Rare Earth Elements & Critical Minerals — Deep Analysis¶
The Strategic Picture¶
China controls the inputs for the weapons the US is using to fight the war AND the chips powering the AI industry.
China's Dominance¶
| Dimension | China's Share |
|---|---|
| Mining | ~70% |
| Processing/refining | 90% |
| Heavy REE processing (Dy, Tb) | 98-99% |
| High-performance magnet manufacturing | 85-90% |
| Gallium production | 99% |
| Germanium production | ~83% |
| Cobalt refining | ~78% |
Export Controls (Active as of March 2026)¶
Seven medium-heavy REEs under control: samarium, gadolinium, terbium, dysprosium, lutetium, scandium, yttrium
Key restrictions: - Controls apply to products with 0.1% Chinese-origin input — captures global supply chains - Military end-user ban (Dec 1, 2025): companies affiliated with foreign militaries denied export licenses - Gallium/germanium suspension expires November 2026 — can reinstate instantly
Rare Earths in US/Israeli Weapons¶
| Weapon System | REE Content | Key Elements |
|---|---|---|
| Virginia-class submarine | 9,200 lbs | Dysprosium magnets |
| F-35 fighter jet | 900+ lbs | Dysprosium, terbium |
| Tomahawk cruise missile | Critical | Neodymium magnets (targeting) |
| JDAM | High-performance magnets | Guidance systems |
| Patriot | SmCo magnets | Guidance and control |
80,000+ individual defense parts depend on minerals under Chinese export controls.
2026 Price Impact (Hormuz Shipping Delays)¶
- Neodymium: projected $120-140/kg Q2 2026 (+15%)
- Dysprosium: $450-500/kg (significant increase)
Other Critical Minerals¶
Lithium¶
- Battery-grade carbonate: $24,086/metric ton (elevated)
- Hormuz blockade adds 1-2 month shipping delays
- EV demand: 58M vehicles (2024) → 235M by 2030
Cobalt¶
- China refines 78% globally
- DRC export quota: 96,600 MT (less than half of 2024's 220,000 MT)
- Battery cathode material scarce independent of Iran war
Copper¶
- Iran: 7th globally, Sarcheshmeh mine (world's 2nd-largest lode)
- Global deficit: 330,000 tonnes in 2026
- Smelting: 20-25% energy cost — directly hit by oil price spike
- Sulphur constraint: 24% of global supply from Gulf
Uranium¶
- US imports 95% of nuclear fuel
- Iran: 60% enrichment, 200+ kg HEU
- Natanz struck but no radioactive leakage
- Nuclear energy revival creates increased demand
Titanium¶
- Airbus: 60% from Russian VSMPO historically
- Boeing: up to 80% from VSMPO
- Qualification of new suppliers: >1 year
- No 2026 alternative sponge supply
Gallium/Germanium¶
- China: 99% / 83% of production
- Suspension expires November 27, 2026
- Military end-user clause remains active
- No long-term guarantees
Pentagon's 13 Critical Minerals (Requested March 1 — one day before strikes)¶
Arsenic, bismuth, gadolinium, germanium, graphite, hafnium, nickel, samarium, tungsten, vanadium, ytterbium, yttrium, zirconium
Award range: $100M-$500M+ per project. Signal: wartime resource mobilization.
Iran's Mineral Wealth¶
- 68 mineral types, 57B tonnes reserves, 6,000 active mines
- Valued at $27.3 trillion (2024)
- Zinc: world's largest reserves. Copper: 2nd largest deposits
- Post-war access = primary negotiating chip
Sources¶
CSIS, DHIT, Fortune, OilPrice, ASPI, West Point MWI, Discoveryalert, Mining.com — March 2026