Army official says Chinese mineral shortage could impact military equipment

A growing shortage of rare minerals, magnets and metals from China needed for manufacturing military warfighting equipment could lead to the Department of Defense pulling military equipment from a stockpile maintained for emergencies, an Army lieutenant general said Wednesday at a Richmond symposium hosted by the National Defense Industrial Association.

A panel of senior military leaders who specialize in logistics and supplying warfighting materials to U.S. military branches said cuts in defense staffing and spending are causing them to reassess priorities, although they do not expect a decrease in demand for equipment produced by private sector contractors, including those in Virginia.

Speaking at the NDIA’s annual DLA Supply Chain Alliance Symposium & Exhibition, a multiday event held this year in downtown Richmond, leaders from the Defense Logistics Agency, the U.S. Navy, the U.S. Army, Air Force and the Defense Contract Management Agency addressed supply chain challenges as well as the changing nature of global warfare.

One particular area of concern is rare earth minerals and magnets needed for drones, vehicles and tech equipment, because China has a virtual monopoly on the export market and mineral refining capabilities, and supplies have been delayed recently by President Donald Trump‘s trade war with Beijing. Although the export delay is most affecting U.S. automakers, it also impacts the military and its commercial equipment manufacturers.

The Defense Logistics Agency, headquartered at Fort Belvoir in Fairfax County, manages a strategic stockpile of military equipment, said Army Lt. Gen. Mark Simerly, the DLA’s director, with a certain level of inventory maintained in case of emergency. “We’ve acquired this capability over time. We maintain it, manage it, make sure that it’s in a usable state, but otherwise we don’t issue [equipment] out,” he said.

Now, however, “we might issue it to our customers in the industrial base or to our commercial manufacturers, as well, because of the shortfalls,” Simerly said. “We have to issue those items rather than just hold those items, because we’re approaching some periods of risk and manufacturing capability of critical commodities that we just can’t obtain, in part because we don’t either have the source of supply or, more importantly, we don’t have the refining capability in the U.S.”

The shortage may not reach that point, though. After two days of talks in London, Trump and Chinese officials announced they have agreed to a “framework” to speed up China’s exports of seven critical rare earths and associated products that automakers and other manufacturers rely on.

Trump, in exchange, agreed to back off on blocking Chinese university students’ U.S. visas, the Associated Press reported.

However, Veronique de Rugy, senior research fellow at George Mason University’s Mercatus Center, dismissed the London truce as “a handshake deal … It can change at any time.”

Simerly added that the shortage of rare earth minerals and magnets is “really kind of an enduring challenge that may be made more acute by recent events, but it’s not created by these recent events alone,” referring to Trump’s trade war with China. He also noted that the DLA has begun mining discarded materials, “things that are in the disposal process,” and providing them to manufacturers.

“So, for instance, any old sites that are being demilitarized, when they get turned into DLA from the services, we’re able to … capture germanium as an example, or titanium,” and use it for additive manufacturing, Simerly said.

Asked about Virginia’s shipbuilders and defense contractors and the impact of federal spending cuts and resulting private sector layoffs and furloughs, Simerly said, “That’s mostly an internal discussion. We are still going to have demands upon industry. We’re still going to have demands upon our partners in advisory roles, many of which operate in this state. So we expect the demands to meet future requirements for readiness … to continue to grow.”

He added that he doesn’t expect DLA’s demands on private-sector defense businesses in Virginia to change a great deal despite federal spending cuts, and White House layoffs of federal civilian workers has not hit his agency particularly hard.

“We’re spread out in 48 different states and 22 different countries,” Simerly said, and many of the people in eliminated jobs have taken voluntary retirements.

In February, the Pentagon proposed cutting $50 billion out of its annual budget over the next five years, or about 8% of its $800 billion budget, but new budget documents indicate that the DOD intends to request about $205 billion in procurement funding for fiscal year 2026, about 18% more than in fiscal 2025, Breaking Defense reported this week.

The Associated Press contributed to this report.