Beyond Oil: War Metals Are China’s Most Powerful Weapon

Most people have never heard of terbium oxide. 

Don’t beat yourself up too hard if you haven’t. However, this heavy rare earth element plays a key role in military technology. Terbium is blended into neodymium-iron-boron magnets that enhance temperature resilience, allowing guidance and radar systems to operate smoothly. 

On the F-35, terbium is a key component used in the plane’s flight control and advanced targeting systems. 

Back in early 2010, a kilogram of terbium oxide traded for just $40. 

By the end of 2011, the price of terbium oxide soared to $2,820 per kilogram as China unofficially restricted rare earth exports to Japan. 

Just think about that kind of price spike — all for a metal few people have ever heard of, yet is essential for defense technology. 

China has proved time and again that if wielded correctly, rare earths are the most powerful weapon it has in the country’s arsenal. 

Now fast forward to January, 2026, when Beijing fired another salvo of its rare earth ammunition. After Japanese Prime Minister Takaichi made a few comments about defending Taiwan, China announced export restrictions on dual-use items to Japan — including seven heavy rare earth elements and all related magnets.

In one fell swoop, Japan lost 60% of its rare earths supply. Export permits slowed soon after and prices jumped as automakers faced supply constraints.

Yet, this pattern repeats itself because the underlying monopoly persists: China controls approximately 90% of global rare earth processing and 98-99% of heavy rare earth separation capacity!

There’s no getting around that fact, dear reader. 

But there’s a little catch when it comes to rare earths — they aren’t actually rare.

We have massive deposits of them here in the United States. However, what’s rare is the processing infrastructure to turn ore into usable materials — the separation facilities, refineries, and magnet manufacturing that China spent 30 years building which America outsourced.

Now President Trump is betting he can rebuild that capacity before China weaponizes it against us in the same way it’s doing to Japan right now. 

His goal is more than simple self-sufficiency, too. 

President Trump’s true end-game is breaking China’s stranglehold before the next round of export restrictions hits American manufacturers instead of Japanese ones.

Beyond Oil: War Metals Are China’s Most Powerful Weapon

Look, every electric vehicle motor requires neodymium-iron-boron magnets enhanced with dysprosium and terbium for high-temperature stability. 

Every wind turbine relies on similar permanent magnets to generate electricity efficiently, and every F-35 fighter jet uses approximately 920 pounds of rare earths in its actuators, sensors, radar systems, and targeting equipment.

The global demand for these materials is projected to nearly triple over the next five to ten years, and potentially grow 10x by 2050 as electrification, defense modernization, and advanced manufacturing accelerate simultaneously.

Always keep in mind that China doesn’t just mine these elements, folks… They refine them. 

Today, around 70% of global rare earth mining happens in China, Myanmar, and Australia. 

However, approximately 90% of rare earth processing — the separation, refinement, and metallization that transforms ore into usable materials — happens in China.

For heavy rare earths like dysprosium and terbium, China’s dominance is more like 99%. 

There’s essentially no alternative processing capacity outside China that operates at commercial scale.

That’s the chokepoint.

MP Materials mines rare earths at Mountain Pass, California — the only significant U.S. rare earth operation. They produce concentrates domestically, which get shipped right to China for separation because America lacks the processing infrastructure.

Then, we buy back the refined materials — at Chinese prices, on Chinese terms, and of course, subject to Chinese export policy.

Believe me, this isn’t an accident. 

China flooded global markets with cheap processed rare earths throughout the 2010s, driving prices so low that Western processors couldn’t compete. 

Molycorp, the company operating Mountain Pass, filed for bankruptcy in 2015. Processing facilities in the United States, Australia, and Europe soon shut down or scaled back operations.

Meanwhile, Beijing bought foreign rare earth assets when production appeared to increase abroad. After overwhelming competitors with lower prices, certain companies found continued production unprofitable and eventually sold to Chinese buyers.

The result was direct — vertical integration across the entire supply chain from mining through magnet manufacturing, concentrated in facilities Beijing controls directly or indirectly through state-owned enterprises.

China now consumes approximately 60% of its own rare earth production domestically for electric vehicles, wind turbines, electronics, and robotics manufacturing. 

Although that does mean their ability to export has limits — those limits also mean China prioritizes domestic supply over foreign customers when push comes to shove.

Last January proved to us exactly how that works.

