Minerals, Magnets, and Military Capability: China’s Rare Earth Weaponization Should Be a Wake-Up Call
Macdonald Amoah,
Morgan Bazilian and
Jahara Matisek | 07.10.25
When China
imposed export controls on seven of the seventeen rare earth elements in April 2025, it wasn’t just a trade policy tweak—it was a shot across the bow of the US defense industrial base. American fighter jets, satellites, guided missiles, and submarines all rely on high-performance
magnets built with rare earths like neodymium, samarium, and dysprosium. This blocking action by China followed earlier prohibitions on
gallium and germanium, which are foundational to infrared optics and radar systems. These materials are overwhelmingly Chinese controlled, processed, and manufactured—and American reliance on foreign minerals and rare earths exposes critical vulnerabilities.
China
refines over 85 percent of the world’s rare earths and
produces nearly 90 percent of high-performance rare earth magnets. That means US weapon systems, from F-35s and Virginia-class submarines to hypersonic weapon systems and precision-guided munitions, are all critically dependent on materials from strategic rivals. Exotic minerals are no longer just for the
green revolution; this is about the United States and its allies having the raw materials needed to sustain a future war.
What began as a commercial pressure tactic has escalated into a strategic stress test of the US defense industrial base. American defense firms are already
reporting procurement delays, while
companies like General Motors are
scrambling to source non-Chinese magnets to avoid broader industrial paralysis. Just weeks after the April restrictions took effect, multiple defense suppliers—
including subcontractors for radar and propulsion systems—reported slowdowns and sourcing complications, signaling an era of Chinese weaponization of materials. While the civilian economy may appear
resilient to substitution; the defense sector is not.
To counter this critical vulnerability, the United States must act decisively with a three-pronged strategy: (1) revitalize the National Defense Stockpile with ready-to-use materials, (2) accelerate domestic magnet manufacturing through bold market incentives, and (3) forge binding partnerships with trusted allies. Only through such measures can America safeguard its military readiness against China’s strategic chokehold.
The National Defense Stockpile, Restocked
The United States once took strategic material stockpiling seriously. At its Cold War peak, the National Defense Stockpile
held an inflation-adjusted $42 billion in critical reserves. Today, it is
valued under $1 billion and lacks usable quantities of the rare earth materials needed for rapid defense production.
Stockpiling raw ore isn’t enough. The Department of Defense needs finished or near-finished materials—especially neodymium-iron-boron and samarium-cobalt magnets—that can be directly integrated into weapons systems. Holding unrefined oxides does nothing for a defense contractor trying to build an F-35 or a hypersonic glide vehicle.
Congress must authorize an immediate strategic restocking initiative focused not just on bulk commodities but on specific components tied to operational readiness. This means finished magnets, sensor-grade alloys, and defense-critical components, all backed by scenario-based planning and annual audits.
A recent
Government Accountability Office report estimated the cost to fix these gaps at $18.5 billion. That amount is a fraction of the Pentagon’s budget but a potential game changer for insulating the military from Chinese leverage.
Magnets Made in America
The Pentagon has taken
initial steps to fund rare earth production, backing companies like
Lynas and
MP Materials through the Defense Production Act. But the pace is glacial. China’s restrictions are already here; the US supply chain won’t be fully stood up
until 2027 at the earliest—if ever.
That timeline is unacceptable. Congress must move faster, and more aggressively, by unleashing market incentives that match the threat’s urgency. The most effective first step? A production tax credit for each kilogram of defense-grade magnet material produced domestically. This
approach revived the US semiconductor and battery industries, and it would boost magnet production. A fully integrated US rare earth supply chain is
achievable with sustained government and private-sector commitment.
Second, federal law must establish fast-track permitting for rare earth mining, refining, and magnet fabrication. Fully funded projects can
languish for years in permitting limbo. Strategic infrastructure deserves strategic exemptions. Without domestic production, strategic competitors like China can more easily weaponize global supply chains against the American economy and defense manufacturing.
Finally, the Department of Defense must initiate
multiyear offtake agreements with domestic magnet producers. These guaranteed contracts would derisk private investment, enabling companies to raise capital and build capacity without betting against Chinese state subsidies. If the United States wants a resilient supply chain, it needs to put real skin in the game—not just more memos and grants.
A transformational multibillion-dollar public-private partnership between the Department of Defense and MP Materials was
announced on July 10 marking the Pentagon’s most significant move to date. This comprehensive agreement includes substantial equity investments, loans, a ten-year price floor commitment, and an exclusive ten-year magnet offtake arrangement, dramatically accelerating America’s push toward rare earth magnet independence. This is precisely the type of action the United States needs.
