Critical Mineral Supply Chain Concentration and Defense Industrial Base Vulnerability

Key Findings

• Critical mineral prices have reached crisis levels (HIGH confidence, 85-90%).
• Defense procurement faces unprecedented material constraints (HIGH confidence, 80-85%).
• US strategic response accelerates with massive government intervention (HIGH confidence, 85-90%).
• China weaponizes supply chain dominance through export controls (HIGH confidence, 80-85%).
• Defense supply chain vulnerabilities create exploitable attack vectors (MEDIUM confidence, 70-75%).

Executive Summary

Surging critical mineral prices, driven by a 557% tungsten price increase since February 2025 and a 17.5% rare earth price surge in February 2026 alone, are fundamentally reshaping defense procurement strategies amid escalating geopolitical competition between the US and China (HIGH confidence, 80-85%). The US response includes the February 2026 launch of Project Vault, a $12 billion critical minerals stockpile initiative, alongside new defense procurement regulations restricting Chinese materials starting January 1, 2027 . China's dominance of 61% of global rare earth mining and 91% of refining capacity, combined with recent export controls and dual-use restrictions, creates strategic leverage that adversaries can exploit to disrupt Western defense supply chains .