{"id":8192,"date":"2025-07-13T12:07:15","date_gmt":"2025-07-13T18:07:15","guid":{"rendered":"https:\/\/vpzajoti4c.onrocket.site\/news\/heavy-rare-earths-the-defense-sectors-hidden-vulnerability\/"},"modified":"2025-07-13T20:07:42","modified_gmt":"2025-07-14T02:07:42","slug":"heavy-rare-earths-the-defense-sectors-hidden-vulnerability","status":"publish","type":"news-archive","link":"https:\/\/rareearthexchanges.com\/news\/heavy-rare-earths-the-defense-sectors-hidden-vulnerability\/","title":{"rendered":"Heavy Rare Earths: The Defense Sector&#8217;s Hidden Vulnerability"},"content":{"rendered":"\n<p><strong>Highlights<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Advanced U.S. weapons rely heavily on rare earth elements sourced almost exclusively from Myanmar and processed in China, creating a strategic vulnerability.<\/li>\n\n\n\n<li>The current supply chain is environmentally destructive and geopolitically unstable, with nearly 50% of heavy rare earths originating from Myanmar's conflict-prone Kachin State.<\/li>\n\n\n\n<li>U.S. Department of Defense is investing hundreds of millions to develop domestic rare earth production, but a secure supply chain remains years away from realization.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\">\n\n\n\n<p><em>In a nutshell: Advanced U.S. weapons from F-35 jets to precision-guided missiles rely on heavy rare earth elements (HREEs) to function under extreme conditions. Yet nearly all of these <a class=\"wpil_keyword_link\" href=\"https:\/\/rareearthexchanges.com\/news\/tensions-between-u-s-and-china-escalate-over-rare-earths-taiwan-and-tariffs-contradictions-and-strategic-risks-emerge\/\" title=\"Tensions Between U.S. and China Escalate Over Rare Earths, Taiwan, and Tariffs: Contradictions and Strategic Risks Emerge\" data-wpil-keyword-link=\"linked\" data-wpil-monitor-id=\"90000\">strategic minerals<\/a> are sourced and refined abroad \u2013 with roughly half, or more, originating in conflict-torn Myanmar and almost 100% processed in China. This investigative report breaks down why heavy rare earths are so critical, how China and Myanmar built a near-monopoly, and what is (and isn\u2019t) being done to diversify this supply chain.<\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Why Heavy Rare Earths Matter in Defense<\/h2>\n\n\n\n<p>Heavy rare earth elements \u2013 generally the latter part of the lanthanide series plus yttrium \u2013 possess unique magnetic, optical, and nuclear properties vital to <a href=\"https:\/\/natoassociation.ca\/critical-defence-minerals-rare-earths\/#:~:text=preparation%20for%20a%20REE,Mineral%20Security%20Act%20of%202015\" target=\"_blank\" rel=\"noopener noreferrer\" class=\"external-link\">modern military technology<span class=\"sr-only\"> (opens in a new tab)<\/span><\/a>. They enable weapons and systems to be lighter, more heat-resistant, and more powerful. The table below provides a snapshot of key HREEs and examples of their defense applications:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Heavy Rare Earth<\/strong><\/td><td><strong>Defense Applications<\/strong><\/td><\/tr><tr><td><strong>Dysprosium (Dy)<\/strong><\/td><td>Added to neodymium-iron-boron magnets for missiles, fighter jet engines, and drones \u2013 <a href=\"https:\/\/www.defense.gov\/News\/News-Stories\/Article\/Article\/3700059\/dod-looks-to-establish-mine-to-magnet-supply-chain-for-rare-earth-materials\/#:~:text=Rare%20earth%20permanent%20magnets%20are,microwave%20energy%20in%20radar%20systems\" target=\"_blank\" rel=\"noopener noreferrer\" class=\"external-link\">improving high-temperature performance<span class=\"sr-only\"> (opens in a new tab)<\/span><\/a>. Also used <a href=\"https:\/\/www.thomasnet.com\/insights\/dysprosium\/\" target=\"_blank\" rel=\"noopener noreferrer\" class=\"external-link\">in nuclear reactor control rods<span class=\"sr-only\"> (opens in a new tab)<\/span><\/a> (absorbs neutrons in naval reactors).<\/td><\/tr><tr><td><strong>Terbium (Tb)<\/strong><\/td><td>Critical in magnet alloys (with Dy) to maintain strength at high heat, e.g. in guided munitions and aircraft actuators. <a href=\"https:\/\/www.defense.gov\/News\/News-Stories\/Article\/Article\/3700059\/dod-looks-to-establish-mine-to-magnet-supply-chain-for-rare-earth-materials\/#:~:text=Rare%20earth%20elements%20are%20also,used%20in%20submarine%20sonar%20systems\" target=\"_blank\" rel=\"noopener noreferrer\" class=\"external-link\">Terbium is also used in Terfenol-D (Tb-Dy-Fe alloy) for high-power sonar transducers on submarines<span class=\"sr-only\"> (opens in a new tab)<\/span><\/a>.