Rare Earth Magnets a US-China Battlefield
The geopolitical competition between the U.S. and China is increasingly focused on the critical resource of rare earth magnets, according to a market commentary published by OilPrice.com. The analysis suggests control over these materials will determine America's ability to build military equipment at scale.
China dominates the global rare earth market, accounting for over 69% of mining and nearly 90% of the processing of these essential elements. This gives Beijing significant leverage, as rare earth magnets are critical components in a vast array of technologies. The U.S. is heavily reliant on these imports, with 71% of its rare earth supply coming from China between 2021 and 2025. These are not just obscure industrial materials; they are vital to U.S. national security. Neodymium (NdFeB) and samarium-cobalt (SmCo) magnets are indispensable in advanced military hardware. They are crucial for guidance systems in Tomahawk cruise missiles, the electronic systems of F-35 fighter jets, and the propulsion motors of Virginia-class submarines. Recognizing this vulnerability, Beijing has used its market power as a geopolitical tool. In 2025, China implemented export controls on certain rare earth elements and technologies, citing national security. These rules were designed to restrict the use of Chinese rare earths for military purposes and even apply to foreign companies using Chinese materials or technology. In response, the U.S. government is actively trying to rebuild a domestic supply chain from mine-to-magnet. The Department of Defense has invested over $439 million in domestic rare earth projects since 2020. This includes significant financial backing for companies like MP Materials, which operates the only active rare earth mine in the U.S., and USA Rare Earth, which received a $1.6 billion commitment from the Commerce Department to develop a fully integrated supply chain.
