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Rare earth magnets seen as growing defense bottleneck, ETF highlights
World defense spending exceeds $2.7 trillion annually, and U.S. demand for specialized rare earth magnets is expected to rise to about 10,000 tonnes by 2030.
Defense spending is increasingly driving demand for rare earth materials used in military technologies, according to analysis cited by ETF Trends.
The article notes that global defense spending is above $2.7 trillion per year and highlights the U.S. Department of Defense requirement for roughly 3,000 to 4,000 tonnes of specialized rare earth magnets annually, with expected growth to around 10,000 tonnes by 2030.
Supply constraints remain a central concern, with China producing the majority of rare earth magnet output, accounting for 94% of global production, while only about 20,000 to 25,000 tonnes of rare earth magnet production occurs outside China, according to the piece.
ETF Trends also points to the Sprott Rare Earths Ex-China ETF (REXC) as a way to access rare earth companies outside China, framing the strategy around potential supply chain decoupling and defense related investment.