<\/td><\/tr><tr><td><strong>Yttrium (Y)<\/strong><\/td><td>Yttrium is used in defense applications for\u00a0producing phosphors in radar systems and night-vision goggles.\u00a0It is also used in\u00a0laser targeting and weapons in combat vehicles.\u00a0Yttrium-based lasers are used commercially in various applications, including defense system.<\/td><\/tr><tr><td><strong>Erbium (Er) &amp; Ytterbium (Yb)<\/strong><\/td><td>Erbium (Er) and Ytterbium (Yb) are used in several defense applications, primarily in laser systems for ranging, targeting, and countermeasures.\u00a0They are also used in satellite communications and space-based applications.<\/td><\/tr><tr><td><strong>Gadolinium (Gd)<\/strong><\/td><td>Used in specialized alloys and sensors; Gd\u2019s high neutron-absorption makes it useful in reactor shielding and control systems. Also employed in magnetostrictive alloys and possibly future radar\/sonar components. (Often obtained as byproduct of heavy REE extraction.).<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>As shown, HREEs go beyond just magnets. They permeate guidance systems, electric motors, stealth coatings, lasers, and even nuclear subs. In fact, the U.S. Department of Defense (DOD) notes it needs <em>\u201cnearly all\u201d<\/em> rare earths in some capacity for military platforms.<\/p>\n\n\n\n<p>A single F-35 fighter, for example, contains around 920 pounds of REEs, including heavies like Dy and Tb in key components. Without these \u201cspice of industry\u201d elements, many defense technologies simply cannot be produced.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">A Supply Chain Dominated by Myanmar and China<\/h2>\n\n\n\n<p>Despite their strategic importance, the U.S. has virtually no domestic supply of separated heavy rare earths. A NATO study bluntly noted that \u201cnone of [the heavy REEs] are produced in North America\u201d and the U.S. must import 100% of them from China. China\u2019s dominance is both direct and indirect: it mines about 70% of all rare earths and processes ~98% of the world\u2019s medium and heavy REEs. Crucially, a large share of the raw heavy rare earth feedstock comes from Myanmar\u2019s remote Kachin State, just over the Chinese border.<\/p>\n\n\n\n<p>REEx notes that, in fact, there are a series of pilots for heavies in North America, but none of them are prime time, and we are years away from any such moment.<\/p>\n\n\n\n<p>As <em>Rare Earth Exchanges<\/em> (REEx) has <a href=\"https:\/\/rareearthexchanges.com\/hree-projects-database\/\">reported<\/a> in the heavy rare earth element rankings project\/database, Myanmar Rebels secured the number one slot, at least for now. See the link. In recent years, Myanmar\u2019s HREE mines (mainly ion-adsorption clay pits in Kachin) have exploded in scale to meet Chinese demand. <span style=\"margin: 0px;padding: 0px\">By 2023, Chinese imports of heavy rare-earth oxides from Myanmar hit 41,700 tons, \u201cmore than double China\u2019s own quota for domestic HREE mining<\/span>,\u201d according to\u00a0Global Witness.<\/p>\n\n\n\n<p>Analysts estimate nearly 50% or more of global heavy rare earth supply now originates from Myanmar, according to Rare Earth Exchanges' research. These materials are trucked into China\u2019s Yunnan province, processed in Chinese refineries, and then shipped worldwide as magnet alloys, oxides, components, assemblies, or magnets. In effect, Myanmar has become China\u2019s \u201csecret weapon\u201d for heavies, providing the raw material that China itself is running short on.