The US is the world’s preeminent military power. At USD 900 billion, Washington spends more on defense than the following nine countries combined, including China, Russia, India, Germany, South Korea, the UK, France, Saudi Arabia, and Japan.
The US is also the world’s largest arms exporter, controlling 44% of the global weapons market. Furthermore, the world’s largest defense companies, ranked by recent revenue and market cap, include U.S. giants such as Lockheed Martin, Boeing, RTX (Raytheon), Northrop Grumman, and General Dynamics.
However, the country’s mighty defense-industrial complex is currently surviving by a thread, as its only source of a critical heavy rare-earth magnet used in fifth-generation stealth fighter jets such as the F-35 and lethal missiles like Tomahawks is a decades-old samarium dump abandoned in a bankrupt factory in France.
Even more worryingly, even this samarium dump can supply the US defense industry for barely a year, beyond which there are no credible alternative supply plans in existence.
How the US got into this rabbit hole, despite pioneering the technology of samarium processing and its various uses in the defense industry in the 1960s, is a story as bizarre as today’s situation, where some of the world’s largest defense giants are living on a thread, not sure how long their supply of critical heavy rare earth magnets will last.
The Making Of Samarium Supply Bottlenecks
The US pioneered the development of samarium-cobalt (SmCo) permanent magnets, the primary defense-related use of samarium. These high-performance magnets, which offer strong magnetic fields, excellent resistance to demagnetization, and superior high-temperature stability, were invented based on work by Karl Strnat at Wright-Patterson Air Force Base and Alden Ray at the University of Dayton.
Due to their remarkable properties, Samarium Cobalt magnets are used in aircraft and satellite systems, as well as missile guidance and control systems.
However, the industry moved to China in the 1980s for a variety of reasons, including the presence of rich rare-earth deposits, lax environmental regulations (samarium processing is extremely polluting), and heavy state subsidies from the Chinese Communist government.
Today, China mines, processes, and sells such massive quantities of rare earths that it can keep prices artificially low, knocking out any foreign competition.
Over the decades, all Western companies that processed rare earths went out of business, unable to compete with China’s prices.
Today, China mines nearly 60% of the world’s rare earths and processes almost 90% of rare-earth magnets. However, China controls nearly all of the world’s supply of Samarium Cobalt magnets.
Earlier this year, in response to US President Donald Trump’s punitive tariffs on China, Beijing imposed strict restrictions on the export of rare-earth magnets.
Subsequently, China removed restrictions on the export of several light and medium rare-earth magnets; however, restrictions on the export of heavy rare-earth magnets, including Samarium Cobalt magnets, remained in place.
China began requiring export licenses for samarium and six other rare-earth metals in April this year, choking the supply for US defense giants.
Underscoring the criticality of samarium supply chains for the US, the U.S. Geological Survey named samarium the No. 1 critical mineral at highest risk of supply chain vulnerabilities in October in its proposed 2025 Critical Mineral List.
USGS.
The chokehold China placed on the supply of samarium had the potential to halt the production of many critical defense weapons systems in the US. However, a decades-old samarium dump in a bankrupt factory in France gave the US defense giants a lifeline.
Samarium Dump In A Bankrupt Factory That Gave Lifeline To US Defense Giants
New York-based Arnold Magnetic Technologies, a subsidiary of US conglomerate Compass Diversified and manufacturer of samarium-cobalt magnets with factories in Switzerland, Thailand, and China, had over a year’s supply of the metal on hand when China announced its export controls on April 4, said Aaron Williams, the company’s chief commercial officer.
However, as months passed and their supply plummeted, the company began to worry.
Arnold contacted UK-based Less Common Metals, one of the last remaining manufacturers of rare-earth metals in the Western world.
Less Common Metals contacted Solvay, a Belgian chemical company that was once one of the world’s largest producers of rare-earth oxides.
Luckily, Solvay had a factory in France that still had a decades-old, abandoned samarium dump.
Solvay had stopped separating rare-earth elements in France two decades ago because it had become “uneconomical,” a company spokeswoman told the New York Times. Samarium processed outside China is five to eight times as expensive.
But Solvay kept its stock of semifinished materials and still had the know-how and equipment to refine it.
Solvay’s entire inventory was around 200 tons, enough to supply the US defense industry for a year.
The U.S. defense industry requires less than 200 tons per year, according to estimates by Jack Lifton, co-chair of the Critical Minerals Institute, an industry advisory organization.
Less Common Metals (LCM) brought Solvay’s samarium to Britain, where the company is turning it into metal that will be melted into alloys. These alloys will be cut into magnets at US factories, which will in turn be supplied to US defense giants for use in fighter jets and missile systems.
“As market demand accelerates for sustainable, Western-sourced magnet materials, Arnold is taking decisive action to guarantee supply and provide commercial flexibility for our customers,” Aaron Williams, chief commercial officer of Arnold Magnetic Technologies, said.
“We are very pleased to partner with LCM and Arnold Magnetic Technologies to provide essential resources for high-performance applications, particularly in the strategic domain of the European Aerospace Industry,” An Nuyttens, president of GBU Special Chem at Solvay, said.
Notably, to further secure supply chains, the UK-based LCM was acquired by American miner USA Rare Earth on November 18. The acquisition demonstrates vertical integration strategies aimed at securing Western-origin material sources.
Even though these samarium magnets are much more expensive than the prices at which China was supplying the US until months ago, they provided a lifeline to the US defense-industrial complex at a critical time.
For now, the US has secured its supply of samarium magnets for at least a year, and the industry is confident that new sources of samarium will be found before Solvay’s stash runs out.
China might also relax its export restrictions in the meantime. However, as a popular saying goes, “Once burned, twice shy,” the US will be extremely cautious in the future, avoiding entirely depending on China for the supply of such a critical mineral.
