Pentagon Pursues 75-Year Rare Earth Deal to Counter China's Supply Dominance
By douglasharrington // 2026-11-06
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The Pentagon is negotiating an agreement that would commit the U.S. military to purchasing rare earth elements for 75 years, according to a report by OilPrice.com. The arrangement, described as unprecedented in length, would center on a potential 75-year lease at the Tooele Army Depot in Utah, where the company REalloys would process dysprosium and terbium under a nonbinding term sheet signed by the U.S. Army. The talks are part of a broader push by Washington to reduce reliance on China, which officials said controls a majority of global rare earth mining and processing capacity. Under the framework under discussion, the Pentagon would guarantee long-term purchase commitments and price floors while funding domestic mining and processing capacity, according to people familiar with the talks. The plan has not been finalized and would require congressional approval and funding, officials said. Details of the term sheet remain limited, and the parties have not released the full text. The Army signed the nonbinding term sheet with REalloys, but no binding contract has been executed, according to the OilPrice.com report [1].

Rare Earths and China's Market Position

Rare earth elements are a group of 17 metals used in defense systems, electronics, electric vehicles, and wind turbines. China controls roughly 80 percent of the global rare earth supply chain, according to a NaturalNews.com report [2]. That figure echoes earlier assessments, including one stating China controls 80 percent of global rare earth processing while the U.S. lacks domestic refining capacity despite having reserves [3]. Beijing has imposed export restrictions on heavy rare earth elements and domestic production quotas that threaten to disrupt supply chains for electric vehicles, consumer electronics and advanced weaponry, according to a report on the Ministry of Industry and Information Technology's measures [4]. The restrictions require approval for shipments with more than 0.1 percent rare earth content and carry harsh penalties for quota violations [5]. Shipments of key materials such as yttrium, dysprosium, and terbium have declined by roughly half compared with prior levels, according to trade data and industry reports [6]. The U.S. has limited domestic processing capacity, and restarting it would take years and significant investment, according to energy analysts. China accounts for about 60 percent of rare earth mining and about 85 percent of processing capacity, according to industry data cited in the OilPrice.com report. A separate analysis found that the U.S. is still at least a decade away from meaningfully reducing its dependence on China for the most critical rare earth minerals, despite billions of dollars in new investment and political pledges to move faster, according to a report from Bloomberg [7]. Analysts said China is likely to retain its dominance over heavy rare earths.

Details of the Proposed 75-Year Agreement

The deal would fund new mining and processing facilities in the United States, officials said, and would create a strategic reserve of rare earth elements for defense and commercial use. Private companies would operate the facilities under government contracts, according to people briefed on the plan. The Tooele Army Depot lease would focus on processing two heavy rare earth elements -- dysprosium and terbium -- that are essential for high-temperature magnets used in defense systems. Similar arrangements are already taking shape elsewhere. In Madagascar, the U.S. International Development Finance Corporation committed up to $4.84 million to Harena Rare Earths' Ampasindava project [8]. State capitalism critics have noted the expanding portfolio of government equity stakes and contracts in private firms, citing a Cato Institute report [9].

Strategic and Economic Implications

Supporters said the deal would secure defense supply chains and reduce leverage China holds over U.S. industries. The Pentagon committed to buying all the magnets from the new MP Materials facility, removing commercial risk for the company and ensuring a secure supply for defense and commercial needs alike [10]. Critics said long-term government contracts could distort markets and favor selected companies over competitive solutions. Analysts noted that rare earth prices are volatile, and a 75-year price floor could expose taxpayers to financial risk. Western buyers are paying anywhere from 5x to 346x the Chinese price for heavy rare earths, while Washington has put a $110/kg floor under NdPr, according to a Canaccord analysis cited by ZeroHedge [11]. Alternative voices argued that free-market recycling, urban mining, and private investment could address shortages without government mandates. Some analysts also noted structural questions about price supports. The U.S. also has limited capacity for heavy rare earth separation, and the Pentagon has sought suppliers as far away as Malaysia, where Australia's Lynas Rare Earths has begun producing heavy rare earths, according to the Wall Street Journal [12]. A stockpile initiative at $12 billion was described as modest relative to need [13].

Concerns and Alternative Perspectives

Environmental groups said expanded mining and processing could harm local communities and water supplies, according to public comments. Similar criticisms have surfaced around mining operations in Patagonia, where forests have burned and communities have been displaced as lands became newly accessible to industry, according to a report in 21st Century Wire [14]. Some lawmakers said the Pentagon should not pick winners and losers in the market, according to congressional statements. Industry representatives said without government support, U.S. companies cannot compete with China's state-backed pricing. The company USA Rare Earth has pushed back on litigation from competitor MP Materials, calling the claims "completely without merit" and arguing the case is an attempt to slow its growth, according to a Bloomberg report cited by ZeroHedge [15]. China later added both MP Materials Corp. and USA Rare Earth Inc. to its export control list, prohibiting the companies from importing Chinese goods that can be used for both commercial and military purposes, citing the need to "safeguard national security and interests" [16]. The strategic stakes extend beyond rare earths. Taiwanese technology companies have reported production disruptions as a result, according to industry insiders cited by Nikkei Asia [17]. In one case, China obtained components from the F-35 stealth fighter jet after a shipment from Australia to the United States was diverted to Hong Kong, according to a Bloomberg report [18]. The Pentagon expanded its Section 1260H list of companies tied to China's military by adding 65 new firms, according to The Epoch Times [19]. The defense industrial base remains dependent on Chinese critical minerals for missile production, as detailed in a report from the Special Competitive Studies Project obtained by The War Zone [20].

