Rare Earth Magnets: The New US-China Battlefield
The U.S.-China rivalry is increasingly focused on rare earth magnets, a critical component for military hardware, EVs, and green energy tech. Analysts warn that control over this supply chain is becoming a key geopolitical lever. The struggle for these materials now underpins both national defense and industrial competitiveness.
China’s dominance of the rare earth supply chain is staggering, controlling roughly 91% of the world's refining and 94% of magnet manufacturing. This grip extends from mining the raw materials to producing the high-strength magnets essential for modern technology. These are not just any components; they are vital to U.S. national security. A single F-35 fighter jet requires over 900 pounds of rare earth materials, a Virginia-class submarine needs 9,200 pounds, and an Arleigh Burke-class destroyer uses 5,200 pounds. They are also critical for Tomahawk missiles, Predator drones, and JDAM smart bombs. In response to China's export restrictions, which began as early as 2023 and have been progressively tightened, the U.S. is launching a multi-billion dollar push to create a domestic "mine-to-magnet" supply chain. The goal is to be capable of supporting all U.S. defense requirements by 2027. The U.S. government is injecting massive capital to build this domestic industry. The Department of Defense has committed over $439 million since 2020, and the Commerce Department is backing USA Rare Earth with a potential $1.6 billion in loans and funding via the CHIPS Act. This is matched by significant private investment. Companies like USA Rare Earth, MP Materials, and Vulcan Elements are at the forefront of this effort. USA Rare Earth is developing a mine in Texas and a magnet factory in Oklahoma, while Vulcan Elements received a $620 million loan from the Pentagon to build a 10,000-metric-ton magnet facility. The push extends to green technology, where these magnets are indispensable. A typical electric vehicle motor uses between 1-2 kg of rare earth magnets. A single 3-megawatt direct-drive wind turbine can contain between 200 and 600 kilograms of these magnets.
