metals & Mining Summit in London he put it this way: "By engaging at such an early stage and exploring how future industrial demand could support the project, we are invested in its long-term success."

For Torngat, a privately held Canadian company, the pitch is a package. International Mining reports it plans a mine, a seasonal access road and port, and a separation and processing plant capable of producing 15,000 t/y of rare earths. The company aims to help resolve the heavy rare earths supply crisis, particularly dysprosium and terbium. Interim chief Maryse Bélanger framed it as a chance to build "not just a mine" in her words. Schneider's Stéphane Piat, for his part, called the project part of an "anti-fragile" supply chain.

Rare Earth Exchanges, writing on Jun 10, 2026, was blunt about what this is not. The announcement is an MOU, not project financing, a construction decision, an offtake agreement or a final investment commitment. The outlet listed what Strange Lake must still navigate: permitting, engineering, metallurgy, financing, separation scale-up, customer qualification and execution risk. It also read the deal as part of a broader trend of major technology companies seeking direct upstream access to critical minerals.

Why buyers can afford to

The IEA offers one reason this works for the buyer. Rare earths represent around 40% of permanent magnet costs but less than 1% of a vehicle's value, so downstream users may absorb higher material costs more readily than miners can absorb lower prices. The agency adds that demand-side measures can provide predictable demand, improving the bankability of projects and the incentive to invest in them.

The need is real. The IEA says the number of mineral tariff codes subject to Chinese export controls has climbed since 2023. Outside China, it says, refining capacity in geographically diversified regions covers only part of expected mined supply by 2035, and planned magnet production covers less still. Capital costs for refining projects run 20% to over 150% higher outside the dominant supplier.

The price gap shows what that looks like at the counter. Bloomberg News, via MINING.COM, citing Argus Media, reported yttrium at about $1.15 million a ton in Europe versus $9,144 in China, or 125 times more expensive. Dysprosium and terbium are 20 times and eight times costlier than in the domestic Chinese market. David Merriman of Project Blue told Bloomberg: "Within the next year or two, really there is very limited ex-China supply which is going to be available." Bloomberg also reported that Presidents Donald Trump and Xi Jinping are expected to meet at an APEC gathering in Shenzhen, which gives the premium another reason to move.

Markets are paying attention. MP Materials ended at $37.75 on Monday, and the rare earth ETF REMX climbed 4.51%, while the lithium ETF LIT closed at $61.35 on Monday.

The cost of going without

Eramet shows the other side. It said Monday that it is seeking buyers for lithium and nickel stakes, MINING.COM reported. Investors are being sought for a minority stake in Argentina's Centenario-Ratones and a substantial part of its 38.7% interest in Weda Bay Nickel in Indonesia.

The numbers explain the urgency. Benchmark lithium carbonate and nickel prices fell 17% and 10%, respectively, and Eramet's adjusted earnings were cut by 54%. Adjusted free cash flow was negative €481 million, and net debt climbed to €1.94 billion from €1.30 billion a year earlier.

Part of the squeeze is of its own making. Eramet paid $699 million in October 2024 to buy Tsingshan's 49.9% interest in Centenario from cash on hand, and now needs another minority investor in the same business. The French state's investment agency would keep its 27.1% share in a rights issue, and Paris framed the extra support as a way to secure critical metals supplies.

Eramet expanded into price-exposed metals without a buyer committed to take the output. Torngat has a buyer before it has a permit. Neither is safe. One has a partner and the other has a balance sheet to repair.

That is the gap the DLA Piper numbers describe. Producers can no longer count on the spot market to carry a project through, and buyers with something at stake are paying to be at the table early. Whoever signs first gets the supply. Whoever signs last gets the premium.