How will USA DoD Ensure a Protected, Resilient Rare Earth Permanent Magnet Supply Chain?

Highlights

• The DoD is investing $439 million to create a domestic ‘mine-to-magnet’ supply chain for rare earth elements by 2027.
• Rare earth permanent magnets are crucial for defense systems, including F-35 aircraft and submarines, as well as various commercial applications.
• The DoD strategy involves sourcing, separation, processing, metallization, and magnet manufacturing, with several ongoing projects to achieve independence in magnet production.

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What are the U.S. Defense Department’s vision, goals, and objectives for bolstering domestic leverage over the rare earth elements (REE) supply chain?  At least what the powerful executive branch agency makes available publicly.  Top of mind is the securing of a sustainable supply chain regarding the permanent magnets used in important U.S. military weapons systems.

Earlier this year, in March, the DoD published its intentions on the topic.  Via their website, C. Todd Lopez, (opens in a new tab) writing for DOD News, (opens in a new tab) refers to the National Defense Industrial Strategy as a key driver for this policy, one augmenting for decades of inaction in regard to this important topic.

What are rare earth permanent magnets?

Rare earth permanent magnets are the strongest permanent magnets available and are made from alloys of rare earth elements. Rare earth magnets are the strongest permanent magnets, with a remanence exceeding 1.2 Tesla. They are also temperature stable, have a high coercive force, and are resistant to demagnetization.

The two most common types of rare earth magnets are neodymium (Nd-Fe-B) (opens in a new tab) and samarium cobalt (SmCo) (opens in a new tab). Neodymium magnets are considered the most powerful class of permanent magnets.

Rare earth magnets are used in many industrial, commercial, and technical applications, including:

1. Defense applications such as military weapons systems
2. Medical applications like MRI machines, X-rays, and PET imaging
3. Aviation and National Defense
4. Electronic devices like smartphones

5. Consumer goods like jewelry
6. Hard drives
7. Electric vehicles (EVs)

Why are rare earth permanent magnets important in the DoD sphere?

They are essential components, vital for a range of defense capabilities, including the F-35 Lightning II aircraft, Virginia and Columbia class submarines, and unmanned aerial vehicles to start. But they are also a critical part of commercial applications in the United States as shown above.

How much as the DoD invested to date in this domain?

According to Lopez, a writer and editor for the DoD, $439 million has been invested to date to establish domestic rare earth element supply chains.

This amount includes everything, from sources to the separating and refining of rare earth elements mined in the U.S; but also, to the development of downstream stateside processes needed to convert those refined materials into metals and then magnets.

What are some of the aims of this spend?

According to Danielle Miller (opens in a new tab), acting deputy assistant secretary of defense for industrial base resilience, who spoke with Lopez in March of this year, “DOD’s strategic investments are building capability at multiple stages of the rare earth supply chain and will provide a clear signal to private capital that the time is right to build additional resiliency.”

So, is the DoD on tract with its mine-to-magnet supply chain capability goal?

Yes. According to Miller, “We are on track to meet our goal of a sustainable, mine-to-magnet supply chain capable of supporting all U.S. defense requirements by 2027.”

Rare earth elements are also used in other ways that don’t involve magnets. Vehicle-mounted laser range finders, such as those found on Abrams M1A1/2 tanks, make use of rare earth elements, as do their portable counterparts and target designators. Other uses include fiber optics communication systems, cerium-polished optical lenses, and sonic transducers used in submarine sonar systems.

F-35, Virginia, and Columbia class submarines have used critical need for magnets produced from rare earth elements, as do Tomahawk missiles, a variety of radar systems, Predator unmanned aerial vehicles, and the Joint Direct Attack Munition series of smart bombs.

The DoD’s Lopez shares that the F-35 needs over 900 pounds of rare earth elements. Each Arleigh Burke DDG-51 destroyer requires 5,200 pounds, and a Virginia-class submarine needs 9,200 pounds.

