In September 2022, the Pentagon quietly stopped taking delivery of new F-35 fighter jets. The reason was not a design flaw or a manufacturing defect. A single small magnet inside the plane's engine had been made using an alloy from China, which is banned under U.S. defense procurement law. Deliveries were halted until a national-security waiver was signed allowing the jets to be accepted anyway. It was a small incident with a big message: America's most advanced fighter runs on materials it does not fully control. Three years later, in July 2025, the Pentagon signed its largest-ever deal to fix that.

‍

What Rare Earths Actually Do Inside the Plane

Rare earths are a group of 17 metals with unusual magnetic, heat-resistant and optical properties. According to a detailed engineering audit by Adamas Intelligence, an F-35's rare earth content spans four main areas of use. Neodymium and praseodymium power the ultra-strong magnets used across the aircraft, from flight-control actuators to elements of the radar and targeting systems. Neodymium in particular underpins precision laser-targeting components, while praseodymium is used in communications and identification systems. Samarium, bonded with cobalt, makes the SmCo magnets used in the Honeywell integrated power package, where temperatures would demagnetize an ordinary NdFeB magnet. Dysprosium and terbium are doped into NdFeB alloys in small amounts to raise their heat resistance. Yttrium coats the F135 engine's turbine blades in a thin ceramic layer (yttria-stabilized zirconia) that protects the metal from extreme temperatures. Scandium is used to strengthen the aluminum alloys in advanced military aircraft, allowing airframes to be both light and durable under extreme flight conditions.

Six of those seven elements were placed on China's export restriction list on April 4, 2025.

‍

Why China Sits at the Center of Everything

Rare earths are not actually rare. They are found in many countries, including the United States. The difficulty is not digging them out of the ground, but separating and refining them into usable form. That refining stage is where China's grip is strongest. According to the International Energy Agency, China refined 91% of the world's magnet rare earths in 2024, and made 94% of finished rare earth magnets, meaning nearly all the world's supply passes through one country before it becomes anything useful.

The Pentagon is not a small customer. Sprott's April 2026 rare earths report, citing U.S. Commerce Department figures, notes that the Defense Department requires 3,000 to 4,000 tons of specialized magnets each year, and projects that number could reach 10,000 tons by 2030.

‍

A Dependency That Has Already Shown Up in Practice

Estimates of exactly how much rare earth material goes into each F-35 vary. The most widely cited figure, drawn from a 2012 Pentagon study, is around 920 pounds per aircraft. More recent analyses have suggested lower numbers, reflecting an ongoing debate about how it is counted. What isn't debated is that hundreds of pounds of specialized rare-earth material go into every airframe, and that the heat-resistant magnets they contain are among the hardest materials in the world to source outside China.

The 2022 F-35 incident showed how far down the supply chain the risk actually reaches. The Chinese-made alloy was not sourced by Lockheed Martin, or by the engine builder Honeywell, or even by Honeywell's supplier. It came from a supplier's supplier's supplier, several layers deep. The Pentagon signed a waiver to accept the finished jets anyway, but the message was clear: nobody in the chain fully knew where their materials came from.

‍

What Changed in 2025

On April 4, 2025, China's Ministry of Commerce added seven rare earths to its export control list, including several that are essential to the F-35's engine and radar magnets. The restrictions are not an outright ban, but they require special licenses to export, and in practice shipments slowed sharply while the licensing system was being set up. The rules also apply outside China: any product made anywhere in the world that contains more than 0.1% of the restricted Chinese-origin materials now needs a Chinese license to be exported.

The Pentagon's July response was structural. Alongside a $400 million equity investment in MP Materials, it guaranteed that the company will be paid at least $110 per kilogram for its key magnet ingredient (neodymium-praseodymium, or NdPr) for the next ten years. If the market price falls below that, the Pentagon pays MP the difference. If it rises above, the Pentagon shares in the upside. It also committed to buy 100% of the magnets made at MP's planned new factory in Fort Worth, Texas. That plant, per the Center on Global Energy Policy at Columbia, will add roughly 10,000 tonnes of magnet-making capacity when it opens in 2028, roughly the same as the Pentagon's projected annual need.

‍

The Policy Backdrop

On November 7, 2025, the U.S. Interior Department published its updated Critical Minerals List. For the first time, each of the 17 rare earths is listed individually rather than as a group, meaning each can now qualify separately for federal support. The same release noted that in 2024, the United States imported 80% of the rare earths it used.

‍

What to Watch Next

MP's new Texas factory is scheduled to open in 2028, at which point the Pentagon's price guarantee starts costing (or paying) real money. And U.S. defense contractors face a legal deadline of 2027 to remove Chinese-sourced rare earths from major weapon systems. Whether new production in the U.S., Australia and Malaysia can close that gap in time is a question the price floor cannot answer on its own. But for the first time in a generation, the Pentagon has put its balance sheet behind trying.

‍