DFARS 2027 Ban on Chinese-Origin Rare Earths Forces Lockheed Martin to Secure New Magnet Supply
LMT•December 2024 antimony ban spiked prices 2,600% and April 2025 licensing of seven heavy rare earths threaten Lockheed Martin’s jet engine magnet supply. New DFARS procurement rules banning Chinese-origin rare earths from all U.S. defense contracts by January 1, 2027 compel Lockheed to secure non-Chinese rare earth sources.
1. China’s Export Controls Expand
China escalated rare earth restrictions with an October 2025 ban on exporting processing technology and an April 2025 licensing requirement for seven heavy rare earth elements, including dysprosium and terbium. In December 2024, an antimony export ban sent global prices up 2,600% and collapsed U.S. shipments by 97%.
2. DFARS 2027 Ban Forces Supply Diversification
Effective January 1, 2027, DFARS procurement rules will bar Chinese-origin rare earths from all U.S. defense contracts, impacting magnets in F-35 engines, missile guidance systems and drone motors. Lockheed Martin must secure fully compliant non-Chinese sources or risk supply disruptions for critical defense programs.
3. REalloys Positions as Key Non-Chinese Supplier
REalloys holds an exclusive 80% offtake agreement from North America’s only non-Chinese heavy rare earth processing facility and operates a metallization plant in Euclid, Ohio. Its feedstock is diversified across the U.S., Canada, Brazil, Kazakhstan and Greenland, and it has a patent-pending process eliminating hydrofluoric acid from rare earth production.
