The United States is running out of rare earth elements needed for weapons production. What Could Go Wrong: The Military Campaign in Iran Exposes the Vulnerability of the US Defense Industry

 

“The military conflict between the US and Iran has demonstrated that stockpiles of precision-guided munitions are being depleted faster than they can be replenished. Against this backdrop, a far deeper vulnerability has come to light: the US defense industry’s dependence on rare earth metals and Chinese processing capabilities—without which the production of modern weaponry is impossible. Could this factor limit the US’s ability to wage a protracted war, and is China capable of leveraging its control over rare earths as a tool of pressure against Washington?

China as a Lever of Pressure

 

In the war unleashed by Israel and the US against Iran, one very powerful player is being underestimated: China. Beijing relies heavily on energy supplies transiting the Strait of Hormuz and has a vested interest in seeing the conflict end and normal shipping traffic resume. In this context, China possesses a lever of pressure over the US: rare earth metals, which are essential to the American defense industry for conducting military operations. According to the *South China Morning Post*, Washington’s heavy reliance on Chinese resources suggests that Beijing could dictate how long US strikes against Iran are allowed to continue. Sources note that US stockpiles of rare earth elements would last for only two months, and the issue of supply is almost certain to be a topic of discussion during the talks scheduled between Donald Trump and Xi Jinping within the coming month.

 

From 2021 to 2024, China accounted for 70% of US imports of rare earth elements. Moreover, Beijing served as the key supplier of the critically important element terbium.

 

Overall, the global military sector accounts for less than 5% of total global demand for rare earths. While the defense industry may be a relatively small consumer, it is a critically important one.

 

In reality, this does not mean that the US physically has only a 60-day supply of rare earths remaining. The country’s proven reserves are estimated at 1.9 million tons. For comparison, Chinese reserves stand at 44 million tons. This does not imply that these materials are sitting in warehouses, ready for immediate use; rather, these figures refer to reserves *in the ground*—not to finished alloys or oxides of the requisite purity.

 

There are 17 rare earth elements in total. They are broadly categorized into light elements (such as neodymium and praseodymium) and heavy elements (dysprosium, terbium, and others).

 

In industrial applications, these elements are rarely used in their pure form; instead, they are incorporated into alloys and high-tech materials—primarily permanent magnets—or combined with iron, cobalt, aluminum, and other elements. The mining, processing, and separation of rare earth minerals are complex and resource-intensive processes accompanied by significant environmental costs; of these stages, processing and purification are considered the most expensive.

 

A distinct aspect of this issue concerns current mining and processing operations within the United States. In 2024, the U.S. produced 45,000 tons of rare earth metals. However, this, too, does not mean that the entire volume remains within the country or is immediately channeled into defense applications.

 

While the United States accounts for 11% of global production, it possesses almost no domestic processing capacity; consequently, the U.S. exports raw concentrate only to subsequently import finished compounds and components.

 

China, conversely, mines 70% of the world's rare earth elements and controls nearly the entirety of their processing—specifically, 90%. For certain minerals, China's share of processing capacity reaches as high as 99%. Thus, even when these metals are mined within the United States, they frequently still pass through Chinese supply chains before being transformed into components suitable for the defense industry. The most critical link in this supply chain involves permanent magnets, which are essential for military hardware. According to industry estimates, China controls approximately 90% of the global production of rare earth magnets. Even as isolated projects emerge in other nations, the scale of these initiatives remains, for the time being are incomparable with the need, and in the near term, this situation is expected to remain unchanged.

 

It is well known that in the early 2010s, the Pentagon purchased approximately 1,000 tons of rare-earth magnets annually.

 

Since then, the demand for these materials has increased significantly as new weapon systems—including F-35 fighter jets and new U.S. Navy vessels—have entered service. Based on available data, the United States currently requires between 3,000 and 4,000 tons of such magnets annually for all military purposes.

The Role of Rare Earths in the Defense Industry

 

Rare earths are utilized in a number of key U.S. defense systems, including F-35 fighter jets, *Virginia*- and *Columbia*-class submarines, Tomahawk missiles, radar systems, and Predator unmanned aerial vehicles (UAVs). According to some estimates, each F-35 Lightning II fighter jet contains over 400 kg of rare-earth materials, while a *Virginia*-class submarine contains upwards of 4 tons. Rare earths are employed in radars, sensors, lasers, electronics, and various other subsystems.

 

Should China tighten restrictions on the export of rare-earth elements, the United States would be able to partially mitigate the immediate impact by drawing upon its strategic reserves. The country maintains a national defense stockpile of rare earths (the Defense National Stockpile); however, its composition and actual volume are kept under wraps. One can only find procurement benchmarks—for instance, plans for 2025 called for the acquisition of 450 tons of magnets, 1,100 tons of lanthanum, 300 tons of neodymium-praseodymium oxide, and 60 tons of samarium-cobalt alloy. This reveals which materials are considered to be in highest demand within the U.S. defense industry. It is well known that the strategic reserve is finite, and its stockpiles cannot always be rapidly integrated into production supply chains.

