Before Waging War, Check Your Supply Chains
Abstract
Waging modern war requires assured access to strategic minerals and the ability to process them into products that can readily enter the supply chain. Nations planning for future conflict can defeat rivals by preventing them from accessing ready sources of minerals, employing trade bans on vital minerals and metals, and through dominating refining processes. When supply chains are broken, munitions depth is a challenge. When war is waged without domestic production capacity and assured logistics, resilience and sustainment are at risk. Further, war waged without consideration to replenishment of munitions renders forces less capable of flexible action through reduced options due to lack of appropriate munitions.
Introduction
Waging modern war without assured access to strategic minerals and refining processes is like going to a grocery without checking one’s wallet and pockets to ensure that one has funds. Modern war consumes munitions and materials at a pace that may outstrip quick replacement capacity, especially if nations lack the strategic minerals necessary to create munitions. Weapons take time to build and require resources that may be unavailable at quantities to ensure rapid rearmament. Resource competition is not something that can be fought through outsourcing, especially when rearming nations seek the same strategic metals, minerals, and suppliers. Allies can help with resources, but if supply chains are broken and access to strategic minerals severed, the ability to wage war will be impaired or truncated to timelines limited by magazine depth. The process can begin years before the outbreak of hostilities as a concerted strategy to deny a competitor access to rare earth minerals, or minerals vital for munitions, rocket motors, and guidance systems. China has demonstrated how embargoes, restrictions, and exclusive extraction deals bar competitors from building up their militaries while China expands its armed forces. Understanding supply chain and industrial bottlenecks is key to seeing how Middle East munitions expenditure drives overall military readiness.
The Munitions Bill for War in the Middle East will Take Years to Pay Off
The war against Iran has depleted the US stockpiles of air defense and strike munitions as well as stocks of lesser capable but low production volume munitions. In April 2026, according to the Center for Strategic and International Studies (CSIS) estimates, the U.S. has expended around 1,000 Tomahawk cruise missiles of its a prewar estimated inventory of 3,100, more than 1,000 Joint Air-to-Surface Standoff Missiles, or JASSMs, compared with a prewar inventory of 4,400, at least 45% of the Army’s stock of Precision Strike Missiles (PrSM), almost 50% of its stock of Patriot interceptors (over 1,000) and 50% of Terminal High Altitude Area Defense (THAAD) interceptors, SM-3, and SM-6 missile defense interceptors. The US is entering a phase of global operations where a lack of magazine depth for its most advanced weapons restricts strategic options. Weapons transfers to Ukraine, as well as Israel are impacting what remains for operations against Iran.
The impact on security cooperation programs is telling: HIMARS and Javelins to Estonia are on hold, weapons scheduled for delivery to NATO allies are on hold, Persian Gulf allies are looking elsewhere for replacements for US weapons including South Korea and the United Kingdom. The US has responded to its Persian Gulf allies through sales of an estimated 5,250 air defense interceptor missiles that could take years to provide to Kuwait, United Arab Emirates, and Bahrain. This is the face of known US shortages, for example the expenditure of 1,300 Patriot missiles since the start of the Iran War. In the event of any hostilities in the Pacific against an opponent capable of mounting multiple stacks across multiple domains the potential for a critical shortage of these types of weapons raises risks, especially if domestic production cannot meet requirements. When the Trump administration announced that Ukraine could build Patriot missiles under license, it didn’t mention the construction of such missiles was a time consuming and intricate affair involving numerous subcontractors. The construction of replacement missiles won’t be quick despite industry promises.
Apart from exquisite weapons that require long timelines to manufacture, less complicated munitions that are expended in great quantities are subject to the tyranny of the supply chain. The anticipated rate of expenditure of munitions for future conflicts and the peacetime production rate are both tied to the availability of the materials necessary to make munitions. In the US lessons from the war in Ukraine are being applied, but the conversion of plants to greater production rates is slow. The Ukraine example of 155mm ammunition expenditures is sobering. A baseline expenditure for munitions at a rate of 75,000 round per month equals 900,000 per year, more if offensive operations are planned. If plants are limited to 75,000 rounds per month with ideal supply chains for all metals, that’s just for combat at a base level. It doesn’t bring in the multiplicity of other caliber munitions or special munitions types including resource constrained types like tungsten penetrator rods or armor piercing cannon shells.