So, what’s the summary of the U.S. DoD strategy?

Promulgated by the Office of the Assistant Secretary of Defense for Industrial Base Policy, the Manufacturing Capability Expansion and Investment Program (opens in a new tab) (MCEIP) directorate launched a five-year rare earth investment strategy to build “mine-to-magnet” domestic capacity at all critical nodes of the rare earth supply chain. Those critical nodes include sourcing, separation, processing, metallization, alloying, and magnet manufacturing.

What are some of the strategy’s critical nodes?

• The sourcing of rare earth elements means mining rare earth elements out of the ground. Note today Lopez writes that only one rare earth mine in the U.S. is currently active and selling to the commercial market.
• Another node includes separation marked by a series of processes that take out extractable rare earth elements from other elements and compounds in the mineral rock.
• Then there is the processing, involving the concentration of separated rare earth elements, and thereafter, the chemical treatment of the product leading to high-purity rare earth oxides or rare earth salts.
• Of course, next comes the metallization step, transforming rare earth salts into rare earth metals. This can involve the combination of metals to produce rare earth alloys.
• Last are rare earth magnets, typically produced from alloys that are sintered or bonded into a magnet block and then cut and coated according to specification.

Does all of this needs to occur domestically?

Absolutely. The DoD for this critical magnet supply chain necessitates that each step occurs within the United States.

Are projects underway to make this goal a reality?

Yes. According to the Todd Lopez entry the DoD has ongoing projects helping to make America independent when it comes to magnet production.

What are some examples of projects supporting DOD’s “mine-to-magnets” initiative?

• Nevada-based MP Materials secured $45 million in support from the U.S. government’s Manufacturing Capability Expansion & Investment Prioritization (opens in a new tab) (MCEIP) awards. MP Materials established the only integrated rare earth mine and oxide production facility in the U.S. The company is expected to continue to add capacity for additional oxide products through 2025, when they are projected to reach full-scale production.
• Lynas USA LLC (opens in a new tab), part of Lynas Rare Earths (opens in a new tab) Australia secured a combined $288 million in MCEIP funding to establish a second domestic, commercial-scale oxide production capability by 2026.
• MCEIP has also invested $10 million to explore the development of extraction technology and alternative sources of rare earth minerals from coal ash, acid mine drainage and other waste streams.
• Noveon Magnetics (opens in a new tab) has established a rare earth magnet manufacturing facility in San Marcos, Texas, with a $28.8 million award from MCEIP. The company produces qualified magnets from extracted or recycled material for both defense and commercial applications.
• MCEIP gives $2.3 million to help TDA Magnetics (opens in a new tab) to demonstrate a capability to source, produce and sell qualified magnets into DOD supply chains.
• 94.1 million awards to E-VAC Magnetics (opens in a new tab) to establish a commercial-scale rare earth magnet manufacturing capability by 2025. As part of this project, E-VAC will also develop domestic capacity to produce rare earth metals and alloys, a critical node of the supply chain linking early-stage rare earth processing to magnet production.

Importantly Todd Lopez from the DoD educates that presently the demand for rare earth material by domestic and partner entities outstrips supply of any one nation.

What does MCEIP look to invest in the future?

A focus on closing remaining supply chain gaps and promoting integration among the tiers.

About Rare Earth Exchanges

Rare Earth Exchanges was founded October 2024 to independently chronicle the dramatic reconfiguration of the global rare earth supply chain over the next years. The founders, Salt Lake City, Utah-based entrepreneurs, are experienced in establishing digital online media platforms as well as a series of other businesses across a range of industry. Both were fascinated by this unfolding topic.  Daniel O’Connor (opens in a new tab), a lawyer by training and an accomplished entrepreneur, is the founder of Headwaters Health Capital (opens in a new tab) and a geology and mineral enthusiast since the young age of 6 years old. Dustin Olsen (opens in a new tab) has worked with Daniel for several years now on the development of various digital assts, including TrialSite News (opens in a new tab).