US and China Compete Over Rare Earth Magnets
The geopolitical rivalry between the U.S. and China is increasingly focused on the supply of rare earth magnets, a critical resource for military and technological hardware. An analysis from OilPrice.com argues that control over these materials will determine whether the United States can build military equipment at scale, framing it as a central battlefield for global supremacy.
China currently manufactures between 85% and 90% of the world's most powerful rare earth magnets, known as neodymium-iron-boron (NdFeB) magnets. The country's output of rare earth permanent magnets reached approximately 240,000 tons in 2023, and its production capacity continues to expand. These components are indispensable to modern weaponry. A single F-35 fighter jet, for example, requires about 920 pounds of rare earth materials for its targeting radars, electronic warfare systems, and the electric motors that move its control surfaces. The two primary types of rare earth magnets used in defense are NdFeB and samarium-cobalt (SmCo). SmCo magnets are valued for their stability at high temperatures, making them essential for the engines and power systems of aircraft like the F-35, while both types are crucial for the guidance and control systems in Tomahawk cruise missiles, Javelin anti-tank missiles, and precision-guided "smart bombs." This dependency has created significant vulnerabilities; the U.S. currently produces almost no commercial-scale NdFeB magnets. In September 2022, the Pentagon temporarily halted deliveries of the F-35 after discovering an alloy in a magnet within the engine was sourced from China. In response, the U.S. government is funding a push to re-establish a domestic supply chain. Through the CHIPS Act, USA Rare Earth has a non-binding agreement for over $1.5 billion in federal loans and funding to develop a mine in Texas and a magnet manufacturing facility in Oklahoma. Other companies, including MP Materials and ReElement Technologies, are also receiving government support to build out domestic processing and recycling capabilities. The Department of War is backing these efforts with the stated goal of creating a secure domestic "mine-to-magnet" supply chain by 2027.
