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Take a look at the U.S. military arsenal, and you\u2019ll find that much of the United States\u2019 firepower depends on rare earths\u2014powerful materials whose supply chains are largely controlled by China.\u00a0<\/p>\n
Every Lockheed Martin F-35 fighter jet, for example, is engineered with more than 920 pounds<\/a> of rare earths. More than 5,700 pounds of rare earths underpin hulking Arleigh Burke-class guided missile destroyers, according<\/a> to the consultancy Benchmark Mineral Intelligence, and each Virginia-class submarine requires more than 10,000 pounds of the coveted metals.\u00a0<\/p>\n<\/p><\/div>\n Take a look at the U.S. military arsenal, and you\u2019ll find that much of the United States\u2019 firepower depends on rare earths\u2014powerful materials whose supply chains are largely controlled by China.\u00a0<\/span><\/p>\n Every Lockheed Martin F-35 fighter jet, for example, is engineered with more than <\/span>920 pounds<\/span><\/a> of rare earths. More than 5,700 pounds of rare earths underpin hulking Arleigh Burke-class guided missile destroyers, <\/span>according<\/span><\/a> to the consultancy Benchmark Mineral Intelligence, and each Virginia-class submarine requires more than 10,000 pounds of the coveted metals.\u00a0<\/span><\/p>\n \u201cThey\u2019re in every form of defense technology,\u201d said Gracelin Baskaran, the director of the critical minerals security program at the Center for Strategic and International Studies (CSIS), a Washington-based think tank. \u201cThey\u2019re in warships, fighter jets, missiles, lasers, tanks, satellites, drones\u2014in everything.\u201d<\/span><\/p>\n The problem is that today, China overwhelmingly dominates global supply chains for rare earths, commanding about 85 percent<\/a> of processing and more than 90 percent<\/a> of magnet production. Beijing particularly dominates the separation of what are known as heavy rare earths, and it has wielded that leverage against the White House on top of earlier <\/span>export bans<\/span><\/a> of technologies for rare earth extraction, separation, and magnet production.\u00a0<\/span><\/p>\n Ever since U.S. President Donald Trump launched his trade war in April, officials from both countries have spent months negotiating Beijing\u2019s <\/span>exports<\/span><\/a> of the powerful materials. But Beijing still maintains <\/span>significant leverage<\/span><\/a>. With trade negotiations underway, China is choking the flow of critical minerals, including rare earths, to Western defense companies, sparking delays and driving up prices, the <\/span>Wall Street Journal<\/span><\/i> reported<\/span><\/a>.<\/span><\/p>\n \u201cWe\u2019re effectively having to ask China\u2019s permission to build our weaponry because they control the permanent magnet supply chain,\u201d said Ashley Zumwalt-Forbes, a former U.S. Energy Department deputy director for batteries and critical minerals under the Biden administration.\u00a0<\/span><\/p>\n \u201cThat\u2019s a very dangerous position,\u201d she added.\u00a0<\/span><\/p>\n Despite their name<\/span>, rare earths are not actually that uncommon. The grouping of 17 elements, which bear obscure names such as neodymium and lanthanum, can be found all over the world, although locating them in commercially appreciable quantities is more challenging.\u00a0<\/span><\/p>\n The United States was once one of the world\u2019s biggest rare-earth producers. But as environmental concerns and financial challenges began to plague the U.S. mining industry decades ago, U.S. lawmakers saw the sector as one that should be <\/span>outsourced internationally<\/span><\/a>\u2014even going so far as to close the U.S. Bureau of Mines, a key research agency, in 1996. Today, the United States is home to just one operational rare-earth mine: MP Materials\u2019 <\/span>Mountain Pass<\/span><\/a> mining and processing facility in California.\u00a0<\/span><\/p>\n At the same time that Washington pulled away, China <\/span>leaned in<\/span><\/a>, pouring immense resources and investments into its rare-earth sector over the course of decades. Now, the big challenge for U.S. lawmakers, and much of the world, is that China\u2019s command over global rare-earth supply chains\u2014and its resulting sway over prices\u2014has made it difficult for anyone else to break into the industry.\u00a0<\/span><\/p>\n In April, China retaliated against Trump\u2019s trade war by imposing export controls on seven kinds of rare earths and magnets. U.S. and Chinese negotiators agreed afterward to a 90-day truce that is set to expire on Tuesday. Ahead of that deadline, top U.S. officials stressed the importance of ensuring continued access to the powerful elements.