Combat in Ukraine demonstrated the need for munitions includes more than air defense munitions. Retooling or creating factories for munitions that economically and effectively combat drones will be a logistical challenge for the defense industrial base unless action is taken on a large scale and with deliberate intent toward killing drones with lowest cost weapon systems.
Munition replacement cost and the rational employment of systems versus targets should drive munition replacement programs. Every million-dollar missile employed against a $100,000 drone is a loss of an expensive system that takes time to hand-build. Can systems once regarded as obsolete find a new role on the battlefield such as the M162 VADS? Can new systems find a role at a lower cost than interceptor missiles while repurposing less expensive weapons like a Hydra rocket for use against drones? When scarce missiles with long production timelines are expended on drones versus missiles, the economics become grim. Further, when deception and decoys are employed against interceptors, the cost per kill becomes unsustainable as magazines empty.
A concern for planners as well as those counting the number of available THAAD batteries and missiles is their deployment and vulnerability. Of the eight US THAAD batteries, five are outside the US: the UAE has two, Saudi Arabia one, and at least two are elsewhere in the world. Over 150 THAAD missiles were used by mid-April 2026. THAAD batteries and their AN/TPY-2 targeting radars are scarce—only thirteen have been delivered to the US. The fighting in the Persian Gulf expended 150 THAAD missiles, almost the sum of a two-year pre-war production run. In response to the expenditure rate in 2026, Lockheed Martin announced it will increase THAAD interceptor production capacity to 400 a year, more than the present production rate of 96. The numbers tell one story, but so do economics and supply chains. Many of the munitions expended in the Middle East may be harder to replace because of geopolitics and export restrictions that deliberately deny the US and its allies access to mature supply chains originating in China.
China’s Global Economic Warfare Creates Bottlenecks
China’s mineral dominance is best known in the area of rare earth minerals and the magnets that China once exported. China’s decision to restrict exports of seven rare earths with “dual use” military applications has impacted defense manufacturing across the world in everything from space systems to submarines to stealth fighters. China’s global dominance in rare earths outstrips the mining and processing capability of other states by massive margins: China mines 70% of the rare earths in the global supply chain, conducts 90% of the processing, and 93% of the manufacturing. Rebuilding depleted stocks of missiles and electronics that employ rare earths is impaired by the US’s lack of a domestic mining industry and processing capability capable of competing on that scale.
Other restricted metal exports demonstrate China’s far-reaching control over global metals supplies. One example is tungsten, exports of which China has restricted since 2025 on security grounds. China controls 80% of the world’s supply, driving other nations to seek ways to reduce their dependence on China. The metal is used for armor-piercing munitions, armor plate, missiles, aircraft, aerospace technologies, fuzes, communications, and directed energy weapons. However the US lacks domestic mining and production capability at China’s scale. China has also imposed dual use export restrictions on indium (radar and targeting systems components), antimony (munitions), beryllium (missiles) and tellurium (armor) to ensure these minerals are not used for defense applications. China’s choice of economic warfare to slow production and rearmament by global competitors is a reflection of how China employs its dominance in strategic metals mining, extraction, and production to force competitors to use lower quality sources of supply or reduce their production of modern weapons systems.
Competition for tungsten and other strategic metals will also increase because of US policy decisions. The 2022 REEShore Act prohibits Chinese mineral imports in military equipment forcing US domestic refiners seek alternatives like scrap and recycled material while the US fights munitions-intensive wars. The added pressure of European manufacturers seeking tungsten for their rearmament program places non-Chinese sources of tungsten into a competition paradigm that the US and allies must deconflict. The competition for tungsten will increase as defense demands increase globally.
