Rare earth magnets are new US-China 'battlefield'
The geopolitical rivalry between the United States and China is increasingly focused on the supply of rare earth magnets, according to a market commentary. These components are described as critical for determining whether the U.S. can build military equipment at scale. Control over the rare earth magnet supply chain is presented as a central element of geopolitical supremacy.
China dominates the global rare earth magnet supply chain, accounting for approximately 70% of rare earth mining and 90% of magnet production. This control extends from mining and refining to the manufacturing of the finished high-performance magnets essential for advanced technologies. These powerful magnets, primarily made from neodymium and samarium-cobalt, are indispensable in modern military hardware. They are critical components in guidance systems for missiles and smart bombs, motors and actuators in aircraft like the F-35 fighter jet, and in radar and sonar systems. A single F-35 contains approximately 50 pounds of samarium-cobalt magnets. Beyond defense, rare earth magnets are vital for the green energy transition, being essential for the motors in electric vehicles and the generators in wind turbines. Elements like neodymium, dysprosium, and terbium create powerful and heat-resistant magnets that improve efficiency and performance in these clean technologies. In response to this dependency, Beijing has implemented export controls on rare earth materials and technologies, citing national security. These measures require licenses for export, mandate the disclosure of end-users, and have been described as a way to weaponize China's dominance in the sector. The U.S. is actively trying to rebuild its domestic rare earth supply chain, a capability it largely lost decades ago. Efforts include providing federal funding through the Defense Production Act to support domestic mining and processing facilities, such as the Mountain Pass mine in California and new magnet manufacturing plants in Texas. Companies like MP Materials and REalloys are central to America's strategy to create a "mine-to-magnet" supply chain independent of China. These initiatives are complemented by partnerships with allied nations like Australia to diversify sources of rare earth elements. However, analysts estimate it could take the U.S. 10 to 20 years to develop a secure and independent supply chain.
