Pentagon’s $1B Critical-Minerals Plan Sends Rare-Earth Plays Flying

U.S. rare-earth and critical-minerals stocks ripped higher after reports that the Pentagon’s Defense Logistics Agency (DLA) is preparing to stockpile up to $1 billion of key inputs used across defense and electrification supply chains. According to reporting on recent DLA filings, planned purchases include as much as $500M of cobalt, $245M of antimony (from U.S. Antimony), $100M of tantalum, and ~$45M of scandium—alongside broader consideration for rare earths, tungsten, bismuth, and indium.

Market reaction

The bid for security-of-supply comes amid tighter Chinese export controls and stepped-up U.S. industrial policy. MP Materials and peers jumped late last week on expectations of continued government support; USA Rare Earth and others also rallied. Bloomberg

This isn’t happening in a vacuum: the DoD has already funneled capital toward domestic magnets and processing—most visibly through financing tied to MP’s U.S. magnet facility—which reinforces the policy backdrop for the DLA’s stockpiling move. Washington Technology

Sector Impact: Rare Earths and ETFs

This demand shock has sent rare earth stock prices soaring. USA Rare Earths (USAR) and MP Materials (MP) have more than tripled since July, while ETF proxies like VanEck Rare Earth/Strategic Metals ETF (REMX) and Sprott Energy Transition Materials ETF (SETM) have captured broad exposure across the rare earth industry. Both ETFs hold global miners poised to benefit from the Pentagon’s buying spree and downstream price increases in minerals such as germanium and antimony.

VanEck Rare Earth/Strategic Metals ETF (REMX): Pure-play exposure to companies involved in producing, refining, and recycling rare earths and strategic metals. It’s a direct way to express a view on rare-earth value chains—albeit with global exposure that can include non-U.S. jurisdictions.

Sprott Critical Materials ETF (SETM): Broader “critical materials” sleeve (uranium, copper, lithium, nickel, cobalt, graphite, manganese, silver, and rare earths). Notably, MP Materials and Lynas sit among top weights, giving investors targeted leverage to U.S./ally supply-chain build-outs while maintaining diversification across the transition-materials complex.

Geopolitical and Market Impact

With China restricting exports, Germanium prices have surged, antimony trioxide has nearly doubled, and the Pentagon is widening its evaluations to additional rare earths, tungsten, bismuth, and indium. Non-Chinese supply remains under pressure as Washington positions the U.S. for the next phase of global competition in high-tech capabilities.

What this means for you: Investors seeking exposure to the rising strategic metals trend should consider ETFs like REMX and SETM, which offer diversified access to the rare earth market and related supply chain beneficiaries. For those tracking sector momentum and policy shocks, the current demand environment presents compelling opportunities to align portfolios with U.S. defense-driven mineral acquisition strategies.

Quickly compare REMX, SETM side by side with our ETF Compare Tool