Tungsten isn’t the only metal for which there is an increasing demand across global defense sectors. Legacy munitions require steel for artillery and mortar shell bodies; bullets have brass cartridge cases that depend on copper and zinc. Copper, which is used in a wide array of munitions, is a distinctly omnipresent metal. China dominates the processing of these metals and has controlling interests in many of the world’s mines and has been stockpiling minerals for decades. An example of how China is preserving domestic copper production while securing dominant global access is its April 2026 agreement to develop Ecuador’s gold and copper deposits. China now has majority control over one of the world’s largest undeveloped gold projects and Ecuador’s first large-scale industrial copper mine on the Pacific coast. China has gained a future source of materials necessary for a range of defense and commercial programs in the US backyard.
Rearming the US and allies demands strong global supply chains and aggressive outreach to commercial suppliers. Due to its established global position and willingness to impair competitor access to strategic materials through economic warfare, China is able to disrupt those chains by preventing access to markets through right of first refusal agreements like those in Kazakhstan, various African countries, and Brazil. China can collapse mining sectors by undercutting economic competitors and forcing mining companies out of business, flooding markets, price fixing, and secret agreements for state owned enterprises. By driving out industry competitors and blocking competitor access to in-demand metals and minerals, China establishes conditions that ensure strong supply chains, stockpiles, and sustained business that centralize global expertise in processing and manufacturing for an array of critical minerals. China doesn’t have to scale up and build new plants to reach wartime footing. It is already there.
China will not have to create new processing plants to feed munitions manufacturers and weapons plants. China’s real strength lies in processing critical minerals: China refines 73% of the world’s cobalt, 68% of its nickel, 59% of lithium, and 40% of copper. China’s supply chain dominance also has additional dimensions that Western companies lack. Aside from extensive metal and mineral access in Sub-Saharan Africa, China pulls resources from Central Asia through the network of rails and ports built with Belt and Road Initiative funding. Like armies moving on interior lines, China can draw upon countries in its immediate geographical vicinity for many of its military production needs unlike the US which must import most of its strategic metals and minerals necessary for manufacturing munitions and materiel.
The reality of modern war also places semi-conductor chips and their material needs in a place of primacy for weapons. Further, the various metals needed for chips are also part of the new drone warfare continuum. New generations of more capable chips and drones require a mix of minerals and metals, most of which are not readily available in the US: gallium, germanium, palladium, arsenic, iridium, copper and cobalt. Modern military systems also need lithium, nickel and manganese. It’s not a small consideration when US weapons systems also need access to antimony, gallium, germanium, tungsten or tellurium. The dominant producer of almost all of the afore mentioned metals is China. China’s export control policy and concentration on resource processing has gained it strategic advantages for semiconductors, communications, optics, lasers, and space applications through its control of 99% of the world’s gallium and germanium production. As China and the US fight over global semiconductor dominance and both accelerate the need for semiconductors for advanced weapons systems and growing families of drones, the competition for strategic metals will shape global diplomatic and economic engagements.
US Efforts to Develop Supply Chain Resilience at Home and Abroad
US-led solutions are in the works, but they will take time. Having access to raw resources is not the same as having production and processing capability, which China has at scale. US efforts in Africa with the Democratic Republic of the Congo could gain the US the same sort of right of first refusal in the state’s Gecamines sites that China enjoys. Rare Earths deals with Ukraine, Brazil, and Australia promise new sources for rare earths for the US supply chain.
However, the US processing capacity is far below defense requirements. US domestic suppliers have produced only 300 metric tons against a domestic demand of 48,000 metric tons. By the end of 2026 the capacity is expected to rise but only to 5,000 metric tons. Despite the 2026 deadline to stop importing minerals from China, US domestic manufacturers are not ready to meet domestic needs.
