Dysprosium Powers Missile Guidance in Pentagon's Rare Earth Push

The Trump administration's recent $1.6 billion equity stake in USA Rare Earth marks a pivotal move to secure domestic production of heavy rare earth elements, particularly dysprosium. This investment targets the company's Round Top deposit in Texas, which holds significant dysprosium reserves essential for defense technologies. Dysprosium is doped into neodymium-iron-boron magnets to enhance their performance under extreme heat, making them indispensable for precision-guided missiles and F-35 fighter jet actuators.

In military applications, dysprosium ensures magnets retain magnetism during the intense conditions of missile flight or jet engine operation. Without it, guidance systems in Tomahawk missiles and Virginia-class submarines would fail, as standard magnets lose coercivity above 80°C. USA Rare Earth's focus on heavy rare earths like dysprosium and terbium positions it to supply the Pentagon's demand for resilient electronics in radar arrays and hypersonic threat trackers.

China's near-monopoly on heavy rare earth processing—controlling 99% of global capacity—has exposed U.S. vulnerabilities, prompting export restrictions that disrupt defense supply chains. The Pentagon's funding accelerates a fully integrated U.S. mine-to-magnet facility in Oklahoma, aiming to produce 10,000 tonnes annually of critical alloys. This reshoring effort counters Beijing's weaponization of exports, as seen in tightened licenses for dual-use materials since 2025.

Strategically, dysprosium's scarcity amplifies its importance amid rising tensions in the Western Pacific. While light rare earths like neodymium dominate EV motors, heavy variants enable high-stakes defense hardware where failure is not an option. Graphite One's recent tests in Alaska further confirm elevated dysprosium in garnets, signaling emerging domestic sources. Yet, full independence remains years away, with Pentagon overhauls prioritizing surge capacity for munitions dependent on these elements.