Since the passage of the National Defense Authorization Act (NDAA) in January 2021, there has been heightened attention to the vulnerabilities in the rare earth element (REE) supply chains. Section 817, in particular, represents one of the more decisive policy moves aimed at fortifying the United States’ position in securing these critical inputs. The provision mandates efforts to identify and reduce reliance on foreign—often single-source—suppliers of REEs that underpin a range of defense technologies. And while the language of the statute conveys a sense of urgency, translating that into operational frameworks for defense contractors is proving, in places, to be more intricate than originally anticipated.
The REE problem is, by now, well known. The U.S. remains heavily dependent on imports, especially from jurisdictions where geopolitical tensions can introduce significant risk. This is not new; policymakers and defense analysts have flagged it repeatedly over the past two decades. What Section 817 has done is sharpen the focus, calling explicitly for resilience planning that goes beyond merely identifying risk to actively managing it. Contractors working with the Department of Defense (DoD) now find themselves tasked with demonstrating that they have a genuine handle on where their REE components are sourced—and, perhaps more importantly, how those supply lines can be diversified or fortified.
One practical starting point is to engage with the U.S. Geological Survey’s (USGS) open rare earth element deposit data. The dataset offers detailed information on known REE occurrences and deposits across U.S. territory and allied nations, and while it’s not a magic bullet, it provides a fact base that can help contractors vet their upstream suppliers. The logic here is fairly straightforward: by mapping supplier source declarations against USGS deposit data, contractors can begin to distinguish between high-risk single-source streams and more resilient multi-source configurations. There are, of course, gaps—especially when suppliers are reticent about their own sourcing or when complex multi-tier supply chains obscure the true origin of inputs. Still, the USGS data remains one of the more robust public-domain tools available for this task.
Building a risk-matrix model is the next logical step. Here, many contractors are grappling with how detailed—and how dynamic—these matrices need to be. At minimum, a well-structured matrix should include columns for supplier names, REE types provided, country of origin, and the number of alternative suppliers identified. Additional fields might track price volatility, export restrictions, or political risk indices associated with supplier jurisdictions. It sounds, on paper, quite mechanical. But in practice, the judgments embedded in such matrices can be messy. What weight should be assigned to geopolitical risk versus price stability? How frequently should the matrix be updated? Monthly? Quarterly? There’s no consensus yet, though most seem to agree that static, annual reviews won’t cut it anymore.
Some contractors are layering qualitative assessments onto these matrices, incorporating intelligence on supplier business practices, environmental performance, or even their proximity to potential conflict zones. The hope is to move beyond compliance checklists and toward something that can actually inform procurement decisions in real time. Others are experimenting—cautiously—with predictive analytics, trying to forecast disruptions based on macroeconomic signals or trade policy shifts. There’s enthusiasm for these approaches, but also unease about their reliability, especially given how opaque some REE markets remain.
Another wrinkle—one that doesn’t always get enough attention—is the difficulty of balancing security goals with commercial realities. Diversifying REE supply chains sounds, in theory, like an unequivocal good. But contractors are finding that viable alternatives often come at a premium, or with their own sets of reliability issues. Domestic sources, where available, can be limited in capacity or face permitting and environmental challenges that slow development. And then there’s the question of substitution: can alternative materials or technologies reduce dependency on REEs altogether? That avenue, while promising, remains nascent in many defense applications.
There’s a growing recognition that no single contractor, or even agency, can solve these supply chain vulnerabilities in isolation. Collaborative platforms—formal and informal—are springing up, where firms share non-competitive intelligence about suppliers and sourcing risks. The DoD has signaled openness to supporting these initiatives, though the mechanisms for doing so are still being worked out. And as these networks evolve, there’s likely to be an increasing role for public data like the USGS repositories—not just as static reference points, but as dynamic tools that can be integrated into live supply chain monitoring systems.
What comes next is hard to predict. The urgency around REE supply chain resilience isn’t going away; if anything, global developments have only heightened its salience. But building the kind of supply chain visibility and agility envisioned by Section 817 will take sustained effort, investment, and no small amount of ingenuity from the contractor community.