Pentagon Eyes 75-Year Rare Earth Deal to Counter China's Grip

The U.S. Army is seeking first access to American-produced heavy rare earths, and a company called REalloys (NASDAQ: ALOY) has signed a nonbinding term sheet that could place it at the top of the military’s supplier list, OilPrice reported. The outlet’s headline describes the Pentagon as eyeing a 75-year arrangement aimed at ending China’s dominance over the materials.

What the Report Says

According to OilPrice, the Army wants “first dibs” on heavy rare earths produced in the United States. REalloys, a Nasdaq-listed company, has signed what the outlet calls a landmark term sheet. The document is nonbinding, meaning neither side is yet legally committed to the terms described.

The report frames the effort as a response to China’s hold on the rare earth market. Heavy rare earths are the category the headline singles out as the point of the Pentagon’s concern. The summary available to this desk does not provide the financial terms, volumes, production sites or timeline of the arrangement, and those details should be treated as unconfirmed until the parties or the Army release them.

Why It Matters

The 75-year duration cited in the headline would be long by the standards of defense procurement. Term sheets of this kind are typically a first step, and a nonbinding one can change or fall through before any contract is signed. The report does not say whether the Army or the Defense Department has publicly confirmed the term sheet, and this desk has not independently verified the arrangement.

What the report does establish is the direction of Pentagon thinking: securing a domestic source of heavy rare earths and giving the military priority over that output. That approach would treat the materials as a strategic reserve rather than a commodity left to open-market competition.

Context: Supply Chains and Readiness

The story arrives amid sustained U.S. effort to shore up military capacity. On Monday, this desk reported that the U.S. approved a $2.1 billion Patriot missile sale to Ukraine, and that U.S. forces struck radar and missile launcher sites on Iran’s Qeshm Island. Both developments underline the demand on American weapons stocks and the industrial base behind them. This desk has not seen reporting that ties the rare earth term sheet directly to either event, and the connection here is one of general context only.

Separately, an Institute for the Study of War and American Enterprise Institute update dated November 3 tracks developments involving China and Taiwan, the theater in which Washington’s dependence on Chinese-processed materials is most often discussed. The summaries available to this desk do not detail that update’s contents.

What to Watch

Several questions remain open. Whether the Army publicly confirms the term sheet will indicate how far along the plan is. Whether the nonbinding document converts into a binding contract, and on what terms, will determine whether the 75-year figure is meaningful or aspirational. And whether other domestic producers receive comparable offers will show if the Pentagon is picking a single partner or building a wider network.

REalloys, as a publicly traded company, would be expected to disclose material agreements through ordinary securities filings if the deal advances. Readers should look to those filings and to Army statements for confirmed figures.

This story is developing, and the desk will update it if the Army, the Defense Department or REalloys releases further detail.