China controls 90% of rare earth processing and 99% of heavy REEs. If supply is cut tomorrow, F-35 production halts in 6–11 months. No single resource maps the full dependency chain. This one does.
Core Finding: The rare earth supply chain is not a mining problem — it is a processing monopoly. China controls over 90% of global rare earth processing, 99% of heavy REE separation, and 94% of permanent magnet production. The US has exactly zero scaled heavy rare earth separation capacity. Every F-35, Virginia-class submarine, and Tomahawk missile depends on materials that flow through Chinese facilities.
In October 2025, China’s Ministry of Commerce introduced the most aggressive rare earth control in history: the “0.1% Rule.” Any product globally containing more than 0.1% Chinese-origin rare earth by value now requires a Chinese export license. This extraterritorial claim extends China’s jurisdiction to components made in Germany, Japan, or anywhere else — if they contain Chinese neodymium.
Meanwhile, Myanmar provides 50–70% of global heavy rare earth feedstock — and 100% of it flows into China for processing. The US committed billions to onshoring (Project Vault, DPA Title III, DoE grants), but independent projections show non-Chinese capacity won’t exceed 7% of global magnet production by 2028.
This page consolidates the full dependency chain in one interactive resource: supply funnel, weapons-system intensity, element-level control, stockpile burn rates, the escalation timeline, and the scale gap between ambition and reality.
This page maps the supply chain at the center of the Great Power Cycle’s five war types — rare earth weaponization sits at the intersection of all five. Read the full framework →
The rare earth supply chain is a funnel that narrows at every stage — and China’s control increases at each step. The vulnerability is not in the ground. It’s in the factory.
Key Insight: The US mines ~11% of global rare earths at Mountain Pass (MP Materials). But mining is the least concentrated stage. The chokepoint is processing and magnet manufacturing — where China holds 90–94% share. Even Australian and Brazilian mines send their ore to China for processing.
Heavy rare earths — dysprosium, terbium, yttrium — are the most critical for defense applications and the hardest to substitute. Unlike light REEs (neodymium, praseodymium), there is no significant Western mine for heavy REEs. The global supply flows through a single corridor.
Myanmar’s Kachin State mining is controlled by ethnic armed groups with Chinese business ties. There is no “Myanmar alternative” — Myanmar IS the Chinese supply chain.
Even if the US mines its own light REEs at Mountain Pass, it cannot replace the Myanmar–China heavy REE axis. Heavy REEs are what make magnets stable at high temperatures — without dysprosium, F-35 magnets demagnetize under combat conditions. The US has no scaled separation capacity for heavy REEs, and building one takes 5–7 years minimum.
In October 2025, MOFCOM introduced the most expansive export control in rare earth history. Any product globally — regardless of where it was assembled — that contains more than 0.1% Chinese-origin rare earth by value requires a Chinese export license. This is extraterritorial jurisdiction over the global supply chain.
⚠ Result: China can legally block export of a German motor to a US defense contractor
Compliance Nightmare: Defense contractors must now trace rare earth provenance through 3–5 supply chain tiers. Most don’t know where their magnets come from, let alone the oxide inside them. Lockheed Martin, Raytheon, and BAE Systems have all acknowledged supply chain visibility gaps. The 0.1% threshold is low enough to capture virtually every defense component that contains a magnet, motor, or sensor.
Note: China suspended the October expansion for one year (until Nov 2026), but the April 2025 controls on 7 heavy REEs remain active. The legal framework is built. It can be reactivated with 30 days’ notice.
Every major US weapons platform depends on rare earth permanent magnets. Tap an element below to highlight which systems depend on it — and whether our scanners are detecting activity around it.
■ 99%+ China control ■ 90–99% ■ 70–90% | ● Scanner activity detected
Scanner activity = congressional trades, lobbying, 13F filings, or options flow detected in related tickers. See which tickers →
If China cuts rare earth supply 100% tomorrow, how long before US defense production halts? The National Defense Stockpile (NDS) holds limited reserves, and consumption rates vary dramatically between peacetime and conflict scenarios.
Under war-footing consumption: SmCo demand spikes 400% (missile production surge), NdFeB demand rises 250% (weapons and vehicle production ramp). The stockpile window for precision-guided munitions collapses from 6–8 months to 1–2 months. This is the scenario where Taiwan Strait escalation and rare earth weaponization intersect.
The rare earth escalation follows a predictable action–reaction flywheel. Each US restriction triggers a Chinese countermeasure, which triggers further US onshoring investment. The cycle is accelerating.
$12B in US funding sounds large. In reality, non-Chinese magnet capacity will reach approximately 5–7% of global production by 2028. The gap between ambition and physics is enormous.
The Math: China produces ~280,000 MT of NdFeB magnets per year. All announced non-Chinese projects combined — MP Materials, Lynas/Blue Line, USA Rare Earth, Vacuumschmelze, and Neo Performance — total approximately 15–20K MT by 2028. That is 5–7% of global capacity. Even the most aggressive onshoring timeline leaves a 93%+ dependency on Chinese-controlled supply through the end of this decade.
