Army Weighs 75-Year Rare-Earth Deal as China’s Export Leverage Looms

Retired four-star Gen. Jack Keane, the Army’s former Vice Chief of Staff and a REalloys director, said on November 3 that China “has made clear it is prepared to use [America’s] dependence as leverage.” The company was selected by the Army for exclusive negotiations over a facility to process dysprosium and terbium on a military base.

China placed seven rare earth elements, including those two metals, under special export licenses in April 2025. Ford CEO Jim Farley said the shortage forced the company to shut plants for three weeks because it could not obtain high-power magnets. In October 2025, Beijing announced rules that would have required approval for exports of magnets made outside China if they contained even trace amounts of Chinese rare earths. Military-use requests would be “automatically rejected,” according to Gracelin Baskaran, director of the Critical Minerals Security Program at CSIS. Those rules remain on hold under a U.S.-China truce, which Treasury Secretary Scott Bessent said runs until January 10, 2027.

China has also targeted defense-related companies directly. On June 22, 2026, its Commerce Ministry banned exports of goods with military uses to 10 U.S. companies and organizations it linked to the American military, including two rare earth companies, and prohibited third parties worldwide from transferring the goods to them.

Dysprosium and terbium are used in heat-resistant magnets for radar, sonar, electric motors and precision-guided munitions. From January 1, 2027, U.S. defense contractors will be barred from delivering magnets containing materials from China, Russia, North Korea or Iran at any stage of production. Keane said the country’s ability to deter conflict and produce weapons at scale depends on supply chains it controls.

The Army and REalloys tentatively agreed on terms for about 200 acres at Tooele Army Depot. Their non-binding term sheet proposes an initial 50-year lease, with an option to renew for 25 years; federal law normally caps such leases at five years. The Army would have first opportunity to buy dysprosium and terbium produced at the site, but would not be obliged to purchase them. The proposed lease still requires site plans, environmental reviews, permits and approvals.

REalloys is also pursuing supply from Canada and Greenland. It has rights to most output from an expansion by the Saskatchewan Research Council, which is designed to produce dysprosium and terbium, with initial production targeted for early 2027. Critical Metals has committed 15% of output from Greenland’s Tanbreez project to REalloys for 15 years once the mine is operating. The company says it aims to combine processing, metal production and magnet manufacturing.

The Army named REalloys to a shortlist of four companies in June for negotiations on critical-mineral plants on Army land. The Defense Logistics Agency also tapped the company’s Ohio unit to design a plant for samarium and gadolinium metal. Keane said the Tooele terms are “an important step toward bringing heavy rare earth processing onto a U.S. defense installation.”