Key facts
- US demand for rare earth magnets is 48,000 tons annually, with domestic production at 300 tons.
- Pentagon supply chain rules for magnets take full effect January 1, 2027.
- China controls over 90% of global rare earth supply.
- REalloys is building a rare earth supply chain outside China, with processing in Saskatchewan and metal-making in Ohio.
- China's rare earth export truce with the US expires January 10.
The United States faces a significant deficit in rare earth magnets, with domestic production meeting only a fraction of its demand. Last year, the US required approximately 48,000 metric tons, while domestic sources supplied just 300 tons. This reliance on foreign supply, primarily China which produces over 90% of the world's output, is compounded by upcoming regulatory changes. Starting January 1, 2027, the Pentagon's Defense Federal Acquisition Regulation Supplement (DFARS) will mandate that all magnets used in defense contracts must have a supply chain entirely outside of China, Russia, Iran, or North Korea. This rule change, coupled with the potential expiration of a trade truce that has eased China's strict rare earth export rules, creates a critical supply challenge. China's rules, set to expire January 10, could again restrict exports to companies with ties to foreign militaries. REalloys is working to establish a non-Chinese supply chain, with processing in Saskatchewan and metal-making in Ohio, aiming to qualify North American rare earth materials for defense and industrial use.