<\/span><\/p>\n \u201cWe\u2019re focused on making sure that magnets from China to the United States and the adjacent supply chain can flow as freely as it did before the control,\u201d U.S. Trade Representative Jamieson Greer said in an <\/span>interview<\/span><\/a> with <\/span>Bloomberg<\/span><\/i> last Friday, referring to Beijing\u2019s recent trade restrictions. \u201cAnd I would say we\u2019re about halfway there,\u201d he added.<\/span><\/p>\n <\/p>\n The U.S. Defense Department and Western defense contractors have long been aware of their rare-earth pressure points, and the White House has spent the past few years scrambling to tackle the challenge. During the first Trump administration, the U.S. leader aimed to strengthen critical mineral security by issuing an <\/span>executive order<\/span><\/a> to investigate the threat posed by the country\u2019s critical mineral reliance on foreign adversaries and identify policy responses. Trump also increased funding for <\/span>domestic rare-earth firms<\/span><\/a>.\u00a0<\/span><\/p>\n His successor, President Joe Biden, focused on expanding the country\u2019s rare-earth stockpile and used the Inflation Reduction Act to encourage new <\/span>domestic mineral supply chains<\/span><\/a>, namely by tying hefty tax incentives to materials sourced from the United States or free trade partners. <\/span>Both<\/span><\/a> Trump and Biden have also invoked the Defense Production Act, a <\/span>Cold War-era law<\/span><\/a>, to <\/span>expedite<\/span><\/a> domestic production of critical minerals for national security reasons by prioritizing such efforts and <\/span>mobilizing new funding<\/span><\/a>.\u00a0<\/span><\/p>\n But after decades of neglecting its own industry, the United States remains deeply vulnerable to Beijing\u2019s grip. <\/span><\/p>\n \u201cMore than 95 per cent of rare earth materials or metals come from, or are processed in, China. There is no alternative,\u201d Raytheon chief Greg Hayes <\/span>declared<\/span><\/a> to the Financial Times<\/em> in 2023. \u201cIf we had to pull out of China, it would take us many many years to re-establish that capability either domestically or in other friendly countries.\u201d<\/span><\/p>\n The Pentagon is betting<\/span> that it can help turn a new page. In recent years, the Defense Department has poured almost $540 million into critical minerals projects, Reuters <\/span>reported<\/span><\/a>. But the Pentagon is now going even further, namely by recently inking a multibillion-dollar deal that would make it the biggest shareholder in <\/span>MP Materials<\/span><\/a>, the aforementioned firm that operates the country\u2019s only operational rare-earth mine.\u00a0<\/span><\/p>\n With the Pentagon\u2019s support, MP will build a rare-earth magnet factory, which it expects to launch in 2028. The U.S. government will purchase the factory\u2019s output and establish a price floor to shield the company from financial pressures.\u00a0<\/span><\/p>\n The deal represents one of the clearest examples of state intervention in the critical minerals sector and is a triumph for MP Materials, which has for years sought to carve out a bigger stake in the global market and will now be backed by an unprecedented degree of federal support.\u00a0<\/span><\/p>\n \u201cWe are up against China, which has a very interventionist minerals policy in production and processing, in offtake for downstream industry,\u201d said Baskaran of CSIS. \u201cFor the United States to be competitive with China, [it] is going to require a more interventionist model. And this is a big step toward countering China.\u201d\u00a0<\/span><\/p>\n By 2027, the Pentagon will also require its defense contractors to only purchase rare-earth magnets that do not contain <\/span>China-sourced minerals<\/span><\/a>, according to the <\/span>Wall Street Journal.\u00a0<\/span><\/i><\/p>\n Yet even with the Defense Department\u2019s efforts, big challenges remain, and any efforts to forge a new mine-to-magnet supply chain will take time.<\/span> Engineering new supply chains isn\u2019t just a question of finding a new mine; it requires an entire ecosystem of separating and production capabilities, all of which China has a decades-long advantage in.\u00a0<\/span><\/p>\n \u201cThe disparity in the intellectual firepower in China versus the United States with respect to these metals is pretty severe,\u201d said Chris Berry, the president of House Mountain Partners, an independent metals analysis consultancy.<\/span><\/p>\n And at the same time that Washington\u2019s efforts are picking up speed, Beijing, too, is only moving full speed ahead. China is continuing to make inroads in <\/span>Myanmar<\/span><\/a>, which is rich in rare-earth mining, and the Chinese government is reportedly starting to create a <\/span>formal catalog<\/span><\/a> of its own rare-earth specialists to ensure their technical expertise is not shared abroad.\u00a0<\/span><\/p>\n Last year, China saw its highest number of <\/span>overseas mining acquisitions<\/span><\/a> in more than a decade, according to the <\/span>Financial Times.\u00a0<\/span><\/i><\/p>\n