Highlights

• China controls over 98% of global heavy rare earths, threatening U.S. industrial and defense capabilities.
• Newstead recommends immediate investments, strategic stockpiling, and market protection mechanisms to counter Chinese mineral monopoly.
• The U.S. must quickly mobilize domestic and allied resources to secure critical mineral supply chains and prevent strategic vulnerability.

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In a sharp and urgent editorial for National Defense Magazine, Stacy Newstead, (opens in a new tab) vice chair of the NDIA Manufacturing Division (opens in a new tab), outlines a sobering assessment of America’s vulnerability to China’s stranglehold on critical minerals—especially gallium, germanium, and heavy rare earth elements. The piece argues that while China imposes new end-use export license requirements and embargoes, U.S. industry remains paralyzed by fragmented procurement, underfunded mining ventures, and delayed government action.

Key Facts (Verified)

• China processes over 98% of global heavy rare earths and dominates rare earth magnet production.
• The April 2025 license restrictions have throttled exports, echoing similar 2023 controls on gallium and germanium.
• Jervois Mining’s Idaho cobalt project was paused in 2023 after China flooded the market with cheap cobalt—a real-world case of strategic price suppression.
• The U.S. has only four aluminum smelters and one bauxite refiner left, highlighting systemic upstream erosion.

Policy Breakdown: What the Article Gets Right

Newstead makes four specific recommendations:

1. Immediate investments in non-Chinese oxide and magnet capacity.
2. A strategic stockpile buying at non-China prices to send a stable demand signal.
3. Market protection mechanisms against Chinese price dumping.
4. A qualified materials sourcing standard to track non-Chinese material content across defense and commercial supply chains.

Rare Earth Exchanges (REEx) suggests that these are rational, urgent, and well-supported by facts.

Some REEx questions to ponder. While the urgency is valid, the piece doesn't address:

• Why U.S. programmatic funding (e.g., DPA, CHIPS Act) remains delayed despite having received proposals in 2024.
• The lack of private sector scale-up, even when DoD support exists (e.g., MP Materials).
• Whether allies like Japan, Canada, or Australia are truly being mobilized as part of the solution (again REEx advocates for global allied solutions).

There’s also a missing link between the strategic call to action and the regulatory reform needed to shorten mine permitting and environmental reviews. A recent guest on the REEx podcast, Congresswoman Harriet Hageman Wyoming (opens in a new tab) elucidated to the REEx team on the labyrinth regulatory and compliance challenges in America.

 Bottom Line for Investors

Newstead’s message lands with unmistakable urgency: securing critical mineral supply chains is no longer a strategic option—it’s a national necessity. While the U.S. understands the challenge, delays in execution have already squandered valuable time. For retail investors, the real fault line lies between government urgency and the slow roll of capital deployment. That gap presents both the sector’s greatest risk and its sharpest upside.  That, along with the need for serious industrial policy and tight global supply chain alliances, is crucial.  At Rare Earth Exchanges™, our mission is to cut through the noise and deliver clear, hype-free insight to help you navigate it.