The US Is Underinvested in Rare Earths — Now We’re in Trouble

After decades of neglect, Washington’s rare earth stockpiles are nearly empty — just as Beijing tightens its grip on critical materials.

Oct 17, 2025

Editor’s Note: This analysis by Stephen Bryen follows Lyric Hughes Hale’s recent article, No Surprise, It’s Elemental, which examined China’s latest export controls and their global impact. Bryen takes a closer look at America’s own vulnerabilities — and why a decade of underinvestment has left the US dangerously dependent on Beijing for critical materials.

MP Materials, Mountain Pass, CA. The roasting circuit, where rare earth concentrate is thermally treated prior to leach. *Photo Credit: Michael Tessler*

Rebuilding US Rare Earth Stockpiles

If you’re looking for rare earths, you won’t find them in America’s strategic stockpiles. That’s because the Pentagon, for the past decade or longer, has refused to fill them with vital materials.

The Pentagon now has a new plan to invest up to $1 billion to stockpile materials including cobalt, antimony, tantalum, rare-earth permanent magnets, battery-grade graphite, and aerospace-grade titanium.

In Defense Department terms, $1 billion is chump change. But even if the amount were adequate, no one can say how much of which materials the Pentagon needs to acquire, or where they’ll get them—assuming they can even decide what’s essential. China currently has the US and its allies in a supply-chain stranglehold on rare earth materials, batteries, and magnets.

China dominates the rare earth market, controlling about 70% of global mining, over 90% of separation and processing, and 90–95% of magnet manufacturing. This gives Beijing enormous leverage over the supply of critical minerals essential for products ranging from electric vehicles to advanced defense systems.1

China threatens to cut off most of its rare earth supplies:

It’s not the first time China has halted exports of strategic materials. Back in 2010, Beijing stopped supplying rare earth materials to Japan following a maritime dispute. The embargo came after Japan arrested the captain of a Chinese trawler involved in a run-in with Japanese coastguards near the disputed Senkaku Islands (claimed by China as the Diaoyus). 2

Decades of US Inaction

The US government has long been aware of its dangerous dependence on China for vital goods and materials. In 2016, the Government Accountability Office (GAO) described the Defense Department’s approach as “fragmented” and ineffective.3

❝ Three Department of Defense offices have identified certain rare earth materials as critical for some defense applications, such as lasers, but DOD has not taken a comprehensive, department-wide approach to identifying which rare earths, if any, are critical to national security. — GAO Report, 2016

The reason for this fragmented approach is not hard to understand. At the time, defense policy was guided by officials overly optimistic about US–China relations, many of whom argued that China did not pose a military threat and would not for at least 20 years. This mindset helped justify curtailing arms sales to Taiwan and other measures based on the illusion that “peace through trade” was sustainable.

In 1997, the DOD determined that 99% of the National Defense Stockpile’s inventory was “excess” to military requirements. That decision reflected post–Cold War assumptions that threats in Europe and Asia had vanished. A long-range plan followed to sell off most of the materials in the stockpile.

The NDS’s estimated market value decreased from $3.4 billion in 1999 to approximately $489.4 million by the end of fiscal year 2010.
The DOD, specifically the Defense Logistics Agency’s (DLA) Defense National Stockpile Center (DNSC), managed the sell-off and the transaction fund.
Over the 11-year period from 2000 to 2010, the DNSC projected needing about $670 million for stockpile operations.

The stockpile’s market value fell from $3.4 billion in 1999 to $489 million by 2010. Instead of reinvesting proceeds from these sales, the vast majority of revenue was transferred to other federal programs. Between 2000 and 2010, about 82% of the Defense National Stockpile’s outlays went to other agencies, including the Treasury and the Department of Health and Human Services.4

A Turnaround

Along with the new $1 billion initiative, the Pentagon is also investing in rare-earth mining and processing. The biggest beneficiary is MP Materials Corp., headquartered in Las Vegas, Nevada. MP Materials owns and operates Mountain Pass, the only active rare-earth mine and processing facility in the United States.5

The Pentagon has purchased $400 million in preferred stock in MP Materials—becoming its largest shareholder—with an option for another $350 million and a $150 million loan to expand heavy rare-earth separation. Apple has also invested $500 million to develop recycled magnet production in the US.6

Despite these moves, MP’s output represents only a fraction of global supply, and most refining still happens in China.