The scale gap is not a temporary condition — it is a structural decade-long forcing function. Even after Project Vault ($12B), DPA Title III invocations, and every announced Western facility, dependency barely moves. That means the policy flywheel must keep turning:
This is not a one-year trade. It is a structural reallocation of defense spending toward domestic critical mineral producers that will compound for a decade.
Several companies are racing to build non-Chinese rare earth supply chains. The table below shows current status, government backing, and projected separation readiness dates.
| Company | Stage | Gov Backing | Capacity Focus | Separation Ready | Status | Scanner Activity |
|---|---|---|---|---|---|---|
| MP Materials | Mine-to-Magnet | $400M DoD equity, DPA Title III | Light REE (NdPr) + magnets | 2025 (magnets shipping) | Operational | ● 4 sources |
| Lynas / Blue Line | Separation + Processing | $258M DoD contract | Light + Heavy REE separation | 2026 (Texas plant) | Delayed | ● 1 source |
| Energy Fuels (UUUU) | Heavy REE Pilot | DoE grants | Heavy REE from monazite sand | 2026–2027 | Pilot | ● 2 sources |
| USA Rare Earth | Heavy REE + Magnets | $1.6B gov package | NdFeB magnets (heavy REE focus) | H1 2026 (commercial) | Pre-Production | No activity |
| Ucore (UCU.V) | Separation Technology | DoD SBIR | RapidSX — novel separation | 2027 | Demo | No activity |
| Neo Performance (NEO) | Magnets (Estonia) | EU Critical Raw Materials Act | NdFeB magnets (Europe) | 2025 (Estonia operational) | Operational | No activity |
MP Materials is the only vertically integrated rare earth company in the Western Hemisphere — mining at Mountain Pass, separating NdPr oxide, and now manufacturing NdFeB magnets at its Fort Worth facility. The DoD holds a $400M equity stake (Jul 2025) plus $150M loan under DPA Title III. Read the full MP Materials playbook →
What About Recycling?
Urban mining and magnet recycling (recovering NdFeB from electronics, wind turbines, and EVs) currently supplies roughly 1–2% of global rare earth demand. Several companies are investing in closed-loop recovery, and congressional appropriations for recycling R&D are increasing. But physics is the constraint: collection infrastructure doesn’t exist at scale, demagnetization and separation are energy-intensive, and the feedstock is diffuse. Recycling will not materially reduce Chinese processing dependency before 2030. It is a long-term complement to primary supply, not a substitute.
The escalation flywheel creates a predictable pattern: each Chinese restriction accelerates US onshoring policy, which benefits domestic producers with government-backed demand floors. This is not a free-market commodity trade — it is a policy-driven monopoly creation.
The reflexive loop:
Every turn of the flywheel creates a larger government commitment. The commitment is bipartisan (DPA invocations under both administrations), structural (tax credits are permanent), and accelerating (each Chinese escalation widens the scope of US response). Companies at the center of this loop have asymmetric upside uncorrelated with broader market direction.
Past policy responses do not guarantee future government action. Timelines between restriction and response vary. See full methodology for how we track policy catalysts.
Cross-referencing congressional trades, institutional filings, lobbying spend, options flow, and policy catalysts across 17 tickers in this framework. Updated daily from 34 sources.
| TICKER | SCORE | SOURCES | DIR | KEY DATA POINTS |
|---|---|---|---|---|
| LMT | 80 | 11 | Bullish | $3.9M lobbying spend • DOD contracts active • Congressional trade (Cisneros) • Options flow • REE supply chain exposure via F-35 magnets |
| RTX | 80 | 11 | Bullish | Mullin (SASC) bought $15K-$50K • 3 more congressional trades • Debt maturity tracked • Patriot/SM-6 missile REE dependency |
| NOC | 60 | 12 | Bullish | $1.8M lobbying • Lobbying spend ramping • Cohen (SASC) sold $15K-$50K • B-21 Raider guidance systems use REE magnets |
| CCJ | 60 | 10 | Bullish | $260K Cameco lobbying + $70K Bracewell • Congressional sells (Cisneros) • GOV stakes • NRC federal jobs surge • Nuclear fuel supply chain chokepoint |
| MP | 60 | 7 | Bullish | DOD $45M equity stake via DPA • EXIM $10B Project Vault • Options IV 55th pctl • +154% 1Y rel. strength • Only US integrated REE mine-to-magnet |
| LEU | 60 | 7 | Bullish | DOE $150M HALEU contract • NRC hiring surge • DPA invocation • Only US HALEU enrichment • Earnings tone bullish |
| ALB | 60 | 6 | Bullish | $740K lobbying ($640K self + $100K BGR) • White House + DOE policy catalysts • Options active • Lithium-to-REE adjacency play |
| GD | 60 | 11 | Bullish | Cisneros bought • DOD contracts • Lobbying active • Debt maturity tracked • Gulfstream + combat vehicle REE exposure |
| BA | 60 | 10 | Bullish | $2.9M lobbying • Cisneros bought • DOD contracts active • Largest single-system REE dependency (F/A-18 actuators) |
| HII | 60 | 6 | Bullish | $3.8M lobbying (3 filings) • Lobbying ramp • Submarine REE magnets • Virginia-class supply chain |
| SMR | 56.6 | 5 | Mixed | NRC hiring • FTD $60M value • Rate-sensitive (FedWatch bearish) • Nuclear fuel demand driver |
| UUUU | 53.1 | 4 | Bullish | EXIM $10B Project Vault • DPA invocation • Options active • Multi-mineral (uranium + REE) |
| KTOS | 39.4 | 3 | Bullish | US Navy $61M contract • Options flow bullish • Drone propulsion REE motors |
| DNN | 35.9 | 3 | Bullish | Van Eck activist stake • Strong technical setup • ISR uranium extraction |
| HWM | 34.3 | 3 | Bullish | $140K lobbying • Donalds sold • FTD $29M value • Titanium + REE alloy for jet engines |
| NXE | 27.5 | 2 | Bullish | Strong technicals • FTD $43.6M • Rook I high-grade uranium deposit |
Convergence scores are composite weighted measures across independent data sources. Direction reflects the net bias of all indicators. Past convergence performance does not guarantee future results. Backtest uses 196 historical convergences from Q3-Q4 2025. See methodology for scoring details.
