Pentagon Pursues 75-Year Rare Earth Lease to Bypass Chinese Monopoly

The proposed agreement grants the Army a right of first offer on production, ensuring priority access to materials essential for fighter jets, missile systems, and precision-guided munitions. Under the nonbinding term sheet, the government retains land ownership while REalloys bears the financial burden of constructing and operating the facility. This model represents a strategic shift for the Pentagon, which is moving to establish secure supply chains on domestic defense installations rather than waiting for private industry to develop infrastructure independently.

Dependence on China has become a primary national security concern, particularly after Beijing restricted exports of key rare earths in April 2025. With federal sourcing requirements tightening on January 1, 2027, defense contractors including Lockheed Martin, RTX, Northrop Grumman, and General Dynamics face mounting pressure to source compliant materials. While the deal remains subject to final financing and regulatory approvals, it offers a potential path toward insulating the American defense industrial base from foreign licensing leverage for generations.