<\/p>\n\n\n\n<p>This supply chain is perilously concentrated. Beijing controls almost all refining of heavies and has not hesitated to wield that power. <em>\u201cChina\u2026has a near-monopoly over processing of heavy rare earths,\u201d<\/em> <a href=\"https:\/\/www.reuters.com\/world\/china\/china-risks-global-heavy-rare-earth-supply-stop-myanmar-rebel-victory-2025-07-08\/#:~:text=electronic%20vehicles%20and%20wind%20turbines\" target=\"_blank\" rel=\"noopener noreferrer\" class=\"external-link\">Reuters<span class=\"sr-only\"> (opens in a new tab)<\/span><\/a> noted, and in mid-2025 Beijing even threatened to cut off HREE purchases from Myanmar amid the Kachin conflict. Fighting between Myanmar\u2019s junta and the Kachin Independence Army has already disrupted mining, causing Chinese HREE imports from Myanmar to plunge ~50% in early 2025 <a href=\"https:\/\/rareearthexchanges.com\/news\/chinas-ultimatum-to-myanmar-rebels-risks-global-heavy-rare-earth-supply\/#:~:text=confirmation%20exists%20that%20China%20has,acted%20on%20the%20threat%E2%80%94yet\">per REEx<\/a>. Prices of <a class=\"wpil_keyword_link\" href=\"https:\/\/rareearthexchanges.com\/news\/energy-fuels-produces-first-u-s-dysprosium-oxide-what-it-means-for-the-supply-chain\/\" title=\"Energy Fuels Produces First U.S. Dysprosium Oxide-What It Means for the Supply Chain\" data-wpil-keyword-link=\"linked\" data-wpil-monitor-id=\"90003\">dysprosium and terbium<\/a> spiked as a result. Representatives from the Kachin state joined the <a href=\"https:\/\/forum.wordpress-1542803-6000058.cloudwaysapps.com\/?_gl=1*8vrrvt*_ga*OTk1OTk2NjU0LjE3NDk0OTA3NDU.*_ga_EMXG7HN7E2*czE3NTI0MjM2NzkkbzE1MCRnMSR0MTc1MjQyMzY4MiRqNTckbDAkaDA.\" target=\"_blank\" rel=\"noopener noreferrer\" class=\"external-link\">REEx Forum<span class=\"sr-only\"> (opens in a new tab)<\/span><\/a>.<\/p>\n\n\n\n<p>Western defense planners are alarmed that a local war in Myanmar \u2013 or a political move by China \u2013 could choke off the HREE spigot, crippling production of critical missiles, jets, and electronics. The U.S. Defense Department openly warns that continued reliance on foreign (read: Chinese) sources for rare earth products \u201cposes a risk to national security,\u201d as <a href=\"https:\/\/www.defense.gov\/News\/News-Stories\/Article\/Article\/3700059\/dod-looks-to-establish-mine-to-magnet-supply-chain-for-rare-earth-materials\/#:~:text=There%20are%2017%20elements%20on,to%20so%20many%20defense%20systems\" target=\"_blank\" rel=\"noopener noreferrer\" class=\"external-link\">cited<span class=\"sr-only\"> (opens in a new tab)<\/span><\/a> by the U.S. DoD. \u00a0Environmental and human costs underscore this brittle monopoly. <span style=\"margin: 0px;padding: 0px\">The heavy rare earths from Myanmar are extracted via in-situ leaching: miners inject ammonium sulfate or acid into hillsides to wash out REEs, as pointed out by the global German news agency\u00a0<a href=\"https:\/\/www.dw.com\/en\/the-dirty-secrets-behind-myanmars-rare-earths-boom\/a-72530460#:~:text=,the%20Myanmar%20environment%20activist%C2%A0told%20DW\" target=\"_blank\" rel=\"noopener noreferrer\" class=\"external-link\">DW<span class=\"sr-only\"> (opens in a new tab)<\/span><\/a>.<\/span><\/p>\n\n\n\n<p>This crude technique has devastated Kachin\u2019s ecosystems, turning rivers rust-red with pollution, poisoning farmland, and causing illness among villagers and mine workers, as cited in DW and other sources. \u00a0As cited in the DW report aforementioned, <em>\u201cThe mountains used to be green\u2026now those mountains are very ugly, the river turned red,\u201d<\/em> reports one researcher in the area. Yet the mining frenzy continues under weak or nonexistent regulation, often controlled by militias that can be mafia-like. Again, the Global Witness account points out it\u2019s a <strong>\u201c<\/strong>poisoning the present\u201d to \u201cfuel the future\u201d of global clean energy and defense tech, as one Global Witness investigation put it. These \u201cdirty secrets\u201d cast a shadow over the heavy rare earths powering U.S. weapons, nearly all of which trace back to Chinese refineries fed by Myanmar\u2019s troubled mines.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Geology is Destiny: Why China and Myanmar Dominate HREEs<\/h2>\n\n\n\n<p>How did we end up in a situation where Myanmar \u2013 a country that wasn\u2019t even on the rare earth map a decade ago \u2013 now supplies half the world\u2019s heavies, and China does virtually all the processing? The answer lies in a mix of geology and policy.