REEs in Defense: Commercially insignificant, strategically imperative
US defense drives less than 0.1% of global demand
As per its latest Rare Earth Magnet Market Outlook to 2040 report, the industry’s go-to reference for magnet market intelligence, Adamas Intelligence forecasts that defense is one of the fastest growing rare earth end-use categories, propelled higher by the coming proliferation of robotics, advanced air mobility and automated systems currently under development.
As of today, however, defense remains one of the smallest rare earth end use categories, driving just a sliver of total global demand in a typical year by volume.
In the US specifically, defense-related applications drive less than 0.1% of total global demand making the sector commercially insignificant, albeit strategically imperative.
In the US, “DOD uses large quantities of rare earths and other critical materials in its weapon systems but has limited influence on the markets for these materials. DOD estimates that its total demand for rare earths is less than 0.1 percent of global demand”, stated a 2024 report by the US Government Accountability Office.
In the case of rare earth magnets, including NdFeB and SmCo varieties, they’re used widely in electric motors for munitions guidance systems and actuators for fighter jets and navy ships.
In the former, SmCo magnets are often used for their robust magnetic strength at elevated temperatures.
In the latter, NdFeB magnets are widely used, albeit production of fighter jets, navy ships and submarines is known to be volatile year-to-year resulting in significant swings in magnet consumption.
According to Ryan Castilloux, Managing Director at Adamas Intelligence, “US magnet consumption for defense applications fuels demand for just tens-to-hundreds of tonnes of magnet rare earths per annum”.
Adamas has advised government defense departments and agencies for over a decade. “Defense is a small black box. Demand is highly volatile, dissipative and deliberately masked with opacity. Even the highest ranks of government don’t have a full picture of what that demand looks like – that information is simply not divulged by contractors – it’s highly sensitive”, added Castilloux, the firm’s primary interface with the defense industry.
“A surge in munitions production could spike demand for SmCo in a given year, while a surge in aircraft and ship production could boost demand for NdFeB. Defense-related manufacturing activities are top secret. Mapping demand by application or magnetic material for a particular year is a fool’s errand”, says Castilloux.
Magnet demand is just a fraction of a fraction
Of the “less than 0.1 percent” of global demand driven by US defense, just a fraction of that demand is for rare earth permanent magnets, like NdFeB and SmCo. A substantial share is for other rare earth chemicals and compounds, including those of lanthanum, cerium, neodymium and yttrium, used in everything from laser crystals to ceramics, optics, phosphors and more.
Adamas expects magnet-related demand for defense to grow faster than demand for all other elements but it will remain a niche segment overall into the foreseeable future.
Robotics and advanced air mobility offer two of the largest catalysts for accelerating defense-related demand in the years ahead. Companies like Archer Aviation, Anduril Industries, Palantir and others are working to populate frontlines with more robotics, automation, artificial intelligence and advanced mobility technologies, boding well for medium- to long-term demand growth.
Meet with leading rare earth and magnet suppliers
Meet with alternative rare earth miners and magnet producers in Toronto in September 2025 for Rare Earth Mines, Magnets & Motors 2025 where we’ll explore this topic further with leading market participants and industry experts.
The two-day event will bring together business and technical leaders from across the global mine-to-OEM supply chain for high caliber discussions and networking at a 5-star venue.
Key themes of this year’s conference will include robotics, automation, advanced air mobility, and the emerging mine-to-magnet supply chain coming together upstream.
Special guest: Steve Wozniak, co-founder of Apple
More information: www.adamasevent.com