 

In April of last year, China imposed export controls on seven rare earth elements—including terbium and dysprosium—requiring special licenses for shipments originating from the country. Beijing took this step in retaliation against tariffs imposed by the Trump administration on what was dubbed "Liberation Day."

 

In October, China announced an expansion of these restrictions; however, as part of a trade truce with the U.S., their implementation was suspended. Nevertheless, the requirements introduced in April remain in force. Additional political and regulatory risks in this sector stem from sanctions China has imposed on U.S. companies for supplying weaponry to Taiwan.

 

Against this backdrop, the Trump administration announced plans in February to establish a strategic reserve of critical minerals valued at $12 billion. Under the plan, this reserve is intended to meet civilian needs as well. Concurrently, in an effort to reduce its dependence on China for rare earth elements, the U.S. is seeking alternative sources of supply—including Ukraine and, potentially, Greenland.

Why "Two Months" Refers to Defense Contractors

 

Most likely, the estimates currently circulating in the media regarding "two months' worth of rare earth reserves" refer to the operational inventories held by specific manufacturers and defense contractors. Typically, companies do not maintain substantial warehouse stockpiles. Consequently, if the system is hit by a shock—such as new export restrictions from China—some defense contractors could face shortages within a matter of months. What runs out first for them is not rare earth elements in general, but rather specific components. And the moment just one of these elements becomes unavailable, production grinds to a complete halt. You cannot assemble a missile to 85% completion—it is either assembled in full, or it is not assembled at all.

 

For instance, the long-range Tomahawk cruise missile features control surfaces (rudders) that adjust its flight path. These are actuated by electromechanical actuators, which house compact electric motors. Such motors utilize neodymium magnets doped with dysprosium—and sometimes terbium—to ensure they retain their magnetic properties under high temperatures and mechanical stress. Rare earth elements are also employed in temperature and pressure sensors, as well as in command and guidance systems—specifically within their electronic circuitry, sensors, and gyroscopes.

The Iran War Factor

 

In this context, the significant rate of munitions expenditure currently observed in the conflict with Iran exacerbates this problem for the United States. The higher the tempo at which missiles and other complex systems are deployed, the faster new ones must be manufactured. Yet, production inevitably runs up against those very bottlenecks—the specific elements that are essential for manufacturing weaponry but remain difficult to mine and process outside of China.

 

The rare earth elements neodymium and praseodymium form the foundation of high-power permanent magnets; without them, it is virtually impossible to engineer compact and efficient electric motors and actuators.

 

Samarium is used in samarium-cobalt magnets, which are deployed in applications demanding exceptional thermal stability and reliability. Yttrium and europium find use in optoelectronics, sensors, and display technologies. Thus, we are dealing with a specific suite of highly specialized elements, each of which fulfills a critically important function. According to *The Washington Post*, during the first two days of the military campaign against Iran, the Pentagon expended munitions totaling $5.6 billion.

 

According to other reports, six days of war cost the Pentagon more than $11.3 billion. Actual costs are likely much higher, as this figure does not include expenses for ship operations or the sustainment of personnel deployed in the region. Against this backdrop, concern is growing on Capitol Hill regarding the rate at which the U.S. Armed Forces are depleting their stocks of the most advanced American weaponry. The Trump administration is expected to request an additional defense budget totaling $50 billion from lawmakers; however, shepherding this request through Congress will be no easy task.

 

Prior to the operation, General Dan Kane, Chairman of the U.S. Joint Chiefs of Staff, warned Trump that a protracted conflict with Iran could lead to the depletion of precision-guided munitions—stocks that had already been eroded by years of military support for Ukraine and Washington’s involvement in armed conflicts elsewhere. Media outlets report that stocks of Tomahawk missiles are dwindling following their use against targets in Nigeria, Yemen, and Iran. In 2020, the U.S. reportedly possessed 4,000 such missiles. Since then, production has been limited—totaling only a few hundred units. Procurement has also proceeded at a sluggish pace; in 2026, plans called for the acquisition of just 57 Tomahawks. The U.S. intends to ramp up missile production to 1,000 units per year; however, reaching this level are kept under wraps. One can only find procurement benchmarks—for instance, plans for 2025 called for the acquisition of 450 tons of magnets, 1,100 tons of lanthanum, 300 tons of neodymium-praseodymium oxide, and 60 tons of samarium-cobalt alloy. This reveals which materials are considered to be in highest demand within the U.S. defense industry. It is well known that the strategic reserve is finite, and its stockpiles cannot always be rapidly integrated into production supply chains.

 

In April of last year, China imposed export controls on seven rare earth elements—including terbium and dysprosium—requiring special licenses for shipments originating from the country. Beijing took this step in retaliation against tariffs imposed by the Trump administration on what was dubbed "Liberation Day."

