Vertical integration of rare Earth elements for US autonomous dominion

This essay is part of the Pathfinder series, a coproduction between Breaking Defense and the Center for a New American Security. Click here to find out more.

America’s national security is imperiled by its dependence on China for the rare earth elements (REEs) essential to artificial intelligence (AI), autonomous systems, and precision-guided weapons. Without secure access to refined REEs, even the most sophisticated algorithms and defense platforms become inoperable.

China’s dominance across the REE supply chain­ — from supply to mining to refining — creates a single point of failure for US military readiness. In a crisis, Beijing could weaponize these choke points, halting production of the AI-enabled drones, electronic warfare systems, and missiles that underpin US deterrence in theaters from the Middle East to the Indo-Pacific.

Rebuilding A Domestic Supply Chain

Washington should treat REEs not as commercial commodities but as strategic national assets. A bipartisan path forward lies in the vertical integration within US borders of domestic mining, separation, refining, and magnet alloying capacity. MP Materials’ operations in California offer a prototype for such an effort.

Based in Las Vegas, MP Materials owns and operates the Mountain Pass mine in California, the only active rare earth mine and processing site in North America. According to company analysts, MP is working to expand its capacity downstream to domestically produce separated oxides and permanent magnets. It recently struck a major public–private partnership with the Department of Defense (DoD) to accelerate the construction of a completely domestic US rare earth magnet supply chain. This 10X Facility will help ensure domestic magnet manufacturing, expand heavy rare earth separation, and establish long-term price floor guarantees that reinforce US independence in the REE chain.

Under the agreement, the DoD becomes MP’s largest shareholder, commits to a 10-year price floor, and agrees to purchase all magnets for defense and commercial use from the new facility. MP’s recent statements emphasize that the company has invested nearly $1 billion to reindustrialize the full rare earth supply chain, completely ceasing exports of concentrate to China and accelerating downstream operations to the American military and US private companies.

The Next Phase Of Resilience For MP Materials

MP’s expansion also highlights a key risk. Without policy support for refinement and magnet production, the United States might only reshore upstream mining or, worse, extract raw concentrate and ship it abroad to adversarial companies, leaving the United States vulnerable to foreign control over the most critical stages of the supply chain. MP’s ambition demonstrates how domestic investment can rebuild an end-to-end rare earth supply chain vital to US technological and national security competitiveness, but only if the government treats MP Materials as a model to replicate rather than a standalone venture.

Congress should support MP Materials and similar firms by extending federal assistance beyond mining to include magnet fabrication, offtake procurement, and integration with defense manufacturing. Additionally, pairing MP’s scaling capacity with national labs and university consortia can create a Manhattan Project for magnets that could counter China’s head start in the field.

From Materials To Military Innovation

America’s long-term security depends not only on a vertically integrated REE chain, but also on transforming them into battlefield innovation. Even with a stable domestic supply, the United States risks falling behind adversaries that can rapidly field new REE-based systems. The war in Ukraine illustrates an opportunity. Russia’s initial armored advances were blunted not by high-end Western munitions but by fleets of jury-rigged drones, prototyped in small workshops and refined by frontline feedback. Ukraine’s defense innovation ecosystem has embraced grassroots drone development, open collaboration, and rapid iteration, underscoring the need for the United States to pair its material advantages with similar agility in design and deployment.

US military culture and acquisition, by contrast, remain locked in decades-old procurement practices that stifle experimentation. The only way to break free is to institutionalize rapid development for drone and autonomous systems innovation and create, in essence, an industry that blends openness, private sector competition, live battlefield feedback, and modular architecture. Such a reimagined development cycle should maintain a public design repository under permissive licensing so that vetted US startups and allied teams can propose, test, and evolve designs. Additionally, placing embedded liaisons with frontline units and operators to field-test and iterate designs in real environments would ensure ingenuity for this next phase of warfare.

A Bipartisan Strategy For Security And Renewal

A completely domestic industrial base of REEs able to mass-produce drones at scale, coupled with an adaptive design culture, would ensure dominance and security for decades to come. Politically, both prongs offer bipartisan appeal. Democrats can frame vertical integration as green industrial policy, as American plants reduce toxic refining abroad, create union jobs, and strengthen supply chains for both defense and clean energy. Republicans can emphasize insulating America from Beijing’s leverage to reduce the risk of wartime shortages and reinforce US technological sovereignty.

Skeptics may contend that subsidizing the domestic rare earth supply chain constitutes corporate welfare, while the rapid fielding of autonomous systems borders on reckless adventurism. Yet the alternative of the United States depending on adversaries for critical inputs and procurement cycles that can easily be shut off is just as risky. Just as Congress once recognized aerospace and nuclear power as inherently strategic industries worthy of public investment and rapid development, it must now do the same for rare earth supply chains and autonomous systems.

US policymakers must act now so that when the next generation of autonomous drones takes flight in a future conflict, every magnet in their motors, every alloy in their rotors, and every line of code is anchored in expedient American innovation. These reforms can offer a bipartisan strategy that ties economic renewal in rare earth elements to military adaptation.

Kevin Chen is a former data scientist and intelligence analyst currently pursuing a master’s degree in public policy at the Yale Jackson School of Global Affairs. Chen has over three years of experience in the US intelligence community applying AI/machine learning to national security challenges. He now focuses on AI governance, US-China technological competition, and the intersection of emerging technology and global affairs at Yale. Chen graduated from Dartmouth College in 2022 with a BA in data science. He is from Knoxville, Tennessee, and is fluent in Mandarin Chinese.