Why Washington Is Prioritizing Rare Earths as Strategic Resources

In a remarkable shift reminiscent of the past, the U.S. government is currently treating rare earth elements with the same level of caution that it once applied to its gold reserves. This move underscores the strategic importance of these minerals, particularly dysprosium and terbium, in modern defense and technological applications.

The Historical Framework

Historically, precious metals like gold were protected behind fortified walls, illustrative of their importance to a nation's security. In the late 1930s, the U.S. military began transferring its gold to Fort Knox, asserting control over this critical asset. Fast forward nearly nine decades, and a similar scenario is unfolding as Washington acknowledges the potential implications of relying heavily on foreign sources for essential rare earth elements. This time, however, the focus is on dysprosium and terbium, which are vital for the manufacturing of high-performance magnets used in military weapons, radar systems, and electric motors.

The U.S. Army's recent collaboration with REalloys (ALOY) to establish a processing facility for these rare earths at the Tooele Army Depot in Utah marks a monumental step in bolstering the domestic supply chain. According to Dr. Jeff Waksman, the Principal Deputy Assistant Secretary of the Army for Installations, Energy, and Environment, "The ability to process critical minerals on U.S. soil is a national-defense priority required for munitions, missiles, sensors, batteries, and the platforms our Soldiers depend on."

Navigating Supply Chain Challenges

Currently, China has a dominating grip on the global supply chain for rare earths, possessing about 91% of the world's separation and refining capabilities for magnet rare earths. As the Army relies heavily on these materials for its equipment, the question arises: how much can the U.S. afford to depend on external suppliers? In 2025, for instance, China imposed export controls that sent shockwaves through U.S. and European manufacturers, leading to temporary shutdowns and production halts. The ensuing crisis has laid bare the vulnerabilities in the defense supply chain and the urgent necessity for U.S. production capabilities in this area.

The Unique Arrangement at Tooele

The Tooele Army Depot's partnership with REalloys is also notable because this marks the first time the Army has allowed commercial mineral processing on its installations. The Army retains ownership of the land while REalloys is tasked with funding, constructing, and operating the facility. This unique arrangement mitigates the initial challenges often faced by new processing projects, as establishing an industrial site is no longer a barrier.

The choice of dysprosium and terbium is pivotal since these metals ensure that powerful magnets perform effectively under extreme conditions, a requisite for systems essential to national security. In addition to essential military applications, the expansion of the domestic supply chain for these minerals will serve various industries reliant on high-performance magnets.

In California near the Great Salt Lake, REalloys has commenced processing arrangements with the Saskatchewan Research Council (SRC) in Canada, securing long-term production of dysprosium and terbium. This collaboration aims to produce significant quantities of refined rare earth elements to be used in U.S. manufacturing. The ambitious project is set against the backdrop of the Army's 2027 sourcing deadline, bringing urgency to the initiative to establish a self-sufficient supply chain for defense materials.

Looking Ahead

The partnership with REalloys comes at a crucial time—the Pentagon's new rules regarding rare earth materials set to take effect will require defense suppliers to rigorously trace the origins of their materials. The recent $100 million financing secured by REalloys, immediately following the Army's conditional award for the Tooele project, illustrates a strong financial backing to expedite the hosting of a facility capable of processing these essential minerals.

While agreements are still being finalized, the strategic importance of domestic rare earth production is clearer than ever against the backdrop of global uncertainty. With the Tooele Army Depot as a potential centerpiece for future U.S. mineral processing operations, Washington is poised to treat rare earth processing with the same urgency and significance it once reserved for gold.

As the U.S. forges ahead to secure its mineral supply chain, the developments at Tooele may very well mark the dawn of a new era in national defense and industrial capacity, placing the nation on a path to self-sufficiency in critical resources.

Notable companies also involved in this sector include Albemarle Corporation, FMC Corporation, Teck Resources Limited, The Metals Company, and Critical Metals Corp., all of which are strategically positioned in the rare earths market, adapting to the changing landscape of mineral demand and security needs in the country.