<\/p>\n\n\n\n<p>Heavy rare earths tend to occur in different ore deposits than light rare earths. The heavies (Dy, Tb, etc.) are often enriched in what are called ion-adsorption clay deposits \u2013 a specialty of southern China\u2019s geology. Decades ago, Chinese prospectors discovered weathered clay ores in Jiangxi, Guangdong, and other southern provinces that held rare earth elements loosely bound to clay particles. These clays are \u201cespecially rich in heavy rare earths, such as dysprosium and terbium,\u201d and crucially, they are easy to mine, as cited in <a href=\"https:\/\/rawmaterials.net\/canada-rare-earth-announces-acquisition-of-a-refinery-in-laos\/#:~:text=Laos%20%E2%80%93%20A%20New%20Heavy,Rare%20Earth%20Player\" target=\"_blank\" rel=\"noopener noreferrer\" class=\"external-link\">Raw Materials.net<span class=\"sr-only\"> (opens in a new tab)<\/span><\/a>. In addition to China, Myanmar and Laos are key locations.<\/p>\n\n\n\n<p>Rather than blasting rock, producers can use simple leaching techniques (pouring ammonium solutions through the clay) to extract REEs. By the 1980s\u201390s, China had scaled up production from these ionic clays, flooding the world market with inexpensive heavy rare earth oxides.<\/p>\n\n\n\n<p>Myanmar happens to have similar geology across the border. Kachin State\u2019s rare earth boom is essentially an extension of the South China Clay Belt. When China began curbing some domestic rare earth mining due to environmental concerns and resource depletion, Chinese firms turned to Myanmar\u2019s clays as an alternate source. The deposits were plentiful, the local oversight minimal, and Myanmar\u2019s military junta (and rebel groups) were eager for revenue. By outsourcing extraction to Myanmar, <em>\u201cChina\u2026in effect outsourced much of its [heavy REE] extraction to Myanmar, at terrible cost to the environment and local communities,\u201d<\/em> notes Global Witness. This geological luck\u2013ionic clay richness \u2013 and China\u2019s willingness to exploit it gave them a stranglehold on heavy REEs.<\/p>\n\n\n\n<p>Meanwhile, other types of deposits elsewhere contain heavy REEs but are tougher to develop. For example, <a class=\"wpil_keyword_link\" href=\"https:\/\/rareearthexchanges.com\/news\/mp-materials-jumps-on-venezuela-talk-why-reex-sees-more-smoke-than-signal\/\" title=\"MP Materials Jumps on Venezuela Talk-Why REEx Sees More Smoke Than Signal\" data-wpil-keyword-link=\"linked\" data-wpil-monitor-id=\"90004\">monazite<\/a> \u2013 a mineral found in Australia, India, Brazil, and elsewhere as a byproduct of heavy mineral sands \u2013 contains a mix of rare earths, including some heavies. However, monazite is rich in thorium, a radioactive element, making its processing both hazardous and expensive (as seen in Malaysia, where processing monazite-rich ore led to radioactive waste controversies) cites <a href=\"https:\/\/www.thomasnet.com\/insights\/dysprosium\/\" target=\"_blank\" rel=\"noopener noreferrer\" class=\"external-link\">Thomasnet.com<span class=\"sr-only\"> (opens in a new tab)<\/span><\/a>.<\/p>\n\n\n\n<p>Extracting a small percentage of Dy\/Tb from <a class=\"wpil_keyword_link\" href=\"https:\/\/rareearthexchanges.com\/news\/tronoxs-600-million-moment-a-titanium-giant-tries-on-a-rare-earth-crown\/\" title=\"Tronox\u2019s 0 Million Moment: A Titanium Giant Tries on a Rare Earth Crown\" data-wpil-keyword-link=\"linked\" data-wpil-monitor-id=\"94739\">monazite<\/a> also isn\u2019t economically enticing when Chinese\/Myanmar clays offer a cheaper source. <a href=\"https:\/\/en.wikipedia.org\/wiki\/Xenotime\" target=\"_blank\" rel=\"noopener noreferrer\" class=\"external-link\">Xenotime,<span class=\"sr-only\"> (opens in a new tab)<\/span><\/a> another heavy-rich mineral, is found in some hard-rock deposits (like Northern Australia\u2019s Browns Range). But these require significant mining and refining effort for relatively modest output \u2013 barely a blip compared to the tens of thousands of tons coming out of Asia.<\/p>\n\n\n\n<p>In short, China and Myanmar\u2019s monopoly exists because they have the right resources and have borne the environmental costs to exploit them cheaply. An Australian rare earth executive summed it up via <a href=\"https:\/\/www.proactiveinvestors.com\/companies\/news\/1069339\/ionic-rare-earths-in-spotlight-as-china-tightens-rare-earth-export-controls-1069339.html\" target=\"_blank\" rel=\"noopener noreferrer\" class=\"external-link\">Proactive<span class=\"sr-only\"> (opens in a new tab)<\/span><\/a>: <em>\u201cMore than 95% of the world\u2019s supply of heavy REOs is from declining [ionic clay] reserves in southern China and Myanmar\u201d.