The Trump administration is investing in domestic mines and companies, but often with a single company in each sector of mining and production. Addressing China’s dumping and price fixing, the US government is working to incentivize domestic mines and producers with minimum price floor contracts to help guarantee prices for rare earths and mine to manufacturer pipelines for rare earths products destined for generators and motors. The Pentagon is also funding for domestic mining and smelting of antimony, tungsten, and cobalt, with refining in the US and Mexico. The Department of Commerce is augmenting DoD programs with additional rare earths programs that are funding mining and refining 15 of 17 rare earths through a US company. However, these efforts take time. To meet immediate needs and provide the materials needed by US defense manufacturers additional initiatives are needed.
In February 2026 the Trump administration launched Project Vault to stockpile critical minerals in the US. The effort to secure supplies is complicated by a lack of domestic sources and a need to act ahead of any perceived disruptions to the global supply chain. That may include looking to China for stockpile needs. In the interim, recycling could bring some relief, especially if China should impose additional costs through further export restrictions or price manipulations.
Another solution to address shortages of critical minerals and strategic metals has been initiated at four US Army bases. Through the US Army’s Strategic Capital Initiatives program the Army is partnering with civilian businesses to meet the requirements of its six pillar strategy: energy resilience, modernization of the industrial base, strengthening logistics and supply chains, advanced manufacturing, real assets utilization, and critical minerals development. The bases will host civilian small critical-minerals refineries on the selected bases, in order to secure defense supply chains and reduce reliance on China for weapons, batteries and manufacturing materials. The decision to use military land makes the initiative more agile in the face of strategic requirements. Instead of the lengthy approval process for plants and plans, the Department of Defense is able to partner with four companies to meet needs for batteries (lithium), armor (boron), rare earths (high temperature magnets), and graphite (wide defense applications).
However, with many other alternatives and agreements, accessing and employing the products of these initiatives will take time and will not impact immediate munitions and manufacturing requirements. Looking to allies for assistance could be a solution, but it is one that comes with caveats and considerations that may prove difficult to transform into quick gains. The United States, meanwhile, has struggled to adapt. Its approach – prioritizing transparency, private-sector involvement, and environmental standards – has left it at a disadvantage. U.S. investments, often channeled through agencies like the Development Finance Corporation and Export-Import Bank, cannot match the speed, flexibility, or risk tolerance of Chinese state-backed cutouts. U.S. law restricts Defense Production Act grants to a handful of allied countries, leaving the Pentagon unable to directly support mineral projects in the regions where Chinese influence is strongest. Even innovative proposals, such as leveraging U.S. arms sales and security assistance to secure ROFR mineral agreements with non-allied governments, face significant hurdles. Local governments often prefer the deals offered by Chinese shell companies, and U.S. oversight requirements can slow negotiations to a crawl. Meanwhile, the U.S. defense industrial base remains acutely vulnerable to supply disruptions, with over 95% of rare earth demand and 94% of bismuth imports coming from China.
The policy implications are stark:
- China’s dominance over critical minerals could hinder the U.S.’s ability to respond militarily to a Chinese invasion of Taiwan, as any action might risk further restrictions on essential materials needed for U.S. defense;
- The Department of Defense currently lacks policies to secure mineral supplies from non-allied partner countries and is restricted from awarding Defense Production Act grants to projects outside the United States, Canada, Australia, and the United Kingdom. Even if Congress were to expand the list of eligible countries, investment in prospective commercial projects does not guarantee production or continued access, as projects face significant technical, financial, and governmental risks; and
- Moreover, even if the U.S. were to secure ROFR agreements, the administration could still prioritize allocating funds to domestic projects, given the political imperative to onshore supply chains.
To compete, the U.S. must expand the list of countries eligible for Defense Production Act grants, develop its own network of trusted intermediaries and joint ventures, condition security assistance and arms sales on mineral access with streamlined approval processes, invest in domestic and allied mineral processing capacity, and push for international transparency standards that expose shell company ownership and shadow contracts. Without the ability to match China’s flexibility, risk tolerance, and willingness to operate in the gray zones of global commerce, U.S. efforts will remain hamstrung.
