Securing Neodymium Is A Strategic Imperative For America

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China recognized the strategic importance of NdFeB magnets years ago. In 2016, the Ministry of Industry and Information Technology, along with other central agencies, designated high-performance magnet as a“key strategic material” in the New Materials Industry Development Guide. High performance NdFeB magnet was specifically mentioned in 2021 when the material was again prioritized in the Key New Materials First Batch Application Demonstration Guide.

These directives provided the foundation for a comprehensive industrial policy focused on research, development, and scaled production of high-performance magnets.

By 2022, China had produced over 230,000 tons of sintered NdFeB magnets. However, only 64,000 tons met high-performance thresholds, underscoring the push not just for quantity but also quality.

Industry leaders such as JL MAG and Ningbo Yunsheng are at the forefront of this growth. JL MAG, one of the biggest rare-earth magnet producers in China, expanded from 23,000 tons in early 2024 and aims to reach 40,000 tons by 2025. Ningbo Yunsheng is developing an additional 15,000-ton smart manufacturing facility in Baotou, one of China's rare-earth hubs.

National and provincial policies further reinforce this trajectory. The 2022-2030 Carbon Neutrality Implementation Plan prioritizes rare-earth-based motors in EVs, wind turbines, hydrogen systems, and robotics. Local initiatives in Sichuan and Zhejiang promote R&D in high-end applications and support the development of magnets that minimize or eliminate heavy rare earths.

Meanwhile, the United States is playing catch-up. MP Materials, the only significant rare-earth mining and processing firm in the US, achieved record production of 1,300 tons of NdPr oxide. However, compared to China's estimated 300,000-ton production by 2024, the scale gap remains daunting.

The US government has recently responded with strategic investments. The Department of Defense committed $400 million to support domestic magnet production, establishing long-term purchase agreements and price floors to stabilize the market.

Apple also pledged $500 million to purchase rare-earth magnets from MP Materials, starting in 2027.

However, these efforts, while promising, are still years away from significantly reducing US dependence on Chinese supply chains.

This is more than a trade imbalance; it is a national security risk. Rare-earth magnets are central to everything from drones to missile guidance systems. The fact that the United States, despite its technological prowess, relies almost entirely on a single foreign supplier for such a critical input is a glaring vulnerability.

China's leverage is more than theoretical. In April 2025, it halted exports of heavy rare earths and associated magnets as a retaliatory measure against new US tariffs. Companies like Tesla are already reporting disruptions. Each robotic joint that goes unbuilt due to a lack of rare-earth magnets underscores the real-world impact of these supply constraints.

The risk is systemic. China currently controls over 90% of the global production of heavy rare-earth magnets. Japan produces the remainder but still depends on Chinese raw materials. And while recent trade negotiations appear to have loosened some restrictions, the precedent is clear: China can, and will, use export controls as weapons and leverages when it suits its interests.

The United States must act decisively. Scaling domestic production is essential but insufficient on its own. The US must also collaborate with allies like Japan to establish a strategic reserve for rare-earth magnets.