<\/em><\/p>\n\n\n\n<p>The <em>\u201cdeclining\u201d<\/em> part is key \u2013 those clay reserves won\u2019t last forever at the current rate. China\u2019s own heavy REE clay mines are depleting, which is why it leaned so heavily on Myanmar (even 98% of medium and heavy REEs now come from Chinese or Myanmar sources). Other potential sources are emerging but face long timelines and questions of viability.<\/p>\n\n\n\n<p>Let\u2019s survey a few notable non-Chinese\/Myanmar sources of heavy rare earths:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Country<\/strong><\/td><td><strong>Deposit Type &amp; Composition<\/strong><\/td><td><strong>Current Production<\/strong><\/td><td><strong>Key Projects &amp; Companies<\/strong><\/td><td><strong>Foreign Involvement<\/strong><\/td><td><strong>Challenges<\/strong> <strong>Notes<\/strong><\/td><\/tr><tr><td>Laos<\/td><td>Ionic clays, rich in heavy REEs (HREEs)<\/td><td><a class=\"wpil_keyword_link\" href=\"https:\/\/rareearthexchanges.com\/news\/baogang-group-accelerates-rare-earth-and-steel-tech-innovation-with-strategic-breakthroughs-west-needs-to-take-seriously\/\" title=\"Baogang Group Accelerates Rare Earth and Steel Tech Innovation with Strategic Breakthroughs\u2014West Needs to Take Seriously\" data-wpil-keyword-link=\"linked\" data-wpil-monitor-id=\"103739\">Dormant<\/a> until recently; small scale<\/td><td>Canadian company refinery (~3,000 t\/yr LREE + HREE); Xiamen Tungsten JV<\/td><td>Heavy Chinese involvement (mining &amp; refining)<\/td><td>Likely to feed Chinese supply chain; geopolitically aligned with China<\/td><\/tr><tr><td>Vietnam<\/td><td>Significant reserves, mostly light REEs (LREEs) from <a class=\"wpil_keyword_link\" href=\"https:\/\/rareearthexchanges.com\/news\/saskatchewans-heavy-rare-earth-gambit-substance-spin-and-what-investors-should-watch\/\" title=\"Saskatchewan\u2019s Heavy Rare Earth Gambit: Substance, Spin, and What Investors Should Watch\" data-wpil-keyword-link=\"linked\" data-wpil-monitor-id=\"98946\">bastnaesite<\/a>; some HREEs in coastal sands<\/td><td>Minimal\u2014hundreds of tons\/year<\/td><td>Dong Pao mine; new foreign partnerships (U.S., Japan, Australia, Korea)<\/td><td>Aggressively courting foreign investment<\/td><td>Goal: 60,000 t\/yr REO by 2030; infrastructure and processing still underdeveloped<\/td><\/tr><tr><td>Australia<\/td><td>\u00a0 LREE-dominant (Mount Weld); some HREEs (xenotime, monazite)<\/td><td>Browns Range (pilot-scale HREE); Lynas mostly LREE<\/td><td>Lynas (Mount Weld, Texas separation plant); Northern Minerals (Browns Range); Iluka (Eneabba)<\/td><td>U.S. DoD support for HREE processing (<a class=\"wpil_keyword_link\" href=\"https:\/\/rareearthexchanges.com\/news\/lynas-profit-plunge-raises-questions-over-texas-plant-and-u-s-supply-chain\/\" title=\"Lynas Profit Plunge Raises Questions Over Texas Plant and U.S. Supply Chain\" data-wpil-keyword-link=\"linked\" data-wpil-monitor-id=\"91134\">Lynas Texas<\/a>)<\/td><td>HREE production remains small; processing ramping up; Eneabba project still maturing<\/td><\/tr><tr><td>Brazil<\/td><td>\u00a0 Ionic clays and mineral sands; large reserves incl. HREEs<\/td><td>Just launched <a class=\"wpil_keyword_link\" href=\"https:\/\/rareearthexchanges.com\/news\/brazils-serra-verde-mine-highlights-western-dependence-on-china-for-rare-earth-processing\/\" title=\"Brazil\u2019s Serra Verde Mine Highlights Western Dependence on China for Rare Earth Processing\" data-wpil-keyword-link=\"linked\" data-wpil-monitor-id=\"98945\">Serra Verde<\/a> (~5,000 t\/yr planned); ~80 tons REO in 2022<\/td><td><a class=\"wpil_keyword_link\" href=\"https:\/\/rareearthexchanges.com\/news\/u-s-bets-on-brazils-rare-earths-inside-the-465-million-serra-verde-deal\/\" title=\"U.S. Bets on Brazil\u2019s Rare Earths: Inside the 5 Million Serra Verde Deal\" data-wpil-keyword-link=\"linked\" data-wpil-monitor-id=\"99332\">Serra Verde<\/a> (Goi\u00e1s state); various undeveloped deposits. Mineas Gerais complex; BRE on northeast coast\u2014need to develop<\/td><td>Some exports go to Asia for processing<\/td><td>Nascent industry; lacks domestic separation\/refining; thorium, financing, and complexity hurdles remain. But some movement.