Ionic Rare Earths (ASX:IXR) has launched a strategic review of its Makuutu rare earths project in Uganda, responding to growing Western demand for new and independent sources of medium and heavy rare earths supply.

The decision follows significant engagement with US and other Western-aligned interests, and comes as Western nations seek to reduce reliance on Chinese supply chains for critical minerals. Rare earths are essential inputs in high-strength permanent magnets used in electric vehicles, wind turbines, robotics, and defense systems, with heavy rare earths such as dysprosium and terbium particularly concentrated in Chinese-controlled supply chains.

Makuutu is a member of the Forum on Resource Geostrategic Engagement (FORGE), formerly known as the MSP. The strategic review aims to evaluate opportunities to enhance value creation and accelerate the project's development as part of Ionic's broader strategy to establish an integrated, sustainable rare earth supply chain spanning mining, refining, and recycling operations.

Global attention on Makuutu has intensified following China's October 2025 decision to further restrict rare earth access. The new regulations require both foreign and domestic companies to obtain special licences for exporting "dual-use items" with both civilian and military applications.

The review will assess a range of potential strategic, structural, and funding alternatives for Makuutu, including the introduction of strategic or government-backed partners, new investment structures, and potential listings in alternative jurisdictions.

Managing Director Tim Harrison said the company's strategic focus remains on developing a secure, traceable, and geopolitically independent supply chain for both light and heavy rare earths to serve Western markets. He emphasized the synergies between Makuutu and Ionic's magnet recycling operations in Belfast, UK, its Viridion refining and recycling joint venture in Brazil, and its US partnerships with Advanced Magnet Lab, Nth Cycle, and US Strategic Metals (USSM).

"The Makuutu heavy rare earths project is an increasingly strategic shovel-ready magnet and heavy rare earth rich resource that can provide molecules to deliver a long-term, sustainable supply of magnet and heavy rare earths to Western markets," Harrison said.

"Since being added to the MSP, now renamed FORGE, there has been growing interest in Makuutu as currently one of the most advanced ionic adsorption clay (IAC) projects globally with product not committed to China."

Harrison noted that the project's strategic importance has increased further following China's restrictions on magnet and heavy rare earth exports, given that Makuutu's product basket consists of 45% heavy rare earths.

"With the timeline now rapidly advancing towards enforcement of additional export restrictions on heavy rare earths from November 2026, we expect interest to continue to increase," he said.

"As our recycling and refining operations advance and become the core focus of the business, and following discussions with various potential project partners, including in the United States, it is appropriate that we assess the optimal structure to maximise Makuutu's value for IonicRE shareholders and position the asset within a broader global rare earths ecosystem."

IXR shares closed down 1.61% at 30.5 cents, with a market capitalisation of $70.06 million.