In a move that underscores the intensifying rivalry between Washington and Beijing, the Pentagon has unveiled plans to purchase up to $1 billion worth of critical minerals, aiming to shore up domestic reserves and reduce the United States’ dependence on China for rare earth elements. The initiative, revealed through public filings from the Defense Logistics Agency (DLA) and reported by the Financial Times, comes as China tightens its grip on the global supply of metals essential to everything from smartphones to fighter jets.
The procurement drive, set in motion on October 12, 2025, is widely seen as a direct response to China’s sweeping export restrictions on rare earth metals and magnets—materials that are the backbone of modern defense and high-tech manufacturing. According to Caliber.Az, the Pentagon’s planned purchases include up to $500 million in cobalt, $245 million in antimony from US Antimony Corporation, $100 million in tantalum from an unnamed American producer, and $45 million in scandium from Rio Tinto and APL Engineered Materials, which has offices in Illinois, Japan, and China. The DLA, which already holds a $1.3 billion stockpile of alloys, metals, ores, and precious elements as of 2023, is now set to expand its reserves significantly.
This escalation is no mere bureaucratic shuffle. As a former US defense official told the Financial Times, Washington’s push to build mineral reserves is “deliberate and expansive.” The $1 billion target represents a sharp escalation from previous stockpile efforts, signaling a new urgency in US strategy. The Trump administration’s accelerated initiative is part of a broader effort to bolster the National Strategic Stockpile, especially after Beijing’s latest move to tighten export curbs on materials vital for defense and technology manufacturing.
Industry voices have welcomed the Pentagon’s approach. “This shows that the US government recognizes the importance of these materials and wants to support any domestic production,” an industry representative told the Financial Times. The sentiment is echoed across the Western industrial sector, where concerns have mounted over the reliability of supply chains in the face of rising geopolitical tensions.
Those concerns are hardly theoretical. The price of germanium, a key semiconductor material, has soared in 2025 due to a steep decline in Chinese exports, causing alarm among Western traders. The cost of antimony trioxide, another crucial mineral, has nearly doubled in the past year, while automakers have struggled with shortages of rare earth metals—all consequences of China’s tightening export regime. According to Bloomberg, China has already imposed similar restrictions on gallium, germanium, graphite, and antimony, further exacerbating global supply anxieties.
The backdrop to these moves is a rapidly deteriorating relationship between the world’s two largest economies. In April 2025, China announced restrictions on exports of rare earth metals after US President Donald Trump imposed new tariffs on Chinese goods. The latest round of export controls, announced by China’s Ministry of Commerce ahead of a planned meeting between President Trump and Chinese leader Xi Jinping, marked the most stringent yet—restricting even products with trace amounts of Chinese content and targeting magnets used in the defense industry.
The diplomatic fallout was swift. In response to China’s export restrictions, President Trump canceled his scheduled meeting with Xi Jinping and announced an additional 100% tariff on Chinese imports. “China cannot be allowed to hold the world captive,” Trump posted on Truth Social, reflecting a hardening US stance on the issue.
Rare earth elements—such as neodymium, samarium, and dysprosium—are indispensable to the modern arsenal. The F-35 fighter jet alone uses roughly 920 pounds of rare earth materials per unit, while satellites, guided missiles, and submarines all rely on high-performance magnets forged from these metals. The Pentagon’s procurement strategy addresses a critical gap: at its Cold War peak, the National Defense Stockpile held an inflation-adjusted $42 billion in critical reserves, but today, it is valued at under $1 billion and lacks the quantities needed for rapid defense production.
To address this vulnerability, the Trump administration has invoked the Defense Production Act, investing $540 million to support a critical minerals and rare earth supply chain in the US and among allied nations. In a landmark move, the Defense Department became the largest shareholder in rare-earth mining company MP Materials by purchasing $400 million of its stock and facilitating the construction of a new processing facility intended to sidestep the Chinese market. The deal includes a minimum price guarantee of $110 per kilogram for neodymium-praseodymium oxide that is stockpiled or sold by MP Materials for the next decade.
Despite these efforts, America’s dependence on foreign sources remains acute. Between 2020 and 2023, 70% of US imports of rare earth compounds and metals came from China, according to the US Geological Survey. Globally, China accounts for nearly 70% of rare earth mining and controls roughly 90% of processing capacity, giving Beijing considerable leverage in trade negotiations and supply chain management.
Western governments have only recently begun to create full-scale reserves of strategic minerals, but the urgency is growing. The Pentagon’s latest initiative is a clear signal that the United States is intent on closing the gap. The DLA’s stockpile, already worth $1.3 billion, is set to expand with the new purchases, which are expected to include not only direct procurement but also investments in domestic mining and processing capabilities.
The stakes are high, not just for defense manufacturers but for the broader US economy. Critical minerals are essential to the production of electric cars, semiconductors, and a host of other high-tech goods. Shortages or price spikes in these markets can ripple through the economy, affecting everything from consumer electronics to national security.
For now, the Pentagon’s procurement drive is being watched closely by industry leaders, policymakers, and international observers alike. The outcome could reshape global supply chains and redefine the balance of power in the high-stakes world of strategic minerals. As the United States races to build its mineral stockpile, the world will be watching to see whether Washington can break free from Beijing’s grip—or whether China’s dominance will continue to shape the future of technology and defense for years to come.
