How the Pentagon Is Working to Wriggle Out of China’s Rare-Earths Grip

Why It Matters

Securing a reliable supply of rare earths safeguards U.S. defense production and reduces strategic risk from geopolitical competition. Diversifying the mineral supply chain strengthens national security and industrial competitiveness.

Key Takeaways

• China supplies ~70% rare earths, processes 90%
• Pentagon earmarks $1B+ for domestic refining projects
• US‑Australia framework targets joint mining and processing
• Almonty’s Korean plant aims 40% non‑China tungsten supply
• Congress allocates $5B industrial base fund for mineral deals

Pulse Analysis

Rare‑earth elements are the hidden backbone of modern defense systems, from jet engines to missile guidance. Their unique magnetic and conductive properties make them irreplaceable, yet the United States has ceded production and processing dominance to China, which now controls roughly 70% of global output and 90% of downstream refining. This dependence creates a strategic choke point; any disruption could cripple weapon‑system manufacturing and erode technological edge. The Pentagon’s recent briefing highlighted the urgency of closing this gap, framing mineral security as a core component of national defense strategy.

In response, the U.S. government is mobilizing unprecedented financial resources. The Department of Defense has committed more than $1 billion to domestic refining projects, supplemented by billions earmarked for strategic stockpiles and a $5 billion allocation from Congress’s industrial‑base fund for mineral acquisitions. A landmark U.S.–Australia framework further institutionalizes joint mining and processing efforts, leveraging Australian deposits and American expertise to create a resilient supply chain. These initiatives signal a shift from ad‑hoc procurement to a coordinated, long‑term industrial policy aimed at rebuilding critical‑minerals capability.

Allied partners are also stepping up. Canadian‑based Almonty Industries is commissioning a new tungsten‑processing plant in South Korea, targeting roughly 40% of global demand outside China and challenging the latter’s near‑monopoly. Similar projects are emerging across the Indo‑Pacific, reflecting a broader geopolitical push to diversify sources. While scaling up domestic capacity will take years and face environmental hurdles, the combined public‑private momentum suggests a decisive move toward supply‑chain independence, reshaping the rare‑earth market for defense and commercial sectors alike.