September 7, 2022. The Pentagon.

The Department of Defense halted deliveries of the F-35 Lightning II — the most expensive weapons program in U.S. history — because Honeywell had disclosed that a magnet inside the aircraft's turbomachine was made with a samarium-cobalt alloy that came from China.

The magnet itself was small. The supplier was fifth-tier. Bill LaPlante, the Pentagon's chief weapons buyer, told reporters two days later that one Lockheed Martin executive had recently discovered his company had 3,000 suppliers — not the 300 he thought he had. Somewhere, deep in the chain, somebody had bought SmCo from China without anyone noticing.

It took a month for LaPlante to sign a national security waiver to restart deliveries — a waiver covering 126 already-built F-35s. The 841 aircraft already delivered contained the same Chinese-origin magnets. The Pentagon decided they posed no safety-of-flight or information risk and did not recall any of them.

A congressional aide later told Rare Earth Exchanges that the incident was "a Sputnik moment for a lot of us." It became the trigger for nearly every piece of US rare earth policy that followed.

Congress responded. The FY2024 National Defense Authorization Act, signed in December 2023, set a hard deadline: January 1, 2027. After that date, no weapons system procured under federal contracts can contain rare earth magnets — neodymium-iron-boron or samarium-cobalt — that were mined, refined, separated, melted, or fabricated in China, Russia, Iran, or North Korea.

That deadline is now 211 days away.

This week's news is the speed of the buildout. On Tuesday, USA Rare Earth announced a $1.2 billion magnet plant in Cherokee County, South Carolina — 6,400 tons per year of sintered NdFeB magnets, commissioning April 2028. The Department of Energy committed $134 million to two rare-earth-from-waste projects in Louisiana and Oklahoma. The Pentagon's Defense Logistics Agency on May 26 awarded two parallel sole-source contracts — to E-VAC Magnetics in South Carolina and Noveon Magnetics in Texas — for $12.9 million each. Sole-source because those are the only two NdFeB magnet producers in the United States.

Almost everything else under construction — MP Materials' Northlake, Texas campus, USA Rare Earth's Round Top mine, the Carester separation plant in Lacq, France — will not reach commercial output until late 2027 or 2028.

The U.S. makes 0.3% of the world's NdFeB magnets today. China makes about 94%. The Pentagon is going to need a lot of waivers.

USA Rare Earth (NASDAQ: USAR) announced Tuesday that it will invest $1.2 billion to build a sintered NdFeB magnet plant in Bailey Industrial Park, Blacksburg, South Carolina. The Cherokee County facility will produce 6,400 metric tons per year of permanent magnets and 5,000 metric tons of refined rare earth metals, with commissioning targeted for April 2028. About 490 manufacturing jobs are expected. Starting wages: $24.50 an hour. South Carolina will provide $25,000 in income tax credits per new job. USAR has now committed to major investments at three sites in five months — Stillwater Oklahoma (commissioned March 2026), LCM Europe's alloy plant at Lacq, France (€175 million+ through 2030), and now Blacksburg. The combined US capacity goal: 10,000 metric tons per year of magnets and metals.

On May 26, the Defense Logistics Agency awarded two parallel sole-source contracts for NdFeB magnet blocks for every branch of the U.S. military. E-VAC Magnetics in Sumter, South Carolina received $12,895,550. Noveon Magnetics in San Marcos, Texas received $12,894,620. The contracts run through May 2027. Both were awarded under 10 U.S. Code §3204(a)(3)(A), the legal provision used when only one responsible source exists. The Pentagon bypassed competitive bidding because there were no other US suppliers to bid. The total — nearly $26 million split between the only two domestic NdFeB magnet producers — is the most direct evidence yet of how thin US capacity actually is.

The Department of Energy committed $134 million Tuesday to two projects extracting rare earths from waste streams. About $67 million goes to a Colorado School of Mines and ElementUSA project in Louisiana that will pull rare earths from bauxite waste — the residue left over from aluminum production. The target is 150 to 1,000 metric tons of rare earths per year at commercial scale. The other $67 million goes to Phoenix Tailings and MIT in Oklahoma, which will turn industrial waste into high-purity rare earth metals. Bauxite waste is one of the largest unexploited rare earth resources on US soil. If the chemistry holds at industrial scale, it changes the upstream side of every U.S. magnet supply chain calculation.

Darryl Cuzzubbo, Managing Director of Arafura Rare Earths
June 2, 2026

YTTRIUM

Yttrium is the Y in YAG — yttrium aluminum garnet — the synthetic crystal in laser rangefinders on every modern artillery system. It is also the Y in Y₂O₃, the yttria that lets a turbine blade in a jet engine combustor run at 1,400°C without melting. China refined roughly 95% of the world's yttrium in 2024. When Beijing rolled out its first wave of export controls in April 2025, yttrium was on the list. Shipments to the US fell to about 42% of pre-restriction levels. The Trump-Xi May readout specifically named yttrium as a material China would "address" — without specifying volumes, timing, or licensing relief.

The China Rare Earth Industry Association's official price index settled at 249.4 on June 1, 2026 — roughly 2.5 times the 2010 baseline. The number has eased from a 2026 peak above 300 but remains historically elevated. Rare Earth Exchanges analysts note the index is not a market-clearing price; it is a managed indicator inside a state-influenced system shaped by mining quotas, export controls, and strategic stockpiling. NdPr metal inside China is now trading close to the $110-per-kilogram floor set by the MP Materials–DoD agreement.

— Rare Earth Exchanges

Arafura Rare Earths (ASX: ARU) approved final investment decision in May on its $1.9 billion Nolans NdPr project in the Northern Territory. Financing comes from nine lenders in five countries — most of them government-backed export credit agencies and development banks. At full production, Nolans will produce 4,440 metric tons per year of NdPr oxide. Together with Lynas (~6,600 t/yr) and Iluka's planned Eneabba refinery (5,500 t/yr), Australia is on track to host the only ex-China cluster of three NdPr producers at scale.

— Arafura Rare Earths

Critical Metals Corp (NASDAQ: CRML) announced Tuesday it is accelerating field operations at its Tanbreez heavy rare earth project in southern Greenland. The pilot plant headquarters and warehouse are targeted for August 2026 completion. Additional drill rigs are mobilizing to expand resource drilling. A bulk sample program has begun to provide pilot plant feedstock. Tanbreez is one of the world's largest known deposits of dysprosium and terbium, with REalloys holding a 15-year offtake for 15% of Phase 1 production.

— Critical Metals Corp

Evolution Metals & Technologies (NASDAQ: EMAT) announced binding purchase orders with ULVAC Korea in May to scale its Korean rare earth magnet production capacity to 10,000 metric tons per year by November 2026 — about two months ahead of the Pentagon's January 2027 ban on Chinese-origin magnets in defense supply chains. The Korea capacity is 1.5 times the size of USA Rare Earth's planned Cherokee County facility and will come online roughly a year and a half earlier.

— Evolution Metals & Technologies