English
The supply of rare earths could become a strategic bottleneck for the US in times of geopolitical tension. This is according to a report by the South China Morning Post.
According to the report, Washington only has about two months of reserves left for the military use of these highly sought-after raw materials. This figure is particularly significant in the context of potentially prolonged military operations in the Middle East, as rare earths are indispensable for a range of modern defense systems.
Key applications such as missile guidance systems, fighter jets, and radar technologies are affected. Rare earths are thus at the intersection of resource policy, the defense industry, and foreign policy. This situation is particularly delicate for the US because China plays a dominant role in both extraction and processing. Dependence on Chinese supply chains is therefore not only an industrial policy issue but also a security policy factor.
In the current tense environment in the Middle East, this structural weakness is becoming particularly visible. Analysts assume that Beijing could indirectly gain influence over the duration and cost of potential US military operations if exports were restricted or supply chains disrupted. This once again highlights rare earths as a group of raw materials whose importance extends far beyond traditional industrial applications.
Rare earths are central to modern weapons systems
The strategic relevance of rare earths stems from their role in a variety of modern technologies. In the military sector, they are used in precision systems, aviation, and radar and sensor technology. Anyone dependent on these materials is not only reliant on mining capacities but, above all, on processing and availability along global supply chains.
For the US, this creates a sensitive conflict of interest. On the one hand, Washington wants to maintain its military operational capability. On the other hand, the supply of critical minerals remains heavily linked to China. This constellation makes rare earths a lever that does not necessarily have to be used directly to be effective. Even the possibility of restrictions or delays can increase costs, complicate planning, and generate political pressure.
Furthermore, the debate is not being conducted in isolation. The question of the availability of rare earths is linked to a broader reorganization of strategic raw material chains. In a phase where military conflicts, technology policy, and supply chain risks are converging, control over critical materials is gaining additional weight. Precisely because modern defense systems can hardly function without these raw materials, the importance of reliable sources of supply is growing.
China remains the dominant player in the rare earths market
The structural core of the problem lies in China’s global market position. According to available data, the country controls more than half of the world’s mine production and nearly all rare earth processing. This combination gives Beijing significance not only as a producer but also as a trendsetter along the value chain.
This dominance was already clearly demonstrated last year when China imposed export controls on rare earths. Western manufacturers subsequently came under pressure as they had to procure material to meet production deadlines. The episode illustrated how quickly regulatory interventions in China can impact international industrial and technological chains.
Now there are indications that Beijing intends to further expand its leadership in this area. In the 15th Five-Year Plan, the development of the Chinese rare earth industry is to be further strengthened between 2026 and 2030, while the system of export controls is simultaneously improved. This would allow China to expand rather than reduce its influence on global supply chains for defense technologies, electronics, and energy transition systems.
Analysts see this as an additional reason why China might be under less immediate pressure than the US in current negotiations or phases of geopolitical tension. If rare earths remain a scarce and strategically sensitive commodity, it shifts bargaining power—at least partially—in favor of those actors who decide on extraction, processing, and export rules.
Washington attempts to counteract, but new projects take time
The US and its partners are now responding with countermeasures. The Trump administration recently launched a $12 billion initiative to build up stockpiles of minerals such as rare earths. Allies were also later mobilized to form a trade bloc. The goal is to reduce dependencies and establish alternative supply chains outside of China.
Part of these efforts includes the Canadian company Ucore Rare Metals (WKN A2QJQ4 / TSXV UCU), which is working at full speed to bring its proprietary RapidSX technology for rare earth separation to commercial maturity. Ucore has received more than $22 million in support from the US government to date. The transfer of knowledge gained at a demonstration plant in Kingston, Canada, to the so-called Strategic Metals Complex in the US is underway, and Ucore expects to be able to manufacture its first products in the second half of 2026.
However, mining projects reveal the fundamental problem of strategic raw materials: new projects cannot be brought into production at short notice. According to the analysts cited, mining projects outside of China will start up too slowly to prevent bottlenecks in the near future. Consequently, pricing power could increasingly concentrate on a small number of producers, while buyers continue to struggle for security of supply.
This time horizon is crucial, especially for rare earths. Even if Western states now accelerate their resource policies, existing dependencies will persist for the time being. This means that while political programs and financial initiatives can change direction, they are hardly sufficient in the short term to offset China’s structural dominance.
Rare earths become a strategic factor in a tense global situation
Ahead of Donald Trump’s planned trip to China later this month, the debate over rare earths is gaining additional explosive potential. According to analysts, Beijing may currently be in less of a hurry to agree on regulations in the rare earth trade as long as Washington is under pressure in the Middle East and regarding military supply chains. This gives the issue a geopolitical dimension that extends far beyond the raw materials market.
The decisive statement is therefore: rare earths have long since ceased to be just a topic for mining companies, electronics manufacturers, or the energy transition. They have become a security policy factor that simultaneously affects military planning, foreign policy leeway, and industrial resilience. For the US, this means that it is not just the question of how much material is in storage that counts, but also how resilient its own supply actually is beyond Chinese supply chains.
“Source: Goldinvest.de”