Strategic Cooperation with Trusted Allies
Allied collaboration is necessary, but not sufficient. Current efforts like the
Minerals Security Partnership are well-intentioned but nonbinding. Most allied agreements are built on goodwill, not enforcement. That must change.
The United States should move toward coproduction requirements for all joint defense programs—especially those involving radars, guidance systems, and propulsion units. These clauses must mandate that essential components be sourced exclusively from trusted, non-Chinese supply chains. And additional funding must be allocated to ensure sourcing domestically and abroad from trusted allies and partners.
In the Indo-Pacific, this means expanding rare earth refining deals with
Australia and
Japan into comprehensive production partnerships with clear timelines, cost-sharing, and integration into US procurement pipelines. Rare earth cooperation should no longer be siloed in energy or industry ministries; it must become a core function of allied defense planning.
The United States should also use frameworks like the
QUAD and the
D-10 to establish enforceable standards for rare earth traceability, magnet quality, and export controls. This would help close loopholes that allow Chinese-origin materials to enter US defense supply chains indirectly—particularly through third-party vendors or poorly screened global suppliers. While China has
begun restricting the transfer of certain rare earths by foreign firms, its intent is to control chokepoints, not to ensure transparency. By contrast, US-led frameworks should aim to reduce strategic dependency by ensuring all critical components are sourced from trusted and verifiable supply chains.
Fortunately, Congress is
already stepping up: the House’s proposed Commercial Reserve Manufacturing Network would mobilize dual-use commercial firms into wartime capacity. Embedding rare earth magnet production into that framework could enable rapid conversion of civilian capacity into military readiness. This would ensure the defense base can surge supply and sustain the US military in the next war.
Anticipating and Answering the Critics
Some might argue that establishing new magnet production facilities in the United States is too expensive, but the cost of strategic dependency is far greater. A single Virginia-class submarine contains
about 9,200 pounds of rare earths and making an F-35 requires
more than 900 pounds of rare earths. A supply chain failure could destabilize procurement, derail billions in defense investments, and undermine joint force readiness.
Other critics might say that American allies can pick up the slack. In theory, this is plausible—but in practice, countries like
Australia still send raw materials to China for processing. Without deep investment in allied refining and fabrication, these relationships remain symbolic rather than strategically functional. And knowing how China has demonstrated a penchant for weaponizing supply chains, there is no doubt Beijing would weaponize mineral and rare earth supply chains in a crisis or conflict. Given that
unclassified war games indicate the US military would run out of many munitions within a week in the event of a Taiwan Strait conflict, a lack of access to minerals and rare earths would make it exponentially more expensive and difficult for
defense firms to produce new weapons and munitions at a sustainable rate.
Still others point to
permitting delays and regulatory hurdles. These excuses are no longer tolerable when a rival is actively attempting to stymie the supply of critical minerals and materials to the United States. If Congress can
pass legislation to fast-track microchip factories, it can do the same for the magnets and other materials that make radars track, fighter jets fly, and missiles strike.
A Test of Strategic Maturity
China’s rare earth export controls are a calculated move in
its strategy of unrestricted warfare, leveraging and weaponizing global supply chains to Beijing’s advantage. This geopolitical warning demands attention: It tests America’s industrial resilience and strategic resolve to address the immediate problem of acquiring minerals needed for weapon systems. Access to rare earth magnets and exotic minerals underpins the American economy, innovation, and modern warfighting. Every F-35, missile battery, satellite constellation, and network-centric kill chain depends on them. Without urgent action, the United States risks losing strategic advantages on the battlefield and in its factories.
The question is whether America will heed this warning and act decisively—restocking stockpiles, rebuilding domestic production, and forging ironclad allied partnerships—or let a factory-floor vulnerability become its next strategic defeat.
Macdonald Amoah is a communications associate at the Payne Institute for Public Policy where he helps out with research on topics bordering on critical minerals, and issues within the general mining space.
Morgan D. Bazilian is the director of the Payne Institute for Public Policy and professor at the Colorado School of Mines. Previously, he was lead energy specialist at the World Bank. He has over two decades of experience in energy security, natural resources, national security, energy poverty, and international affairs. He holds a Ph.D. in energy physics and was a Fulbright Fellow.
Lieutenant Colonel Jahara “Franky” Matisek, PhD, (@JaharaMatisek) is a military professor in the national security affairs department at the US Naval War College and a fellow at the European Resilience Initiative Center, Payne Institute for Public Policy, and Defense Analyses and Research Corporation. He has published two books and over one hundred articles on strategy, warfare, and national security.
The views expressed are those of the authors and do not reflect the official position of the United States Military Academy, Department of the Army, or Department of Defense.