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>Elsewhere, promising heavy rare earth projects are in development \u2013 for instance, Makuutu in Uganda (ionic clay, being advanced by <a href=\"https:\/\/ionicre.com\/\" target=\"_blank\" rel=\"noopener noreferrer\" class=\"external-link\">Ionic Rare Earths Ltd<span class=\"sr-only\"> (opens in a new tab)<\/span><\/a>.) boasts one of the highest heavy REE concentrations outside China.<\/p>\n\n\n\n<p>The U.S. itself has a heavy-rich deposit in Texas (Round Top) under study. But <em>for<\/em> now, none of these are producing significant quantities. As <a href=\"https:\/\/www.benchmarkminerals.com\/\" target=\"_blank\" rel=\"noopener noreferrer\" class=\"external-link\">Benchmark Mineral<span class=\"sr-only\"> (opens in a new tab)<\/span><\/a> Intelligence warned, there are \u201climited alternative sources\u201d of heavies coming online soon, so the world\u2019s dependence on that <em>\u201cremote corner of Myanmar\u201d<\/em> has only deepened.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Breaking China\u2019s Grip: Slow Progress and New Initiatives<\/h2>\n\n\n\n<p>Facing this strategic chokehold, the U.S. and allies are scrambling to rebuild a secure supply chain for heavy rare earths \u2013 essentially trying to replicate, in a cleaner way, what China did over decades. Progress has been halting but not without wins.<\/p>\n\n\n\n<p>The U.S.Department of Defense has taken an unusually hands-on role, directly investing in companies to jumpstart domestic capabilities. Since 2020, the DOD has pumped over $430 million into <a class=\"wpil_keyword_link\" href=\"https:\/\/rareearthexchanges.com\/news\/critical-response-why-the-state-of-rare-earths-is-not-a-state-of-emergency-misses-the-real-emergency\/\" title=\"Critical Response: Why \u201cThe State of Rare Earths Is Not a State of Emergency\u201d Misses the Real Emergency\" data-wpil-keyword-link=\"linked\" data-wpil-monitor-id=\"89999\">rare earth supply chain<\/a> projects, from mining to magnet manufacturing. A major focus is \u201cmine-to-magnet\u201d integration by 2027, ensuring every step (extraction, separation of both light and heavy REEs, metal alloying, and magnet fabrication) can be done domestically.<\/p>\n\n\n\n<p>And of course, there was the just recently announced <a href=\"https:\/\/rareearthexchanges.com\/news\/mp-materials-soars-on-dod-investment-but-what-does-it-mean-for-rare-earth-etf-investors\/\">bombshell MP Materials dela with the DOD<\/a>.<\/p>\n\n\n\n<p><a href=\"https:\/\/rareearthexchanges.com\/news\/mp-materials-soars-on-dod-investment-but-what-does-it-mean-for-rare-earth-etf-investors\/\">MP Materials surged nearly 50% after announcing a landmark $400 million investment from the U.S. Department of Defense<\/a>, giving the Pentagona 15% ownership stake and long-term strategic partnership. The deal cements MP as the cornerstone of America\u2019s domestic rare earth strategy, with vertically integrated operations at its Mountain Pass mine and a second U.S. magnet plant backed by $1 billion in private capital (Goldman Sachs and JP Morgan). This marks a major escalation in Washington\u2019s industrial policy, aimed at countering China\u2019s dominance in rare earth supply chains.<\/p>\n\n\n\n<p>This deal, under the Defense Production Act, effectively subsidizes U.S. production of NdPr magnets and heavy REE products by ensuring a <em>floor price<\/em> of $110\/kg, roughly double the current Chinese market price for NdPr. The infusion will fund MP\u2019s expansion into magnet manufacturing (with a new 10,000-ton\/yr magnet factory planned by 2028) and scale up heavy REE separation when feasible. In fact, MP announced it will add additional heavy separation capacity at Mountain Pass with a $150 million DOD loan. The CEO of Adamas Intelligence called it via <em><a href=\"https:\/\/www.reuters.com\/business\/mp-materials-partners-with-department-defense-boost-us-rare-earth-magnet-supply-2025-07-10\/#:~:text=MP%20will%20also%20build%20a,new%20factory%20launching%20in%202028\" target=\"_blank\" rel=\"noopener noreferrer\" class=\"external-link\">Reuters<span class=\"sr-only\"> (opens in a new tab)<\/span><\/a> \u201ca game changer for the ex-China industry and a much-needed surge in magnet production capacity.