The F-35 fighter requires approximately 417 kilograms of rare earth materials per aircraft. A Virginia-class submarine requires nearly 4,000 kilograms. Guided missile systems, radar equipment, night-vision devices, electric motors for military vehicles, and the magnets in virtually every precision guidance system depend on rare earth elements. These are not peripheral inputs to modern military capability. They are foundational.
China mines approximately 60 percent of the world's rare earth elements and, more critically, processes roughly 85 to 90 percent of global supply. The distinction matters: rare earth processing is a technically demanding, environmentally intensive industrial process that takes years to develop and has been deliberately concentrated in China through decades of strategic investment and below-market pricing that drove competitors out of business.
The United States, which once had a significant rare earth industry centered on the Mountain Pass mine in California, allowed that capacity to atrophy. It now depends on Chinese processing for materials essential to its own defense systems — a supply chain vulnerability that has no close parallel in the history of American industrial dependence on a strategic adversary.
How the Dependence Developed
The story of rare earth dependence is a story about economics and short-term thinking defeating strategic calculation. Chinese rare earth producers, backed by state subsidies, were able to price their products below the cost of production for competitors who lacked equivalent government support. Western rare earth mines and processing facilities, unable to compete on price in a market that did not fully price strategic risk, closed.
The environmental dimension accelerated the concentration. Rare earth processing produces radioactive waste and requires significant environmental controls. Regulatory requirements in the United States and Europe made domestic processing expensive. Chinese facilities operated under less stringent requirements, producing a cost advantage that compounded the subsidy effect.
The result, by the 2010s, was near-total dependence on Chinese supply for rare earth elements and nearly complete dependence on Chinese processing. The defense implications were apparent to anyone who looked, but the problem competed for attention with more immediate priorities.
China's Leverage
China has demonstrated willingness to use rare earth supply as a coercive instrument. In 2010, during a diplomatic dispute with Japan over a fishing trawler incident near the disputed Senkaku Islands, China halted rare earth exports to Japan — then the world's largest consumer. The message was unambiguous, and Japan accelerated its rare earth diversification efforts in response.
The threat of similar action against the United States or its allies is a standing feature of the strategic competition between Washington and Beijing. Chinese officials have referenced rare earth leverage explicitly in the context of trade disputes. The dependence that creates that leverage was not forced on the United States — it was allowed to develop through decades of market-driven decisions that did not account for strategic risk.
The Diversification Effort
Recognition of the problem has produced policy responses on multiple fronts. The Defense Production Act has been invoked to support domestic rare earth projects. The Inflation Reduction Act and CHIPS Act created incentives for domestic critical minerals processing. Australia, Canada, and allied nations with significant rare earth deposits have been engaged as alternative suppliers. The Mountain Pass mine has resumed production.
Processing capacity is the harder problem. Building a rare earth processing facility requires capital investment, technical expertise, environmental permitting, and years of development time. The United States cannot have meaningful domestic processing capacity on a timeline of less than five to ten years under the most optimistic scenarios. Allies with processing capabilities — Japan has invested heavily — provide some alternative supply, but the gap between current dependence and strategic sufficiency remains large.
The Broader Critical Minerals Picture
Rare earths are one dimension of a broader critical minerals vulnerability. Cobalt, essential to battery technology, is concentrated in the Democratic Republic of Congo and often processed in China. Lithium, essential to electric vehicles and grid storage, is concentrated in a handful of countries. Gallium and germanium — critical to semiconductor manufacturing — are almost exclusively processed in China, which imposed export controls on both in 2023 in response to Western semiconductor restrictions.
The pattern across critical minerals is consistent: concentrated supply, significant Chinese processing dominance, and inadequate Western investment in diversification until disruption becomes acute. The rare earth problem is the clearest case, but it is not the only one. The strategic competition with China is, in significant part, a competition over who controls the material inputs to the technologies that will define 21st-century economic and military power.