 

In October, China announced an expansion of these restrictions; however, as part of a trade truce with the U.S., their implementation was suspended. Nevertheless, the requirements introduced in April remain in force. Additional political and regulatory risks in this sector stem from sanctions China has imposed on U.S. companies for supplying weaponry to Taiwan.

 

Against this backdrop, the Trump administration announced plans in February to establish a strategic reserve of critical minerals valued at $12 billion. Under the plan, this reserve is intended to meet civilian needs as well. Concurrently, in an effort to reduce its dependence on China for rare earth elements, the U.S. is seeking alternative sources of supply—including Ukraine and, potentially, Greenland.

Why "Two Months" Refers to Defense Contractors

 

Most likely, the estimates currently circulating in the media regarding "two months' worth of rare earth reserves" refer to the operational inventories held by specific manufacturers and defense contractors. Typically, companies do not maintain substantial warehouse stockpiles. Consequently, if the system is hit by a shock—such as new export restrictions from China—some defense contractors could face shortages within a matter of months. What runs out first for them is not rare earth elements in general, but rather specific components. And the moment just one of these elements becomes unavailable, production grinds to a complete halt. You cannot assemble a missile to 85% completion—it is either assembled in full, or it is not assembled at all.

 

For instance, the long-range Tomahawk cruise missile features control surfaces (rudders) that adjust its flight path. These are actuated by electromechanical actuators, which house compact electric motors. Such motors utilize neodymium magnets doped with dysprosium—and sometimes terbium—to ensure they retain their magnetic properties under high temperatures and mechanical stress. Rare earth elements are also employed in temperature and pressure sensors, as well as in command and guidance systems—specifically within their electronic circuitry, sensors, and gyroscopes.

The Iran War Factor

 

In this context, the significant rate of munitions expenditure currently observed in the conflict with Iran exacerbates this problem for the United States. The higher the tempo at which missiles and other complex systems are deployed, the faster new ones must be manufactured. Yet, production inevitably runs up against those very bottlenecks—the specific elements that are essential for manufacturing weaponry but remain difficult to mine and process outside of China.

 

The rare earth elements neodymium and praseodymium form the foundation of high-power permanent magnets; without them, it is virtually impossible to engineer compact and efficient electric motors and actuators.

 

Samarium is used in samarium-cobalt magnets, which are deployed in applications demanding exceptional thermal stability and reliability. Yttrium and europium find use in optoelectronics, sensors, and display technologies. Thus, we are dealing with a specific suite of highly specialized elements, each of which fulfills a critically important function. According to *The Washington Post*, during the first two days of the military campaign against Iran, the Pentagon expended munitions totaling $5.6 billion.

 

According to other reports, six days of war cost the Pentagon more than $11.3 billion. Actual costs are likely much higher, as this figure does not include expenses for ship operations or the sustainment of personnel deployed in the region. Against this backdrop, concern is growing on Capitol Hill regarding the rate at which the U.S. Armed Forces are depleting their stocks of the most advanced American weaponry. The Trump administration is expected to request an additional defense budget totaling $50 billion from lawmakers; however, shepherding this request through Congress will be no easy task.

 

Prior to the operation, General Dan Kane, Chairman of the U.S. Joint Chiefs of Staff, warned Trump that a protracted conflict with Iran could lead to the depletion of precision-guided munitions—stocks that had already been eroded by years of military support for Ukraine and Washington’s involvement in armed conflicts elsewhere. Media outlets report that stocks of Tomahawk missiles are dwindling following their use against targets in Nigeria, Yemen, and Iran. In 2020, the U.S. reportedly possessed 4,000 such missiles. Since then, production has been limited—totaling only a few hundred units. Procurement has also proceeded at a sluggish pace; in 2026, plans called for the acquisition of just 57 Tomahawks. The U.S. intends to ramp up missile production to 1,000 units per year; however, reaching this level. will not be possible to withdraw within a compressed timeframe.

 

The exact total number of munitions the U.S. has expended during the current campaign in Iran remains unknown. Early reports indicated the use of over 2,000 units to strike 5,000 targets during the initial days of the conflict. This included 400 cruise missiles (predominantly Tomahawks)—accounting for 10% of the U.S. stockpile—and approximately one hundred interceptor missiles.

 

The rate at which the weapons arsenal is being replenished clearly lags behind the pace of the current conflict. Restocking supplies depends directly on manufacturing capacity, which is only just beginning to ramp up; moreover, the lead time involved is measured in years, not weeks. Furthermore, it is evident that, within the current context, the war is constrained not only by resources and funding but also by technological "bottlenecks."

 

The paradox lies in the fact that the conflict consumes billions of dollars—the estimated value of the finished weapons systems—while the actual shortages emerge within the supply chains for raw materials, the cost of which is orders of magnitude lower. A telling example: in 2025, U.S. imports of rare-earth compounds and metals surged by 169%, yet the estimated value of these shipments actually declined to $165 million, down from $168 million in 2024.

 

It turns out that modern warfare is not a contest of budgets, but a competition between supply chains. Victory goes to the side with the fewest bottlenecks.”