A National Emergency Hidden in Plain Sight
Dear Investor,
What I’m about to share with you might be the most important investment story of the decade.
It involves a vulnerability so severe that the Pentagon just mobilized $1 billion in emergency funds to address it. A crisis so urgent that President Trump threatened China with 100% tariffs. And an opportunity so massive that JPMorgan Chase just committed $10 billion to companies in this sector.
Yet most Americans have no idea it’s happening.
Here’s the shocking truth: America’s entire defense infrastructure is held hostage by China.
The 920 Pound Problem
Every single F-35 Lightning II fighter jet — the crown jewel of American air superiority — contains 920 pounds of rare earth materials. Without these minerals, the jet can’t fly. Its radar won’t work. Its missiles won’t guide. Its electronic warfare systems are useless.
But it’s not just the F-35:
- Each Virginia-class submarine requires 9,200 pounds of rare earth elements
- An Arleigh Burke destroyer needs 5,200 pounds
- Tomahawk missiles, Predator drones, and JDAM smart bombs all depend on rare earth magnets
According to a recent Pentagon assessment, over 80,000 distinct parts across 1,900 weapons systems rely on these critical minerals. That’s 78% of all Department of Defense weapons that could be crippled without access to rare earths.
And here’s the terrifying part: China controls 70% of global rare earth mining and 90% of processing capacity.
The Stranglehold Tightens
On October 9, 2025, China dramatically expanded its rare earth export restrictions. They now control exports of 12 of the 17 rare earth elements. Any company that wants to export products containing even 0.1% of Chinese rare earths needs Beijing’s permission.
The message is clear: Play by our rules, or your military goes dark.
The Pentagon’s response was swift and unprecedented. Within days, they announced a $1 billion emergency stockpiling program — the largest such effort since the Cold War. At its peak in 1954, America’s strategic stockpile held $43 billion worth of materials (in today’s dollars). By 2020, it had dwindled to less than $1 billion.
Defense Logistics Agency officials are scrambling to secure supplies, with some requested quantities exceeding America’s entire annual consumption. The price of components containing gallium has already jumped 6% since the restrictions. Antimony is up 4.5%.
The Clock Is Ticking
China’s most severe restrictions take effect December 1, 2025. That’s less than 50 days away.
When that deadline hits, America faces a choice: Cave to China’s demands or watch our defense capabilities evaporate.
Unless…
The Solution
There’s a reason billionaires like Warren Buffett, Bill Gates, and Jeff Bezos are quietly positioning themselves in this sector.
Because rare earths aren’t just about defense. They’re the backbone of the entire green revolution:
- Electric vehicles need them for motors (up to 2 kg per vehicle)
- Wind turbines require 600 kg of rare earth magnets per megawatt
- Smartphones, medical devices, robotics — they all depend on these materials
The market for rare earth magnets alone is worth $14 billion annually and growing fast. Demand is expected to triple in the next eight years.
America Strikes Back
The Trump administration isn’t sitting idle. They’ve designated rare earths as essential to national defense under the Defense Production Act. They’re offering massive subsidies and taking direct equity stakes in mining companies.
Just look at what’s already happening:
- The Pentagon became the largest shareholder in MP Materials, investing $400 million
- Apple invested $500 million in a single rare earth producer
- JPMorgan Chase committed $10 billion to critical mineral companies
Rare earth stocks have exploded:
- MP Materials: Up 341% year-to-date
- Energy Fuels: Up 284% year-to-date
- NioCorp: Up 87% year-to-date
But these gains pale in comparison to what’s coming…
The Hidden Giant
While Wall Street chases the obvious plays, one company has been quietly assembling the pieces of America’s rare earth salvation.
This company controls deposits so rich they contain 16 of the 17 rare earth elements — including all the heavy rare earths that are most critical for defense applications. Their flagship property has been called “the largest heavy rare earth deposit in the world outside of China.”
They’re not just mining. They’re building America’s first fully integrated mine-to-magnet supply chain. From extraction to processing to manufacturing the actual magnets that power our jets and submarines.
They’ve already:
- Secured contracts with the Department of Defense
- Produced 99.1% pure dysprosium oxide (critical for high-temperature magnets)
- Built a 310,000 square foot manufacturing facility
- Successfully produced their first batch of sintered permanent magnets
The Pentagon knows how crucial they are. Texas officials have designated their project a “high priority” for state and federal support. The state expects to receive $26 million annually in royalties once production ramps up.
The Company: USA Rare Earth (NASDAQ: USAR)
After extensive research, I’m convinced USA Rare Earth represents the single best opportunity to profit from America’s race to secure critical minerals.
Here’s why:
The Round Top Advantage
USA Rare Earth controls 80% of the Round Top Heavy Rare Earth and Critical Minerals Project in West Texas. This isn’t just another mining claim — it’s a geological miracle.
Round Top contains:
- 1.6 billion metric tons of rare earth deposits (yes, billion with a B)
- 16 of the 17 rare earth elements
- Especially rich in heavy rare earths like dysprosium and terbium (essential for defense)
- Also contains lithium (9,800 tons per year projected), gallium, beryllium, and other critical minerals
- The U.S. Geological Survey identified it as America’s largest gallium deposit
The economics are staggering:
- Net Present Value: $1.56 billion
- Internal Rate of Return: 70%
- Payback Period: 1.4 years
- Projected annual revenue: $395 million
- Annual royalties to Texas: $26 million
At full production, Round Top could supply 17% of America’s projected rare earth demand.