The consequences of inaction are becoming clearer by the day. As China tightens its grip on the world’s mineral supply chains, the risks to U.S. national security, economic competitiveness, and technological leadership grow ever more acute. The Pentagon’s own 2023 National Defense Industrial Strategy mentions “minerals” and “rare earth elements” only four times in more than 22,000 words, a telling sign of how far the issue has flown under the radar. Yet the stakes could not be higher. The New Lines Institute’s report “Materiel for Minerals: How the U.S. Can Leverage Security Assistance to Secure Supply Chains,” notes that “The United States imports, largely from China, more than 95% of its demand for rare earth elements, which are used in DDG-51 Aegis destroyers, F-35 Lightning aircraft, and other advanced weapons systems. This dependence leaves the U.S. defense industrial base vulnerable to supply chain disruptions, whether caused by export controls, civil unrest, or natural disasters.”
For the U.S., the path forward is fraught with challenges. The Materiel for Minerals report by Jahara “Franky” Matisek, Morgan D. Bazilian, and Gregory Wischer proposes a bold new approach: leveraging U.S. security assistance, military cooperation, and foreign military sales to secure ROFR offtake agreements for minerals in exchange for arms and training. This “materiel-for-minerals” strategy would give the Department of Defense the right, but not the obligation, to buy specific volumes of minerals at market prices, providing a buffer supply that could be tapped during supply cutoffs or shortages. This strategy now has precedent: Earlier this year, the Trump administration negotiated a minerals deal with Ukraine in exchange for continued U.S. security assistance.
But even this approach has limits. The U.S. can award Defense Production Act grants only to projects in the United States, Canada, Australia, and the United Kingdom. Prospective projects in non-allied countries face high risks of stoppage, expropriation, or government disputes, as seen in Mozambique, New Caledonia, and Panama. Even in allied countries, new mineral projects confront long lead times and significant risks in commissioning and ramping up production. S&P Global estimates that the time from first discovery to first production for a mining project in the United States is 29 years. For 31 of the 50 minerals on the U.S. critical minerals list, imports are used to meet over 50% of consumption; for another 12, imports supply 100%.
For now, the world’s mineral supply chains remain a battleground in the great power competition of the 21st century. The silent cartel moves quietly, but its impact is felt everywhere – from the mines of Congo to the factories of Shenzhen, from the corridors of Washington to the ports of Jakarta and Almaty. The question is not whether the U.S. and its allies can match China’s playbook but whether they are willing to play the game at all
Local Supply Chain Impacts Affect US Allies and US Manufacturing
Chinese export bans and restrictions are economic weapons that China uses to shape the competition continuum in the Pacific. Among America’s allies, South Korea and Japan have been hit hard by China’s export bans on strategic metals and rare earths magnets—Japan because China prohibits exports believed to be destined for Japanese military applications, and South Korea because of its support of US policies. China has used economic warfare against both nations as punishment for political decisions that go against China’s regional security goals. In 2023 South Korea, one of China’s closest trading partners, suffered sweeping trade bans on germanium and gallium, and fines for choosing to field the Terminal High Altitude Area Defense (THAAD) air defense missile. However, Korea has joined with the US in efforts to revitalize US mines and production facilities for zinc (and its by product germanium). Both countries will benefit from this effort. The US and South Korea along with Japan and thirteen non-Chinese partners formed the Minerals Security Partnership in April 2024. It has grown to thirty critical mineral-producing and -consuming countries dedicated to addressing global supply chain vulnerabilities while promoting sustainable mining, processing, and recycling of critical minerals such as lithium, cobalt, nickel, manganese, graphite, rare earth elements, and copper. Japan has also taken measures to generate domestic rare earths magnet mining and processing to ensure it can mitigate the effects of Chinese export restrictions.