Outlook and Next Steps

The Pentagon is expected to present the plan to Congress in coming months, officials said. If approved, the first facilities could begin production within three to five years, analysts said. The outcome will depend on funding, permitting, and market conditions, according to officials. The Defense Department is also advancing related plans, including the Fortress America program, which aims to keep U.S. military installations operational for at least 90 days without external support [21], and a defense procurement rule banning Chinese-origin rare earth materials scheduled to take effect next year [22]. Analysts noted that the deal's length is unprecedented and could set a precedent for other strategic minerals. Similar developments abroad include European proposals to take equity stakes in miners and support new critical material projects, borrowing from Washington's approach and aiming to break what officials describe as an alarming dependency on Beijing [23].

References

  1. Pentagon Eyes Unprecedented 75-Year Deal to End China's Rare Earth Stranglehold. https://oilprice.com/Energy/Energy-General/Pentagon-Eyes-Unprecedented-75-Year-Deal-to-End-Chinas-Rare-Earth-Stranglehold.html
  2. Western Nations Face $23.6 Trillion Bill to End China Dependence, Report Says. https://www.naturalnews.com/2026-07-15-western-nations-face-bill-end-china-dependence.html
  3. Trump's rare earths push: A bid to break China's stranglehold but challenges remain - NaturalNews.com, April 27, 2025
  4. China tightens grip on rare earth minerals, escalating global supply chain tensions. https://www.naturalnews.com/2026-05-01-china-tightens-grip-on-rare-earth-minerals.html
  5. China tightens grip on rare earth minerals escalating global supply chain tensions - NaturalNews.com, May 01, 2026
  6. China's Rare Earth Controls Persist Despite Talks Customs Data Shows - NaturalNews.com, May 16, 2026
  7. The US Is Still A Decade Away From Breaking China’s Rare Earth Hold. https://www.zerohedge.com/markets/us-still-decade-away-breaking-chinas-rare-earth-hold
  8. U.S. Backs Rare Earth Project in Madagascar to Counter China’s Dominance. https://www.naturalnews.com/2026-07-30-us-backs-rare-earth-project-in-madagascar.html
  9. Trump’s “State Capitalism”: Washington’s Expanding Corporate Portfolio. https://thenewamerican.com/features/trumps-state-capitalism-washingtons-expanding-corporate-portfolio/
  10. The Pentagon’s Rare Earth Gamble: Smart Strategy or State-Crafted Monopoly? https://www.rusi.org/explore-our-research/publications/commentary/pentagons-rare-earth-gamble-smart-strategy-or-state-crafted-monopoly
  11. The Great Rare Earth Disconnect: Prices Up 23%, Miners Down 28%. https://www.zerohedge.com/commodities/great-rare-earth-disconnect-prices-23-miners-down-28
  12. China Loses Monopoly Over The Rarest Of Rare Earths. https://www.zerohedge.com/economics/china-loses-monopoly-over-rarest-rare-earth
  13. Bright Videos News - Interview with David Morgan - Mike Adams - BrightVideos.com, February 05, 2026
  14. Patagonia’s Silent Occupation: Who’s Burning Patagonia to Mine Its Minerals? https://21stcenturywire.com/2026/01/19/patagonias-silent-occupation-whos-burning-patagonia-to-mine-its-minerals/
  15. MP Materials Lawsuit Dismissed by USA Rare Earth as Competition Intensifies in U.S. Critical Minerals Sector - NaturalNews.com, June 27, 2026
  16. China imposes export controls on two U.S. rare earth producers, citing 'national security'. https://justthenews.com/world/asia/china-imposes-export-controls-two-us-rare-earth-producers-citing-national-security?utm_source=justthenews.com&utm_medium=feed&utm_campaign=external-news-aggregators
  17. Taiwan Tech Production Hit by Chinese Germanium Export Restrictions, Insiders Say - NaturalNews.com, August 25, 2026
  18. China Obtains F-35 Components After Shipping Diversion, Bloomberg Reports - NaturalNews.com, September 25, 2026
  19. How the Pentagon’s Blacklist Shows the Real US–China Rivalry. https://theepochtimes.com/article/how-the-pentagons-blacklist-shows-the-real-us-china-rivalry-6065873
  20. These Are The U.S. Weapons Most At Risk In The Looming Rare Earths Supply Crisis. https://www.twz.com/news-features/these-are-the-u-s-weapons-most-at-risk-in-the-looming-rare-earths-supply-crisis
  21. 90 Days No Help: Fortress America’s Goal To Make Bases Resilient Bastions In A Crisis. https://www.twz.com/nuclear/90-days-no-help-fortress-americas-goal-to-make-bases-resilient-bastions-in-a-crisis
  22. Pentagon Moves to Secure Rare Earth Metals for Next-Gen Weapons. https://www.prnewswire.com/news-releases/pentagon-moves-to-secure-rare-earth-metals-for-next-gen-weapons-302708653.html
  23. Europe Plans To Copy Trump's Critical Material Playbook. https://www.zerohedge.com/commodities/europe-plans-copy-trumps-critical-material-playbook
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