Rare Earths Deliver the Hidden Power Behind Modern Defense

Rare earths are becoming a strategic investment opportunity because defense modernization and supply-chain security are driving the construction of integrated mine-to-magnet capacity outside China.

• Global defense spending exceeded $2.7 trillion annually in 2025, while NATO has classified rare earths among its 12 defense-critical raw materials and pledged to raise defense spending to 5% of GDP by 2035.
• The U.S. Department of Defense currently requires an estimated 3,000–4,000 tonnes of specialized rare earth magnets annually, potentially rising to 10,000 tonnes by 2030, versus only 20,000–25,000 tonnes of ex-China production today.
• Rare earth dependence extends across the F-35, submarines, drones, missiles, radar and smart bombs; deliveries of new F-35s were temporarily halted in 2022 after a Chinese-sourced alloy was found in an engine magnet supply chain.
• China refined 91% of the world's magnet rare earths and produced 94% of finished rare earth magnets in 2024, so developing a mine outside China does not by itself create a secure alternative supply.
• Since 2020, the U.S. Department of Defense has awarded nearly $1 billion to domestic rare earth supply chains, including a 2025 agreement with MP Materials featuring a $110/kg NdPr price floor, a 10-year commitment to purchase all magnets from its planned 10X facility, and broader financing support.

Takeaway: The opportunity lies across ex-China mining, processing, refining and magnet manufacturing, but investors must distinguish viable projects from those dependent on government support because permitting, capital intensity, technical complexity, long development timelines and commodity-price volatility remain significant risks.