February 1942. Washington, D.C.

The memo was one page. Japan had just seized Malaya and the Dutch East Indies — the plantations that grew 90% of America's natural rubber. Every tire on every military truck ran on that rubber. Every gasket on every submarine. Every fuel line on every bomber.

President Roosevelt didn't wait for a study. He ordered the largest government-industry crash program since the Civil War: build a synthetic rubber industry from scratch. No factories existed. The chemistry barely worked at lab scale. Nobody had ever tried it at industrial volume.

Two years later, the United States was making 800,000 tons of synthetic rubber a year — more than the whole world had ever produced in natural form. An entire industry, created under pressure, because there was no other choice.

This month, Congress introduced the Magnets Value Chain Support Act of 2026. And the pressure looks familiar.

The bill comes from both sides of the aisle. Congressman John Moolenaar, a Republican from Michigan, and Congressman Ro Khanna, a Democrat from California, wrote it together. That alone tells you how serious the problem is. The Act offers tax credits at every step of the magnet supply chain — from rare earth oxide production to finished magnets to the motors and weapons that use them. It even covers rare-earth-free magnets, like the iron nitride technology Niron Magnetics is building in Minnesota.

The reason is a deadline. On January 1, 2027, new Pentagon rules take effect under DFARS. After that date, Chinese-origin rare earth magnets are banned from U.S. defense systems. Samarium-cobalt magnets. Neodymium-iron-boron magnets. Tungsten alloys. Any defense contractor that can't prove its materials are clean loses the contract.

That deadline is six months away. And the country still doesn't make enough magnets to fill the gap.

So money is moving fast. Phoenix Tailings received a conditional $500 million Pentagon loan last week to build a "Freedom Facility." USA Rare Earth is putting $1.2 billion into a magnet plant in Blacksburg, South Carolina. Ucore just signed a deal with Japan's Sumitomo to feed rare earths into its Louisiana refinery.

But writing checks and building factories are two different problems. China refines about 90% of the world's rare earths and makes most of the finished magnets. In 1942, the rubber program worked because America already had chemical plants, refineries, and trained workers ready to pivot. The rare earth supply chain barely exists at home. The January deadline is real. Whether American industry can build in six months what China spent thirty years perfecting — that is the question no one in Washington has answered yet.

Ucore Rare Metals and Japan's Sumitomo Corporation signed a deal on June 10 to build a rare earth supply chain across North America and allied markets. Sumitomo will distribute separated rare earths — especially the heavy ones that go into high-performance magnets — to buyers in Japan and beyond. Ucore plans to process the material at its Louisiana refinery using a technology called RapidSX, which separates rare earths faster and cheaper than most plants. The deal gives Ucore a buyer. It gives Japan another source for the metals China just cut off.

Washington asked Beijing this month to restart rare earth shipments to Japan. Japanese magnet and electronics makers are running low on heavy rare earths — dysprosium and terbium above all. China's answer was flat. Spokesman Lin Jian said China restricts dual-use exports to Japanese military users under Chinese law. The refusal matters because Japan's magnet factories feed supply chains that run through American defense, auto, and tech. When Japan can't get material, the ripple hits Detroit, the Pentagon, and Silicon Valley.

China's Rare Earth Industry Association reported its price index reached 260.9 on June 17. That's up about 70% from early-2024 lows, using 2010 as a base of 100. The number sounds clean. It's not. China's rare earth prices are set inside a system where the state controls mining quotas, export licenses, and refining capacity. What the index really measures is how much Beijing wants the world to pay. The gap between Chinese and Western prices tells the real story. Neodymium costs about $122 per kilogram inside China but $245 outside. As long as that gap stays wide, every factory outside China is paying a premium for the same metal.

Jack Lifton, Co-Chair, Critical Minerals Institute, InvestorNews
June 14, 2026

TERBIUM

Terbium is the reason your EV motor doesn't destroy its own magnets. A neodymium magnet is the strongest permanent magnet in the world. But heat it up — which is what happens inside an electric motor or a jet turbine — and it starts to weaken. Add terbium, and the magnet holds. That one property makes terbium essential to every high-performance magnet on the planet. EVs. Wind turbines. Guided missiles. The price tells the story. Terbium cost $668 per kilogram in 2020. Today it's $4,029 — up about 503% in six years. China refines roughly 90% of the world's supply. With the DFARS ban on Chinese magnets starting January 2027, this is the metal every defense contractor is racing to find.

Canadian Prime Minister Mark Carney offered Italian Prime Minister Giorgia Meloni priority access to Canadian rare earths, lithium, cobalt, nickel, and graphite during G7 talks in France last week. Canada is trying to position itself as Europe's go-to supplier for the metals it needs to cut ties with China.

— Canadian Mining Journal

Resouro Strategic Metals released a preliminary study for its Tiros project in Minas Gerais, Brazil. The numbers: a post-tax value of $714.9 million at an 8% discount rate, with a 44.2% rate of return. The deposit holds 1.4 billion tonnes in measured and indicated resources and would produce both titanium dioxide concentrate and a mixed rare earth carbonate.

— InvestorNews

The new Magnets Value Chain Support Act explicitly includes rare-earth-free permanent magnets in its tax credits. That makes Niron Magnetics — which is building a 1,500-ton-per-year iron nitride magnet factory in Sartell, Minnesota — eligible for federal support alongside traditional NdFeB producers.

— Rare Earth Exchanges

A new UN Trade and Development report says critical minerals trade risks fragmenting without stronger coordination. Lithium demand alone is projected to rise 353% by 2040. A handful of countries dominate reserves, mining, and refining — and the concentration is getting worse, not better.

— UNCTAD