President Donald Trump's initiative to rebuild the U.S. rare earth supply chain has reached a significant milestone as the U.S. Army forms a partnership with industry players, including REalloys, to expand North American processing capacity for heavy rare earth elements such as dysprosium and terbium, which are critical for advanced military hardware like fighter jets, missiles, submarines, and drones [1]. REalloys CEO Leonard "Lipi" Sternheim emphasized that while rare earth deposits are globally distributed, China has maintained a monopoly over the processing, refining, and magnet-making stages of the supply chain for decades [1].
Rep. Ro Khanna, D-Calif., underscored the strategic importance of breaking China's dominance, stating, "There's no way China should hold this monopoly with rare earths" [1]. Sternheim explained that REalloys is working to establish the entire supply chain in North America, focusing on the complex technologies required for processing and refining, rather than just mining the raw materials [1].
A key development is the upcoming federal procurement requirement set to take effect on January 1, 2027, which will restrict the use of products with a Chinese nexus in the defense industrial base, thereby accelerating the shift toward domestic sourcing [1]. Sternheim highlighted that the U.S. Army's partnership with REalloys is crucial for national security, as it aims to ensure that critical defense materials are sourced domestically and not from geopolitical rivals [1].
Looking forward, Sternheim acknowledged that expanding domestic capacity will require time but expressed confidence that the U.S. and its partners will achieve significant progress in the coming years [1].
CONCLUSION
The U.S. Army's partnership with REalloys marks a pivotal step in reducing reliance on China for critical defense metals. With new federal procurement rules on the horizon and a focus on rebuilding domestic processing expertise, the U.S. is poised to strengthen its supply chain security for advanced military technologies.