Pentagon to Ban Chinese Rare Earths
The Pentagon will prohibit the use of rare earth magnet materials from China in U.S. military platforms starting in 2027. The mandate will force a major supply chain realignment for the American defense industrial base and could have downstream effects on commercial tech manufacturing.
The new rule, codified in the Defense Federal Acquisition Regulation Supplement (DFARS), will prohibit contractors from using samarium-cobalt and neodymium-iron-boron magnets if any stage of production—from mining and refining to melting and fabrication—occurs in China, Russia, Iran, or North Korea. This closes a previous loophole that allowed materials mined in China to be used if they were melted into magnets in a third-party country. China currently accounts for approximately 70% of global rare-earth mining and over 90% of the refining and magnet production. This dominance poses a significant vulnerability; rare earth magnets are critical components in advanced U.S. military hardware. An F-35 fighter jet, for example, contains about 418 kilograms (920 pounds) of rare earth materials essential for its targeting systems, radar, and flight controls. The Department of Defense is actively investing hundreds of millions of dollars to re-establish a domestic supply chain. Key companies like MP Materials, which operates the only active U.S. rare earth mine at Mountain Pass, California, and Australian producer Lynas Rare Earths have received government contracts to build domestic processing and separation facilities. The Pentagon has gone as far as to take a major equity stake in MP Materials and guarantee a floor price for its output to ensure commercial viability against state-subsidized Chinese competitors. Beyond mining, the push includes developing advanced refining and magnet manufacturing capabilities in states like Texas, Oklahoma, and Nebraska with companies such as USA Rare Earth and NioCorp Developments. The goal is to create a fully domestic "mine-to-magnet" supply chain, eliminating reliance on adversarial nations for components vital to everything from Tomahawk cruise missiles to naval destroyers. This industrial base shift is also leveraging advanced technology to gain an edge. Artificial intelligence and machine learning are being implemented to accelerate mineral exploration, optimize complex refining processes, and manage supply chain logistics with greater precision. For hardware manufacturing, AI-driven quality control can detect minuscule defects in components, a critical capability when producing high-tolerance aerospace and defense electronics.
