US Firms Race to Break China’s Grip on Weapons Minerals
Tucked inside a New Hampshire office park, a small refinery zaps mining waste with electricity to tease out critical minerals needed for key US weapons systems, including missiles used in the Iran war. The company, Phoenix Tailings, recently received a $500 million loan from the Pentagon to ramp up its work, after starting out eight years ago as a backyard lab seeking a cleaner metal-refining method, according to AP News.
It is just the latest critical minerals company the US government has backed as Washington moves to break China’s chokehold on processing the elusive metals essential to advanced weapon systems. The push comes as the Iran conflict draws down key munitions such as Tomahawk cruise missiles and THAAD interceptors, and as President Donald Trump imposes stricter rules banning defense contractors from sourcing critical minerals from China.
The Race to Scale Up
Phoenix Tailings, based in the Boston-area city of Woburn, Massachusetts, uses electrolysis to extract critical minerals from mining waste, recycled magnets, and disk drives. The company plans to build a bigger facility to extract and produce critical metals needed in defense, aerospace, and automotive industries.
“We call it the freedom facility because, ultimately, the purpose of this is to ensure that the entire Western Hemisphere, the United States and its allies are free of Chinese influence within the rare-earth space,” said Anthony Balladon, chief commercial officer and co-founder of Phoenix Tailings, as Fortune reported.
The metals Phoenix Tailings refines play “an outsized role” in defense systems, Balladon said. A $150 million weapons system won’t work if it’s missing critical minerals that may be worth only $20,000 to $30,000.
The defense sector is particularly reliant on the metal samarium and needs 50 to 100 tons each year, but US capacity is very limited. Phoenix Tailings is among the few companies capable of producing the final metal, but its current capacity is only about 200 kilograms (440 pounds) a year. The company plans to scale up to about 5 tons in the next three months and reach its goal of 120-ton capacity by 2028.
“It will be a tall order and a challenge to replenish these stocks and scale up in the timeframe needed to meet defense demand and regulations,” Balladon said.
European Alternatives Emerge
Arnold Magnetic Technologies, a US magnet maker, for years relied on China for samarium to produce the extremely strong, stable-in-high-temperatures magnet that goes into precision-guided missiles such as Tomahawks. That no longer works. For Arnold, the solution has come from a relic of Europe’s past rare-earth industry: abandoned mining dirt in the French city of La Rochelle.
Solvay, a Belgium-headquartered chemical company, stopped separating and processing rare earths in the 2000s, when China was building up most of the world’s processing capacity. China weaponized that near-monopoly in April 2025 by choking off its flow of processed critical materials. Solvay then restarted work and has added other rare earths this year, including samarium.
“This ramp-up is driven by several factors: rapidly growing demand for permanent magnets, increased geopolitical focus on supply chain security, and strong customer demand in Europe and the United States for more diversified, resilient and traceable sources of supply,” a Solvay spokesperson said.
For Arnold Magnetic Technologies, paying more to get its supply from Solvay instead of China has not been a deal-breaker, because the samarium-cobalt magnets it makes account for only a small cost in a weapon system, said Matt Blake, Arnold’s CEO. “They are not the absolute cost drivers,” he said.
The surge in demand for such magnets has worked in the company’s favor, said Aaron Williams, Arnold’s chief commercial officer. “From our end, it’s a good opportunistic growth.”
The Tungsten Challenge
While progress is being made on rare earths, significant challenges remain, particularly for tungsten. The US is dependent on imports of the critical mineral, with China controlling roughly 80% of the global mine supply and an even larger share of processing, according to Brodie Sutherland, CEO of Patriot Critical Minerals Corp.
Sutherland, whose company seeks to explore and mine tungsten in the US, is concerned that America will not be able to get by without China-sourced tungsten after a Pentagon-imposed deadline of January 1, 2027. Efforts to ramp up US production will take years, he said, and in the meantime, the Pentagon and its defense contractors will need to rely on existing inventories, expanded recycling, and limited non-China sources.
The Iran War’s Toll on Munitions
The need to increase production has become more urgent as renewed fighting with Iran digs into the US military’s already diminished stockpiles of advanced missile interceptors. According to Defense News, the Center for Strategic and International Studies (CSIS) estimates the US has expended about 65% of its Patriot inventory, leaving fewer than 1,000 interceptors remaining. THAAD inventories have declined by about 38%, leaving an estimated 234 to 278 interceptors.
CSIS warned in May that it could take at least three years to replenish stockpiles of Tomahawks, Patriots, and THAADs. “There are no good alternatives to Patriot and THAAD for ballistic missile defense,” CSIS analysts Mark Cancian and Chris Park concluded in their analysis.
“It takes several years to produce a missile. If you put money into the system today, you wouldn’t get a missile for three or four years. Sometimes even five,” Cancian told the BBC. “What we’re getting now are missiles that were funded in 2023.”
The CSIS analysis on rare earth export restrictions one year later found that the Trump administration has committed over $7.3 billion in capital across five US government departments and agencies to accelerate rare earth supply chain development. In 2025, the US produced 8,900 tons of rare earth compounds and metals at Mountain Pass, California, but domestic production accounted for only one-third of US consumption.
Trump’s Executive Order and Industry Response
President Trump issued an executive order on July 20 requiring critical materials for military equipment to be sourced domestically or from allied nations. The order also curtails the Pentagon’s waiver authority should a contractor cite “non-availability” of a domestic source and criticizes defense contractors for failing to prioritize domestic production.
“It is the policy of the United States that not only the finished equipment deployed by our military, but also the critical materials and components necessary to manufacture, maintain, sustain, and repair that equipment, are sourced domestically or from allied nations,” the executive order states.
Lockheed Martin, which makes THAADs and many other weapons systems, said “we continuously assess the global rare earth supply chain to ensure access to critical materials that support our customers’ missions.” Several other major US defense contractors, including Raytheon Technologies and Northrop Grumman, did not respond to requests for comment.
What’s Next
The path to breaking China’s stranglehold on critical minerals is clear but long. As Stars and Stripes reported, the Iran war has consumed nearly 67% of the US Patriot interceptor stockpile, underscoring the urgency of rebuilding both munitions and the supply chains that produce them.
The US has formed critical minerals partnerships with Australia, Japan, Malaysia, Saudi Arabia, and others to build ex-China rare earth supply chains. But translating these partnerships and investments into actual production will take years.
Balladon remains confident in US companies’ ability to rise to the challenge. “Ultimately, with the right support and partners across the industry, we think we can make it happen,” he said.
The coming months will test whether the $7.3 billion in government commitments, the Pentagon’s tungsten deadline, and the urgency created by depleted munitions stockpiles can translate into meaningful domestic production capacity. As the India Today report notes, companies are racing to expand output, but much of the new mining capacity is still years away, putting immediate focus on refining material from mining waste and recycled products.
For now, the race is on — and the stakes could not be higher for US national security.