In January 2026 following comments made by Japan’s Prime Minister Sanae Takaichi that a Chinese military operation against Taiwan would be an existential threat to Japan and could trigger a collective self-defense action, China restricted exports of “dual use items” to Japanese defense industry firms and the Japanese military. Japan, despite the potential costs in undersea mining initiated an experiment in retrieving rare earths from deep sea med beds with the aim of mining 350 tons annually. Although not intended to replace Chinese rare earths, the new venture could build Japanese resilience and garner new sources of rare earths.
Supply chains can also be affected by events unrelated to China’s regional role. The US’s support for Israel is complicating rare earths extraction in Malaysia where the Muslim population’s support for Palestine is driving questions about the Australian company Lynas’s links to the Pentagon. Lynas’s situation is not only a regional mining concern. Lynas is one of the US’s largest rare earths partners for mining and processing in the US and Australia. Australian interests must be considered as the US and Australia enter closer cooperation for supply chain security. In March 2026 the US and Australia entered into an agreement designed to support defense, manufacturing and energy supply chains and help develop a resilient critical minerals sector. The agreement concerns development and security of supply chains for gallium, rare earths mining and refining, nickel, graphite, magnesium, and tungsten. Politics and the necessity for diplomatic maneuvering will continue to be an aspect of global competition for the strategic metals and minerals that defense manufacturers need to create the military instruments of national power.
Future Considerations
April 2027 is considered by many as the opening window for potential Chinese military action against Taiwan. It is also the year in which President Xi Jinping will again be considered for reelection as China’s leader. As planners examine the munitions expenditure rates in the Persian Gulf and the performance of US weapons systems against Iranian missiles and drones, a reckoning is coming with regards to the US ability to manufacture munitions in quantity and at a low enough cost to allow for rapid restocking of expended missiles. This is concurrent with plans to expand the number and types of drones in the US armed forces arsenal, construction of AI data centers, and all within a system that by January 2027 is mandated to no longer import Chinese strategic metals and minerals. The challenge is significant. Over 78% of US weapons systems use components derived from materials sourced in China. 80,000 individual parts subject to US regulations. Eight percent of Department of Defense supply chains have at least one Chinese vendor. The challenges facing rearmament start at home with an under resourced and underdeveloped industrial base incapable of meeting its material needs without Chinese materials. The supply chains are being built but that will take time. Allies can help but they have their own needs. As China rattles its saber in the South China Sea and punitively levies bans, restrictions, and export requirements in order to coerce compliance, the US and its allies are working to refill their stocks of munitions.
War in the Middle East has provided lessons for the US military and its industrial base on cost and expenditure analysis. The profligate use of advanced interceptors against low-cost drones has more than a monetary tag attached. Each Patriot used to destroy a drone is a missile that won’t be replaced quickly, and in the near future may be needed in the Pacific. Each AN/TPY-2 loss like those alleged in Jordan and the United Arab Emirates represents asymmetrical warfare at its most effective. Destroying difficult to replace radars render both the missile and weapon system impotent. Replacement will be costly and take years. Replacing such systems will be difficult if the necessary materials are constrained by a Chinese-dominated supply chain bottleneck. The potential effects of a THAAD system loss ripple beyond current operations and will affect options available to commanders in the Pacific where THAAD may be the key system to prevent a potential Chinese strike on strategic targets like Guam or airbases in Japan.
The final adjudicator in the argument between production expansion and magazine depth may not be cost or even production line expansion. It may be the supply chain that can guarantee resilience against economic warfare at the source where ore is mined and deals struck. The replacing of expended munitions may depend heavily on economic and diplomatic efforts and binding agreements in an age of sanctions and tariffs. Ultimately commanders should be prepared to dig deep into their pockets and be prepared to employ fewer exquisite weapons and plan accordingly. Ideal plans that start with less than full magazines may be derailed by losses enroute. Perhaps exercises and wargames should start from the perspective of US forces operating from a reduced magazine depth or reduced capability in order to encourage alternative approaches to operational dilemmas.