\u201d<\/em><\/p>\n\n\n\n<p>But the reality is that the supply of heavies is not sufficient to scale, and the DOD can take an active role in the partnership, helping to source deals elsewhere.<\/p>\n\n\n\n<p>This supply chain is perilously concentrated. Beijing controls almost all refining of heavies and has not hesitated to wield that power. <em>\u201cChina\u2026has a near-monopoly over processing of heavy rare earths,\u201d<\/em> <a href=\"https:\/\/www.reuters.com\/world\/china\/china-risks-global-heavy-rare-earth-supply-stop-myanmar-rebel-victory-2025-07-08\/#:~:text=electronic%20vehicles%20and%20wind%20turbines\" target=\"_blank\" rel=\"noopener noreferrer\" class=\"external-link\">Reuters<span class=\"sr-only\"> (opens in a new tab)<\/span><\/a> noted, and in mid-2025, Beijing even threatened to cut off HREE purchases from Myanmar amid the Kachin conflict. Fighting between Myanmar\u2019s junta and the Kachin Independence Army has already disrupted mining, causing Chinese HREE imports from Myanmar to plunge ~50% in early 2025 <a href=\"https:\/\/rareearthexchanges.com\/news\/chinas-ultimatum-to-myanmar-rebels-risks-global-heavy-rare-earth-supply\/#:~:text=confirmation%20exists%20that%20China%20has,acted%20on%20the%20threat%E2%80%94yet\">per REEx<\/a>. Prices of dysprosium and terbium spiked as a result. Representatives from the Kachin state joined the <a href=\"https:\/\/forum.wordpress-1542803-6000058.cloudwaysapps.com\/?_gl=1*8vrrvt*_ga*OTk1OTk2NjU0LjE3NDk0OTA3NDU.*_ga_EMXG7HN7E2*czE3NTI0MjM2NzkkbzE1MCRnMSR0MTc1MjQyMzY4MiRqNTckbDAkaDA.\" target=\"_blank\" rel=\"noopener noreferrer\" class=\"external-link\">REEx Forum<span class=\"sr-only\"> (opens in a new tab)<\/span><\/a>.<\/p>\n\n\n\n<p>There are also smaller initiatives: e.g., U.S.-based Energy Fuels is extracting mixed REEs (including some heavies) from monazite sand in Utah, and could supply feedstock to separation plants. The Pentagon has even funded R&amp;D into unconventional sources like coal ash and phosphate byproducts for rare earth extraction, hinting at the urgency to find <em>any<\/em> viable heavy REE source outside China.<\/p>\n\n\n\n<p>Despite these moves, the current reality remains unchanged: if a U.S. missile or jet is built today, the odds are 95% plus that its rare earth magnets or components came through China. The supply chain fix is racing the clock. U.S. officials acknowledge it will take years to fully establish domestic heavy REE production. As the 2015 GAO study warned, it could take <a href=\"https:\/\/natoassociation.ca\/critical-defence-minerals-rare-earths\/#:~:text=Furthermore%2C%20disruptions%20in%20REE%20supplies,development%20of%20a%20viable%20deposit\" target=\"_blank\" rel=\"noopener noreferrer\" class=\"external-link\">15 years to rebuild supply chains<span class=\"sr-only\"> (opens in a new tab)<\/span><\/a> and materials expertise after decades of offshoring.\u00a0 REEx has suggested that without an integrated, comprehensive industrial policy, the USA may never totally become resilient, not in the next two decades.<\/p>\n\n\n\n<p>We are now a decade into that window. If Myanmar\u2019s civil war or a geopolitical standoff cuts off supply <em>tomorrow<\/em>, the West would face a severe HREE shortage before alternate supply chains are ready.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Conclusion: A Critical Juncture<\/h2>\n\n\n\n<p>Heavy rare earth elements are a small-volume but indispensable ingredient in America\u2019s defense arsenal \u2013 truly <em>\u201csmall gears that power<\/em> big machines.\u201d The current monopoly by China (and its proxy Myanmar) has turned into a glaring strategic vulnerability. In an era of great-power competition, it\u2019s not a comfortable position to rely on your rival for the \u201csecret sauce\u201d of your advanced weapons. Beijing has already shown it is willing to weaponize <a class=\"wpil_keyword_link\" href=\"https:\/\/rareearthexchanges.com\/news\/china-tightens-rare-earth-leverage-as-export-value-plunges-ahead-of-u-s-talks\/\" title=\"China Tightens Rare Earth Leverage as Export Value Plunges Ahead of U.S. Talks\" data-wpil-keyword-link=\"linked\" data-wpil-monitor-id=\"90001\">rare earth exports<\/a> for leverage, as we have reported via REEx.<\/p>\n\n\n\n<p>And Myanmar\u2019s instability adds another layer of risk outside anyone\u2019s control.