The U.S. Just Took A Big Step to Break China's Magnet Dominance
This is where China’s rare earth magnet monopoly ends. REalloys ( NASDAQ: ALOY) has signed a strategic agreement with permanent magnet manufacturer JS Link to develop one of the first fully integrated non-Chinese rare earth magnet platforms, bringing together feedstock, separation, metallization, and permanent magnet manufacturing under a single North American industrial strategy.
Permanent magnets power guided missiles, fighter aircraft, submarines, industrial robots, electric vehicles, AI infrastructure, and wind turbines. China manufactures the overwhelming majority of them, giving Beijing extraordinary leverage over industries now driving military modernization, advanced manufacturing and the global energy transition.
The agreement creates a path to manufacturing American rare earth magnets entirely on American soil.
Rebuilding North America’s rare earths supply chain is now moving at breakneck speed.
Only weeks ago, REalloys was selected by the U.S. Army for exclusive negotiations to develop heavy rare earth processing facilities at the Tooele Army Depot in Utah, placing the company at the center of Washington’s effort to rebuild domestic rare earth processing and ahead of the Department of Defense’s January 1, 2027, ban on Chinese-origin rare earth magnets. Today’s announcement carries that strategy one step further, extending it beyond processing into finished magnet manufacturing.
The U.S. Army project established the processing backbone. JS Link adds permanent magnet manufacturing. Together, they place every major stage of rare earth production–from feedstock through finished magnets–inside a single American industrial platform.
“In rare earths, strategic advantage belongs to the country that builds the magnets. That’s the capability we’re building here in the United States,” REalloys CEO Lipi Sternheim told Oilprice.com.
Building the Most Important Industrial Base of the Century
The JS Link agreement adds the final manufacturing capability. REalloys had already assembled much of the industrial chain, securing feedstock, rare earth processing, and heavy rare earth metallization before moving into permanent magnet manufacturing.
The center of that buildout is Saskatchewan. REalloys committed approximately $20.6 million to expand the Saskatchewan Research Council’s rare earth processing facility, securing preferred rights to up to 80% of its expanded output, including neodymium-praseodymium metal and separated dysprosium and terbium oxides. Commercial production is targeted to begin in early 2027.
Separated oxides are still an intermediate product. Before they can become permanent magnets, they must first be converted into high-purity metals, alloyed, and then manufactured into finished magnets.
REalloys is building that next stage as well. The company is funding a dedicated heavy rare earth metallization facility that will convert dysprosium and terbium oxides into metals, creating what is expected to become the largest heavy rare earth metallization operation outside China.
The first qualification-scale materials are expected in the fourth quarter of 2026. That would place North American-produced dysprosium, terbium and NdPr into customers’ hands for evaluation ahead of commercial production, moving the project from industrial construction into the final stage before commercial sales.
And feedstock is already secured. REalloys ( NASDAQ: ALOY) holds a definitive long-term offtake agreement for 15% of Phase 1 production from Critical Metals’ Tanbreez project in Greenland, a strategic alliance and offtake commitment tied to the Sheep Creek rare earth deposit in Montana, and a proposed supply framework with Ramaco Resources for coal-hosted rare earth material from the Brook Mine platform in Wyoming.
And the company continues to pursue additional supply from domestic and allied sources.
The Front-Line of Defense for an All-Out Industrial War
American rare earth companies are now operating under the assumption that access to Chinese materials can disappear overnight.
Beijing is now trying to police Chinese-origin materials after they leave China. Its latest export controls prohibit foreign companies and individuals worldwide from supplying designated American firms with certain dual-use products, including rare earth producer MP Materials and rare earth magnet manufacturer USA Rare Earth.
This is not simply about blocking exports from Chinese companies. Beijing instructed organizations and individuals worldwide to suspend existing transactions and stop transferring designated Chinese-origin dual-use materials to the targeted American firms.
In effect, the restrictions follow the material itself rather than the exporter, an approach that gives Beijing another layer of influence over global supply chains built around Chinese processing.
China’s Commerce Ministry justified the move on national security grounds, describing it as a response necessary to protect China’s strategic interests and fulfill its international non-proliferation obligations.
That puts pressure on every Western supply chain still dependent on Chinese processing, metallization, or magnet manufacturing.
For most of the past three decades, the United States assumed global supply chains would remain open regardless of geopolitical tensions. But now, export controls, procurement rules, sanctions, and investment restrictions are becoming permanent features of the industrial economy.
In that environment, companies capable of producing defense-qualified rare earth materials entirely within North America occupy a different place in the industrial landscape than they would have only a few years ago.
The strategic importance of that shift extends well beyond the rare earth sector itself. Kratos Defense & Security Solutions ( NASDAQ: KTOS), a major supplier of drones, hypersonic systems and advanced defense technologies, relies on high-performance permanent magnets for many of its next-generation platforms. Boeing ( NYSE: BA) also has a growing interest in securing reliable domestic magnet supplies as it expands production of military aircraft, satellites and autonomous defense systems, while Northrop Grumman ( NYSE: NOC) depends on rare earth-intensive components across missile defense, radar, electronic warfare and space programs. AeroVironment ( NASDAQ: AVAV), one of the Pentagon's leading drone manufacturers, also stands to benefit from a more secure North American rare earth supply chain, with permanent magnets playing a critical role in electric propulsion systems, guidance technologies and precision defense electronics. As Washington rebuilds a domestic mine-to-magnet ecosystem, a growing number of U.S. defense manufacturers could benefit from greater supply security and reduced dependence on Chinese processing.
They are no longer simply suppliers. They are becoming part of the infrastructure supporting the next generation of American defense manufacturing.
An integrated American rare earth industry is now taking shape years faster than anyone expected. An industrial base that took China decades to build is now being reconstructed across North America in just a few years, and REalloys is now part of the frontline of defense in the biggest industrial war of our time.
