The United States has already deployed many missiles and precision-guided munitions in an escalating conflict with Iran, spending billions of dollars on advanced military technologies in a matter of weeks. However, recent reports from both Chinese and Western sources indicate a concerning shortage of materials necessary for ongoing production of these weapons.
According to reports from reputable outlets, if supply disruptions worsen, the government warns that stockpiles of certain rare earth elements could dwindle in a matter of weeks or months. These elements are crucial for various military systems, including missile guidance, drone engines, radar systems, and fighter jet electronics.
“You can’t wage modern wars with outdated supply chains,” remarked Lipi Sternheim, CEO of Re-alloys. “Today’s weapons depend on materials that are hard to acquire, fabricate, and replace when supplies become limited.”
Re-alloys is one of the few companies working to reshape the North American supply chain for rare earth metals, converting rare earth oxides into metals and alloys that are needed by defense manufacturers.
Even without a direct military engagement with Iran, the situation remains critical for U.S. national defense and the broader defense industry. An estimated $5.6 billion has already been incurred in the initial days.
This issue has been ongoing for years. The U.S. has offshored much of its rare earth processing capabilities, allowing China to dominate crucial stages of the supply chain that turn raw materials into advanced metals and magnets. As it stands, many rare earth materials utilized in Western defense systems are processed in China. The Pentagon is now making efforts to eliminate this dependency ahead of a 2027 deadline that would prevent U.S. military systems from using Chinese-sourced rare earth magnets.
The deadline is already looming for some facilities like Re-alloys in Euclid, Ohio.
Re-establishing America’s rare earth production capacity is a vital goal. Mountain Pass, California, currently produces rare earth concentrates that must then be turned into NdPr oxides. While this step is significant in rebuilding North American capabilities, the oxide forms are not the metals usually needed by defense contractors.
To be useful, these oxides need to go through a chemical reduction process to become pure rare earth metals, which are then blended into alloys for high-performance permanent magnets.
For many years, the metallization processes required for this transformation have predominantly taken place in China. Even when rare earth ores are mined in the U.S. and turned into oxides domestically, the metallurgical processes are still conducted overseas.
REAlloys aims to address these challenges head-on.
At its Euclid facility, the company converts rare earth oxides into finished metals and magnet-grade alloys using high-temperature reduction and refining techniques. This is a critical step in the supply chain, providing the raw materials that magnet manufacturers and advanced industrial users rely upon.
Tim Johnston, co-founder of REAlloys, noted that “Metallization remains the weakest link in the value chain outside of China.” He added that achieving reliable metallization requires expertise and strict control over various factors during continuous production. This process is complex and can take several years to replicate effectively, presenting significant technical challenges.
The Euclid facility is already up and running, with efforts focused on processing rare earth oxides into metals and alloys domestically.
Furthermore, REAlloys owns the Hoidas Lake Rare Earth Project in Saskatchewan, securing access to primary resources in Canada.
The company has also signed a non-binding long-term agreement for future production from Tambreez in Greenland, one of the largest rare earth deposits outside China, in addition to supply agreements in Kazakhstan and Brazil.
“We have managed to overcome some significant hurdles and can now produce rare earth metallization and alloying domestically to meet industry standards,” claimed Johnston.
Moreover, Re-alloying aims to expand beyond metallization. The company has plans for large-scale production of neodymium iron boron (NdFeB) magnets in the U.S., with an initial goal of roughly 3,000 tons annually, scaling up to 18,000 tons.
If fully operational, this production level could provide magnets for about 1.5 to 2 million electric vehicles, numerous wind turbines, and significant quantities for industrial machinery, robotics, and medical devices. Defense systems also heavily depend on high-performance rare earth magnets.
This reliance extends across many contractors. For example, Lockheed Martin’s F-35 program needs hundreds of pounds of rare earth materials per aircraft for various systems. As the 2027 deadline approaches, efforts to diversify mineral sources are ramping up. Similarly, RTX Corporation and Kratos Defense & Security Solutions face similar pressures and are pivoting to U.S.-based rare earth suppliers.
The facility’s design integrates multiple stages of the rare earth value chain, which includes metallization, alloying, powder manufacturing, and final magnet production.
Once at full capacity, it may become one of the largest NdFeB magnet production sites outside Asia, a crucial move towards revamping the rare earth supply chain in North America.
With operations in Euclid, the U.S. rare earth supply chain is slowly knitting itself back together—just as the government gears up to block Chinese rare earth elements from its defense products by 2027.