Full convergence breakdown for all 17 tickers with source-level detail, individual data points, conviction scores, and catalyst timelines. Plus real-time alerts when new sources confirm.
Unlock Full Convergence Data →The obvious rare earth plays are priced. MP Materials, Lynas, Cameco — every thematic ETF owns them. The real alpha sits in the forced actions that cascade through adjacent industries — mandatory demand in categories nobody is mapping to the rare earth thesis.
We’ve mapped 5 second-order and 3 third-order cascade categories where supply chain disruption creates mandated demand — not discretionary, not speculative. Compliance software for the 0.1% Rule. Separation reagents that scale linearly with every new facility. A radioactive waste bottleneck that nobody is discussing. And structural redesigns that eliminate rare earth dependency entirely.
China’s 0.1% Rule requires exporters to certify that no component containing more than 0.1% controlled rare earth material was processed through Chinese facilities. This forces every defense prime contractor to build 3–5 tier supply chain provenance systems — a compliance burden that didn’t exist before October 2025. Lockheed, RTX, and Northrop have all acknowledged visibility gaps in SEC filings. The compliance deadline creates non-discretionary software procurement.
Catalyst timeline: DFARS compliance deadline expected H2 2026. SAP and Oracle both have GovCloud FedRAMP certifications required for defense contracts. No pure-play public company exists for mineral provenance — the alpha is in the enterprise vendors who build the module first.
Every new REE separation facility needs industrial-scale solvent extraction reagents — Cyanex 272, D2EHPA, PC88A. Demand scales linearly with each new facility. MP’s Fort Worth expansion, Lynas Malaysia, USA Rare Earth Oklahoma — each one consumes thousands of tons of specialty chemicals that only 3-4 companies produce globally.
Why it matters: China currently produces ~70% of separation reagents. As Western facilities come online, reagent supply becomes the next bottleneck. Syensqo (spun from Solvay) inherited the Cytec extractant portfolio and is the closest to a pure-play. Revenue uplift is direct: more facilities = more reagent orders.
REE separation is extremely energy-intensive. Each new facility requires dedicated high-voltage substation upgrades and industrial-grade power delivery that takes 18-36 months to build. The grid infrastructure companies that build these substations have order backlogs extending to 2028+. This is the physical bottleneck nobody is pricing.
Convergence data: PWR shows congressional trades + FTD + lobbying. ETN shows congressional trades + FTD + options flow. Both are already in our convergence system with rising source counts. The REE thesis adds a demand driver that pure grid/AI investors aren’t mapping.
The cheapest REE optionality sits in companies already mining adjacent minerals. Energy Fuels (UUUU) extracts REEs from uranium mill tailings — the feedstock is literally a byproduct. NioCorp’s Elk Creek project produces niobium, scandium, and titanium together. These are zero-incremental-cost REE producers if separation technology works.
The fact nobody discusses: REE ores (especially monazite) contain thorium and uranium. Every separation facility generates low-level radioactive waste that requires NRC-licensed disposal. There are fewer than 5 commercial LLRW disposal facilities in the US. This is the hard infrastructure constraint that determines how fast domestic REE capacity can actually scale.
Ferrite and iron nitride magnets eliminate NdFeB dependency entirely. Lower performance but sufficient for many applications. Defense qualification timelines: 5-8 years.
End-of-life EV motors and wind turbines contain recoverable NdFeB. Urban mining could supply 10-15% of demand by 2030. Hydrogen decrepitation technology proven at lab scale.
Switched reluctance and induction motors use zero permanent magnets. Tesla already uses this in Model 3 rear. Defense adoption would eliminate the REE supply chain risk entirely for new platforms.
Full second-order cascade analysis across 5 categories with specific tickers, convergence scores, and catalyst timelines. Plus 3 third-order structural redesigns that could cap REE demand. Real data from our 36-source convergence system.
Unlock Cascade Analysis →Download the raw data behind this research as CSV. Includes elements, defense systems, timeline events, alternative suppliers, and stockpile estimates.
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