A huge blow to Beijing! For the first time in the history of national security, the US Department of the Army (US) has taken a drastic step by handing over their military base to be used as a commercial processing center for the world's most critical commodity today, which is rare earth elements.
The US military has chosen private company REalloys to build and operate a heavy rare earth processing complex at Tooele Army Depot, Utah.
This move is not a fluke, this is Washington's emergency plan (crash program) to build its own domestic supply chain and end China's absolute dominance in this strategic mineral market.
Why Are Rare Earths So Important? (This Is Not an Ordinary Mineral!)
For those who don't know, rare earth elements such as dysprosium and terbium are 'secret' materials that are a must-have for producing high-performance permanent magnets. In addition to being a key component in advanced military assets, this commodity now has a crazy demand in the current era of Artificial Intelligence (AI) revolution!
How are rare earths driving global AI technology?
AI Data Center Infrastructure: Supercomputers that train giant AI models require high-capacity hard drives and extreme cooling systems. Both require rare earth components to operate nonstop.
High-Grade Semiconductor Chips: The manufacturing process of sophisticated microchips (such as the GPU processing chips that AI companies are clamoring for) requires a blend of rare earth minerals to ensure stable electrical performance at the microscopic scale.
Military Assets: In the defense sector, the F-35 fighter jet (Lockheed Martin) requires 900 pounds (408 kg) of rare earths, while the Patriot (RTX) missile system relies entirely on these minerals for its smart radar system.
For decades, the West has been complacent and allowed China to monopolize this industrial chain from mining to the production of the final product. Now, with the AI and military arms race intensifying, the US realizes that it is in grave danger if Beijing acts to restrict the export of these materials.
Sacred Date January 1, 2027
That's why Washington is 'compressing' projects that should have taken years into just a few months. President Donald Trump has set very strict federal procurement laws:
🚫 Mandatory Restrictions: Starting January 1, 2027, all US defense systems and weapons are completely banned from using rare earth materials from China. If defense giants fail to prove their supply chains are clean from China, they will lose billions of dollars in contracts!
REalloys' new complex at Tooele Army Base is targeted to begin commercial development in 2027 and be fully operational by 2028. For the initial phase, REalloys will begin supplying military-grade qualification materials by the fourth quarter of 2026 to allow defense companies to make early verifications.
Malaysia Apparently Among the World's Rare Earth 'Keys'!
Amidst this US-China geopolitical turmoil, many have overlooked the fact that Malaysia is actually one of the most important and largest rare earth producing and processing countries globally!
Why is Malaysia the world's focus on rare earths?
Major Processing Hub Outside China: Through the Lynas Malaysia processing plant in Kuantan, Pahang, our country is home to one of the world's largest rare earth separation facilities operating outside China. The US and its allies have long relied heavily on the chain from this plant in Malaysia to obtain alternative supplies.
NR-REE Gold Mine: Our country is also rich in high-value Non-Radioactive Rare Earth Elements (NR-REE) deposits, especially in several states such as Perak and Kedah, making it a target for high-tech investment from various foreign investor countries.
Looking at this great potential, it is not surprising that Western markets are now rushing to strengthen their supply chains with any allied countries, including seeing Malaysia's potential to reduce dependence on China before the trade border is completely closed.
The US move to allow private companies to operate in military bases proves how desperate they are to get out of China's shadow. This is no longer just a business issue, this is an issue of geopolitical survival.
We expect rare earth-related stocks outside of China, including Malaysia, to experience a significant bullish sentiment by 2027. The sector is now driven not only by economic factors and EV demand, but also by the US’s unlimited national security budget. Keep an eye on the counter-movements of this critical mineral commodity in your portfolio!
Do you think the US will be able to ‘liberate’ itself from China’s rare earths by 2027, or will China counter-attack by restricting exports early? Let us know in the comments below!