A Look Ahead

The problem is structural. Key US industries: automotive, semiconductors, AI, aerospace, and defense depend on stable rare-earth supplies. Yet much of the manufacturing base remains offshore. Even if the US builds up domestic stockpiles, current law does not allow those materials to be used for foreign production (for example, Taiwan’s TSMC).

While Washington debates industrial policy, China is expanding both control and capacity. Some analysts believe Beijing could attempt to seize or blockade Taiwan by 2027.7 The lack of explicit US commitment to Taiwan makes that outcome increasingly inevitable. Even short of invasion, leveraging Taiwan’s semiconductor industry gives China tremendous power over US technological security.

❝ In Defense Department terms, $1 billion is chump change. But even if the amount were adequate, no one can say how much—or where—the Pentagon will get what it needs.

Today’s Pentagon, unlike its predecessors, understands the gravity of the problem but, aside from Mountain Pass, isn’t really doing much. The lack of explicit US commitment to Taiwan makes that outcome increasingly inevitable.

Recycling: A Hidden Resource

Rare earths don’t disappear when used. They can be recovered from discarded electronics: computers, phones, and other devices. Recycling is far less environmentally damaging than mining and refining from scratch.

Companies such as REEcycle, Electrified Materials Corporation, Cyclic, and Metallium Ltd.. Academic institutions such as Texas A&M University and the West Virginia Water Research Institute are working on new recovery techniques. Yet only 1% of rare earths in e-waste are currently recycled.

Scaling up could ease pressure on the supply chain, reduce environmental damage, and build a domestic supply buffer. The US government should launch a national rare-earth recycling program, utilizing discarded electronics, on par with its battery and semiconductor initiatives.

`Did you know…` `⧉`

Electronics can be recycled to recover valuable rare earth elements—most commonly neodymium, dysprosium, lanthanum, and europium.

These elements are extracted from familiar components such as magnets in hard drives and speakers (neodymium, dysprosium), batteries (lanthanum), and display phosphors (europium).

Some rare earths are much harder to reclaim. Scandium, yttrium, and the heavier lanthanides—especially dysprosium and terbium—require complex separation processes and remain difficult to recover at scale.

Mining Alternatives for Rare Earth Materials

Japan offers a model. Tokyo has invested heavily in overseas rare-earth ventures, including Australia’s Lynas and new seabed mining near Minamitorishima (Marcus Island). I wrote in Asia Times (2019) that these deposits could meet global demand for certain elements for hundreds of years8 Yet the US has no partnership or investment in the project, and Japan’s pilot extraction isn’t expected until 2026–27.

There are a number of other opportunities amongst US allies, especially Australia, that could yield results. There also have been discussions between the US and Russia, now stalled partly because of the precarious state of US-Russia relations, and partly due to the fact that depending on Russia has the same negative implications, as cooperating with China. However, Russia has massive rare earth reserves.

Washington should urgently explore partnership opportunities with Japan and other allies such as Australia. Reliance on China—or Russia—is untenable.

Conclusion

The US needs a long-term strategic plan for rare-earth security—one that combines investment in domestic mining, allied cooperation, and large-scale recycling. What we have now is piecemeal and underfunded.

Will Washington take the initiative—or continue to dabble in rare earths?
History suggests the latter.

Voices

Stephen Bryen

April 5, 2024

Stephen Bryen is a former Deputy Under Secretary of Defense and is a leading expert in security strategy and technology. Bryen writes for Asia Times, American Thinker, Epoch Times, Newsweek, Washington Times

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