<\/p>\n\n\n\n<p>The good news is that this vulnerability is now widely recognized, and efforts are underway to address it. The bad news: there\u2019s no quick fix. And Washington DC with its ongoing penchant for marketing, likes quick wins, in time for midterm elections.<\/p>\n\n\n\n<p>Opening new mines, building separation plants, and scaling production to meaningful levels is a slow, capital-intensive process \u2013 <em>\u201ctime-consuming, expensive, and geographically limited,\u201d<\/em> as one analysis noted in a <a href=\"https:\/\/natoassociation.ca\/critical-defence-minerals-rare-earths\/#:~:text=Furthermore%2C%20disruptions%20in%20REE%20supplies,development%20of%20a%20viable%20deposit\" target=\"_blank\" rel=\"noopener noreferrer\" class=\"external-link\">Canadian defense report<span class=\"sr-only\"> (opens in a new tab)<\/span><\/a>. The U.S. Department of Defense\u2019s heavy investments in MP Materials and others show a welcome sense of urgency and willingness to break the economic paradigm that favored cheaper Chinese material. These moves, alongside allied projects in Australia, Europe, and elsewhere, aim to foster a more diversified, resilient supply of heavy rare earths in the coming years.<\/p>\n\n\n\n<p>For now, however, the supply lines still run through Myanmar\u2019s jungles and China\u2019s refineries and factories. Each Terbium-infused magnet and Dysprosium alloy in an American <a class=\"wpil_keyword_link\" href=\"https:\/\/rareearthexchanges.com\/news\/rare-earths-powering-the-sixth-generation-fighter-pipeline\/\" title=\"Rare Earths Powering the Sixth-Generation Fighter Pipeline\" data-wpil-keyword-link=\"linked\" data-wpil-monitor-id=\"90002\">fighter jet<\/a> links back to a muddy leach pond in Kachin or a refinery in Jiangxi. It\u2019s a dependency fraught with environmental, ethical, and strategic perils. Bridging that gap \u2013 from the current state to a secure supply \u2013 is imperative. The U.S. defense-industrial base is moving from awareness to action, but the clock is ticking. In the interim, a single diplomatic crisis or a rebel offensive in Myanmar could bring this issue from quietly urgent to painfully acute.\u00a0 Regrettably, China continues to wield significant leverage given the current state of global supply chains. Note the result of years of neglect on behalf of political and corporate elites in the West.<\/p>\n<span class=\"et_bloom_bottom_trigger\"><\/span>","protected":false},"excerpt":{"rendered":"<p>Discover how Myanmar and China dominate the critical heavy rare earth supply chain, threatening U.S. defense capabilities and global technology infrastructure.<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"news-type":[122,125,123],"organization":[325,326],"regions":[315,320],"class_list":["post-8192","news-archive","type-news-archive","status-publish","format-standard","hentry","news-type-ree-news","news-type-aerospace-defense","news-type-clean-energy-technology","organization-lynas-rare-earths","organization-mp-materials","regions-china","regions-united-states"],"acf":[],"_links":{"self":[{"href":"https:\/\/rareearthexchanges.com\/wp-json\/wp\/v2\/news-archive\/8192","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/rareearthexchanges.com\/wp-json\/wp\/v2\/news-archive"}],"about":[{"href":"https:\/\/rareearthexchanges.com\/wp-json\/wp\/v2\/types\/news-archive"}],"author":[{"embeddable":true,"href":"https:\/\/rareearthexchanges.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/rareearthexchanges.com\/wp-json\/wp\/v2\/comments?post=8192"}],"version-history":[{"count":31,"href":"https:\/\/rareearthexchanges.com\/wp-json\/wp\/v2\/news-archive\/8192\/revisions"}],"predecessor-version":[{"id":81728,"href":"https:\/\/rareearthexchanges.com\/wp-json\/wp\/v2\/news-archive\/8192\/revisions\/81728"}],"wp:attachment":[{"href":"https:\/\/rareearthexchanges.com\/wp-json\/wp\/v2\/media?parent=8192"}],"wp:term":[{"taxonomy":"news-type","embeddable":true,"href":"https:\/\/rareearthexchanges.com\/wp-json\/wp\/v2\/news-type?post=8192"},{"taxonomy":"organization","embeddable":true,"href":"https:\/\/rareearthexchanges.com\/wp-json\/wp\/v2\/organization?post=8192"},{"taxonomy":"regions","embeddable":true,"href":"https:\/\/rareearthexchanges.com\/wp-json\/wp\/v2\/regions?post=8192"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}