The Stillwater Facility
But USA Rare Earth isn’t waiting for Round Top to come online. They’ve already built a 310,000 square foot magnet manufacturing facility in Stillwater, Oklahoma — the only scalable sintered neo-magnet manufacturing system in the Western Hemisphere.
Key milestones:
- January 2025: Produced first batch of rare earth magnets
- March 2025: Commissioned advanced Innovations Lab
- Q2 2025: Beginning customer prototype production
- 2026: Commercial production begins
At full capacity, this facility will produce 5,000 metric tons of magnets annually — hundreds of millions of individual magnets. That’s enough to supply a significant portion of America’s defense and technology needs.
The Less Common Metals Acquisition
In September 2025, USA Rare Earth made a game-changing move: acquiring Less Common Metals (LCM), the world’s most established non-Chinese rare earth metal and alloy producer.
This $100 million acquisition gives them:
- Immediate rare earth metal production capability
- 67,000 square foot facility in the UK
- Proven technology for both light and heavy rare earth processing
- Established customer relationships globally
This transforms USA Rare Earth from a development company into an operating business with immediate revenue potential.
Strategic Advantages
- Vertical Integration: Only company outside China with true mine-to-magnet capabilities
- Pentagon Support: Direct backing from Department of Defense
- Location: All operations in stable, friendly jurisdictions (Texas, Oklahoma, UK)
- Technology: Proprietary Continuous Ion Exchange process for separation
- Green Credentials: Committed to 100% renewable energy at Round Top
Management Team
CEO Joshua Ballard brings deep industry experience. The company has assembled a team of rare earth experts, including Bob Fredette, one of America’s leading magnet specialists. They’ve also brought on strategic advisors like former Secretary of State Mike Pompeo.
The Stock Story
USA Rare Earth went public through a SPAC merger and trades on NASDAQ under the symbol USAR. Here’s what’s happened:
- Stock has surged 151% year-to-date
- Market cap has grown to over $3 billion
- Analysts at Roth Capital just doubled their price target to $40
- Stock recently hit all-time highs above $37
But I believe we’re just getting started…
Catalysts Ahead
Several major catalysts could send USAR soaring:
- December 1st China Restrictions: When China’s new export controls hit, demand for non-Chinese sources will explode
- Pentagon Contracts: Additional defense contracts likely as stockpiling accelerates
- Commercial Production: 2026 startup of magnet manufacturing
- Round Top Development: Feasibility studies and permitting progress
- Customer Announcements: Major manufacturers seeking secure supply
The Risk/Reward
Every investment carries risk, and USA Rare Earth is no exception:
- Mining projects can face delays and cost overruns
- Permitting for Round Top still in progress
- Competition from other rare earth developers
- Potential for China to flood market to destroy competitors
However, the strategic importance of rare earths means government support is virtually guaranteed. The Pentagon can’t afford to let this company fail.
My Recommendation
USA Rare Earth represents a unique convergence of factors:
- A strategic resource America desperately needs
- Government backing and support
- Massive deposits of critical minerals
- First-mover advantage in domestic production
- A stock price that hasn’t yet reflected the full potential
While the stock has already moved significantly, I believe we’re in the early innings of a multi-year bull market in rare earths. China’s stranglehold won’t break overnight, but USA Rare Earth is positioned to be THE major beneficiary as America rebuilds its supply chain.
Consider this: At full production, USA Rare Earth could generate $395 million in annual revenue. With even a conservative multiple, that suggests a market cap far above today’s levels.
My target: $75-$100 per share within 24 months as production ramps and the rare earth crisis deepens.
How to Play It
For aggressive investors: Buy USAR stock directly. The volatility will be significant, but the potential rewards are massive.
For conservative investors: Consider building a position gradually on any pullbacks. This is a strategic asset that America needs to succeed.
For options traders: Long-dated calls could provide leveraged exposure to the rare earth boom.
The Bottom Line
We’re witnessing a historic reshaping of global supply chains. The country that controls rare earths controls the future of technology and defense. For 30 years, that country has been China.
But that monopoly is about to break.
USA Rare Earth isn’t just a mining company or a manufacturing company. It’s a solution to one of America’s most pressing national security challenges. When the history of this period is written, companies like USA Rare Earth will be recognized as the ones that helped America reclaim its independence.
The Pentagon is buying. Apple is buying. JPMorgan is buying.
The only question is: Will you join them before it’s too late?
The December 1st deadline is approaching fast. When China’s restrictions hit and the mainstream media catches on, this opportunity will vanish.
Don’t say I didn’t warn you.
To your wealth,
Tom Anderson
Editor, Wall Street Letters
P.S. Remember what happened to oil stocks in the 1970s during the Arab oil embargo? Rare earths could be this generation’s equivalent crisis — and opportunity. The companies that solve this problem won’t just make money; they’ll make history.
