Economically, we've grown used to globalization, where something can be made in one country, shipped to another for the next step, and end up on shelves or be used to build something elsewhere.
This is also true for rare earths, which may be mined in one country and processed in another.
The issue is that rare earths have become increasingly critical to numerous industries and defense applications. So, not having a reliable supply of rare earth minerals is more than a problem. It can be a threat to a nation's economic and national security.
This is why the U.S. is pushing to build a domestic rare earth supply chain.
It's about more than mining. It's about ensuring the U.S. can access the materials it needs to power key industries, strengthen national security, and compete in an increasingly strategic global market.
"Mine-to-magnet": How the U.S. is rebuilding its rare earth supply chain
The U.S. government's "mine-to-magnet" strategy is a series of efforts, spanning defense spending, industrial policy, trade measures, and government-backed investment that is focused on building a domestic rare earth supply chain.
In March 2024, the U.S. Department of Defense outlined a strategy to establish a sustainable domestic mine-to-magnet supply chain capable of meeting all U.S. defence requirements by 2027. Since then, the government has expanded its support for domestic mineral production through funding arrangements, investment, and measures designed to accelerate project development.
The objective is not simply to extract more rare earths. It is to develop the industrial capacity to turn those resources into materials and components that U.S. manufacturers can reliably access
Why the U.S. needs a reliable domestic rare earth supply chain
Currently, most of the mining and processing of rare earths has been concentrated in China.
This leaves the U.S. reliant on overseas suppliers for important parts of the supply chain of critical industries, including national defense.
For example, a F-35 fighter jet requires around 900 pounds of rare earth elements. A Virginia-class nuclear submarine requires around 9,200 pounds of rare earth elements. These are just two of the many important foundations of U.S. military strength and strategy that require rare earths to function.
Not only does America's reliance on foreign countries for the supply of both the supply of rare earths and the processing of them into finished goods lead to a risk that they could be cut off from these critical elements in a time of conflict, it also puts the U.S. at the mercy of foreign pricing power.
If, on the other hand, the U.S. can build a sovereign supply chain capable of supplying, processing, and refining rare earths, then it can be confident that it can continue to operate its defense strategy as well as ensure that the U.S. stays at the top of innovation given the amount of breakthroughs that require rare earths .
Tactical Resources and the U.S. rare earth opportunity
One company that is hoping to help the U.S. achieve this is Texas-based rare earth company Tactical Resources (Nasdaq:TREO) .
Through its Peak Project in Hudspeth County in West Texas, Tactical Resources is looking to recover rare earth elements from material stockpiled at the existing Sierra Blanca Quarry.
It's a novel approach.
Tactical is not looking at developing a conventional mine. Instead, it has secured approximately 1.5 million tons of previously mined and crushed material, with further access to stockpiled material covered by separate agreements.
This could offer a different path towards developing a domestic source of rare earth feedstock, using material that is already above ground and infrastructure that is already in place.
Tactical's challenge now is to turn this potential into a reliable source of rare earth materials that are produced in the U.S. and play a key part in the upstream part of America's mine-to-magnet strategy that focuses on sourcing and extracting rare earths as opposed to processing or using them to manufacture finished products, which are the other parts of the strategy.
About Tactical Resources
Tactical Resources (Nasdaq:TREO) is a Texas-based rare earth company focused on developing a domestic source of rare earth elements for the U.S. supply chain. Its flagship Peak Project, located in West Texas, aims to recover rare earth elements from material stockpiled at the existing Sierra Blanca Quarry.
Rather than developing a conventional mine, the company has secured approximately 1.5 million tons of previously mined and crushed material, with further access to stockpiled material covered by separate agreements. By using material that is already above ground and infrastructure that is already in place, Tactical Resources aims to contribute to the upstream part of America's mine-to-magnet strategy.
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Simply Wall St analyst Andrew Legget and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
