I can't stop thinking about this.
There's a plane the Air Force builds called the F-35. It's the most expensive weapon America has ever made. Each one needs 920 pounds of rare earth metals to fly. The engines. The radar. The targeting system. Nine hundred and twenty pounds of stuff that comes, for the most part, from one country.
That country is China.
Here's what worries me. We don't make most of this stuff here. We haven't for years. China controls about 90% of the world's supply of the magnets that go inside our jets, our submarines, our missiles, and almost every electric car on the road. Not 50%. Not 70%. Ninety. If Beijing wakes up one morning and decides to turn off the tap, we can't build new weapons. We can barely build new cars.
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I don't think most people realize how close to the edge we've been running.
But something happened yesterday that matters.
A small company called USA Rare Earth — ticker USAR, if you want to look it up — announced a $2.8 billion deal to buy a mine. The mine is in Brazil. It's in a state called Goiás, in a dusty patch of red earth near a town most of us will never see. The mine is called Pela Ema. And it happens to be the only working mine outside of Asia that pulls all four of the magnetic metals the Pentagon needs out of the ground.
One mine. In one country. Holding up the whole thing.
The White House backed the deal. The Department of War — that's the new name for the Pentagon, if you hadn't heard — already locked in a 15-year contract for every ounce the mine produces in its first phase. And here's the part that got my attention. The government put a price floor under it. If the market drops, Washington pays the difference. That's not a trade. That's a promise.
By 2027, that one mine in Brazil is expected to produce more than half of all the heavy rare earths made outside of China. Half. From one hole in the ground.
The stock jumped 13% in a single day.
A bigger company called MP Materials jumped 8.5%. You might not know the name, but you should. MP runs the only rare earth mine in the United States, out in the California desert. Last summer, the Pentagon bought a chunk of it. The government is now the single largest shareholder. The U.S. Treasury owns a bigger piece of that company than any hedge fund does. That's not something I ever expected to write.
I get it. This stuff is boring on the surface. Rocks. Magnets. Dirt. Nobody wants to read about dirt.
But this isn't a story about dirt. It isn't a green energy story, either. And it isn't about your Tesla.
It's about the fact that the most powerful military on earth cannot build its own weapons without asking permission from Beijing. That's the truth. A general in Washington has to hope a clerk in China signs a form. For years, no one did much about it. The mines here got shut down. The processing plants got shut down. The knowledge walked out the door. And China filled the gap. On purpose. Patiently. For thirty years.
Now Washington is finally writing checks. Quietly. Fast. One deal, then another. A mine in California. A mine in Brazil. A plant in Oklahoma. Price floors. Long contracts. Government shares. Every week there's a new announcement. Most people don't see it.
Nine hundred and twenty pounds. That's the number I keep coming back to. The weight of a small car, baked into every F-35 that flies off the line. And most of it, still, comes from a country that might one day be on the other side of a war.
Nobody knows how this ends. Nobody knows if these new mines will come online in time. Nobody knows if China will wait patiently while we catch up, or cut us off to prove a point. I don't know, either. But I know the cost of doing nothing is higher than the cost of the check. And I know the government seems to have figured that out too.
Here's what sticks with me tonight. Somewhere in Brazil, in a place none of us have been, a dump truck is hauling red dirt up out of a pit. That dirt, a few months from now, will end up in a magnet. That magnet will end up in a jet. That jet will sit on a runway in Arizona or Alaska or the deck of a ship in the Pacific. And for the first time in a long time, the whole chain — from the dirt to the runway — won't run through China.
That's new. That's worth watching.
More on this tomorrow.
— Lauren
Editor, American Ledger