One little comment from Japan’s Prime Minister had major ramifications as China’s Ministry of Commerce quickly placed export restrictions on dual-use items to Japan, specifically targeting rare earth elements and magnets.

We’re talking about key war metals such as samarium, gadolinium, terbium, dysprosium, lutetium, and all related compounds, metals, and permanent magnets.

Export licensing reviews slowed or halted practically overnight, and rare earth permanent magnet shipments to Japan dropped sharply over the next two months. 

The impact hit automotive supply chains first. 

Japanese automakers like Toyota, Honda, and Subaru depend on rare earth magnets for electric vehicle motors. Proterial, Shin-Etsu Chemical, and TDK — major magnet manufacturers — source neodymium, praseodymium, dysprosium, and terbium from Chinese suppliers.

Magnet availability tightened as prices soared, forcing production schedules to adjust.

Defense contractors faced similar constraints… 

Japan has been expanding military capabilities and increasing defense budgets in response to regional tensions. Advanced weapons systems, radar equipment, and guidance systems all require rare earth magnets and materials that trace back to Chinese processing facilities.

As you now know, China has used this playbook before when it restricted rare earth exports back in 2010. The embargo lasted weeks officially but supply disruptions persisted for months.

Here in the U.S., we have no comparable strategic reserves of processed rare earths, nor do we have emergency stockpiles of critical magnets. 

Backup processing capacity that operates at commercial scale? Forget it. 

Every supply chain that touches rare earths runs through China — and Beijing has demonstrated repeatedly that access depends on geopolitical alignment.

It’s about time that changed, isn’t it?

The Rare Earth Chokehold Trump is Breaking

Nobody should be shocked to see President Trump aggressively developing our domestic mining sector. 

This week’s approval of the Resolution Copper project in Arizona is clear proof of this counterstrategy.

Why? Well, Resolution Copper is an underground mine 60 miles east of Phoenix that’ll create 1,450 jobs and produce copper essential for electric vehicles, renewable energy systems, defense technologies, and grid infrastructure. 

This project alone unlocks $149 million in annual wages, and up to $120 million yearly in state and local tax revenue.

But here’s the thing — copper is just the start.

Trump’s Executive Orders thus far have expanded the critical minerals list from 35 elements in 2018, to roughly 60 by late last year. Newly designated critical minerals include copper, uranium, silver, potash, boron, phosphate, lead, rhenium, silicon, and metallurgical coal.

And it’s that designation which unlocks FAST-41 fast-tracked permitting, federal funding opportunities, and priority treatment for land use decisions on federal property.

Now we have multiple rare earth and critical mineral projects moving through accelerated timelines:

• Twin Metals copper-nickel-cobalt mine in Minnesota — targeting materials essential for battery production and defense applications.

• Perpetua Resources’ Stibnite gold-antimony mine in Idaho — reopening the former largest U.S. antimony producer after China banned antimony exports to the United States in 2024.

• USA Rare Earth’s Texas facility developing heavy rare earths, gallium, and beryllium deposits.

But again, the key challenge isn’t just mining, but also processing these war metals. 

Separation facilities that can refine rare earth concentrates into individual pure elements require technological sophistication few countries have scaled commercially. Counter-current solvent extraction — the industry standard — achieves recovery rates in excess of 95% in Chinese facilities, versus 80-85% in older Western installations.

Rebuilding that capacity could take at least 5 years for construction timelines, plus permitting processes even under fast-track procedures.

But I want you to look beyond simply the players that are going after critical minerals, because the truth is that the operators best positioned to capitalize will be the ones holding a dual-edged advantage — rare earth and critical mineral assets combined with gold production.

With gold holding above $5,000 per ounce right now, precious metals cash flow can be an easy way for these miners to fund capital-intensive processing infrastructure and mining development, without relying entirely on federal support or dilutive equity financing.

It’s that combination of strategic mineral deposits and self-funding gold operations that’ll create growth potential independent of China’s export policy decisions.

And you can bet that the timeline matters…

China’s domestic rare earth consumption is growing. Their ability to flood global markets the way they did a decade ago is shrinking because they need more supply internally.

Trump’s bet is straightforward — rebuild domestic processing before the next export restriction targets U.S. supply chains like the way it’s hurting Japan today. 

If you want to take advantage of this situation, I’d start right here.