The strategic agreement between the United States and Saudi Arabia concerning rare earth elements, a cornerstone of American efforts to diversify supply chains away from China, is encountering significant geopolitical challenges. Escalating tensions involving Iran have cast a shadow over the implementation of this landmark deal, raising questions about its future stability and the broader implications for global resource security. Access to these critical materials, particularly heavy rare earths, is deemed essential for the United States to maintain its technological and military edge in an era where China commands a dominant position in global supply chains.
The fragility of U.S. dependence on foreign sources was starkly illustrated when Beijing signaled its intention to tighten export controls in 2025. Rare earth elements are indispensable components for advanced defense systems, including the F-35 fighter jet, Virginia- and Columbia-class submarines, Tomahawk missiles, and sophisticated radar technologies. The sheer volume required for these assets underscores the potential impact of supply disruptions on American military readiness. An F-35 fighter jet, for instance, necessitates approximately 410 kilograms of rare earths, while a Virginia-class submarine requires up to 4,100 kilograms, according to figures cited by the Council on Foreign Relations.
Historically, the United States led global rare earth production until the mid-1990s. China subsequently surpassed competitors through a combination of aggressive industrial policies and cost advantages. Information reaching TahirRihat.com suggests that the U.S. remains entirely dependent on imports for several critical minerals and significantly reliant on many more. Projections indicate that by 2030, the U.S. share of the global market could dwindle to less than 2%, while China’s market share may ascend to 31%. It was in direct response to this growing imbalance that former President Donald Trump initiated policies aimed at revitalizing domestic production capacity and diversifying supply chains.
For Saudi Arabia, the development of its rare earth sector is a central tenet of the ambitious economic transformation envisioned under Vision 2030, spearheaded by Crown Prince Mohammed bin Salman. The Kingdom is actively repositioning its mining industry as a vital pillar of economic diversification, thereby reducing its historical dependence on oil revenues. The progress in this sector has been notably swift. Exploration investments surpassed $140 million in 2024, and the number of mining licenses issued surged from 224 in 2015 to over 800 by 2023. The estimated value of Saudi Arabia’s mineral reserves has nearly doubled, from $1.3 trillion in 2016 to $2.5 trillion in 2024, a growth attributed to the discovery and prioritization of high-value resources, including rare earth elements. The Kingdom’s objective is to become one of the world’s top seven mineral processors by 2030, a strategic shift that could significantly reshape global supply chains and diminish China’s current dominance.
This convergence of American strategic needs and Saudi economic ambitions culminated in a significant agreement on November 19, 2025. MP Materials, a key player in the U.S. rare earth industry, partnered with the U.S. government and the Saudi Arabian Mining Company (Maaden) to establish the Middle East’s first rare earth processing facility. This joint venture is structured to balance the interests of all parties involved, with MP Materials and the U.S. holding up to a 49% equity stake, while Maaden retains a majority stake of at least 51%. The arrangement leverages American expertise in separation and refining processes with Saudi Arabia’s inherent structural advantages, such as low-cost energy, modern infrastructure, and substantial untapped mineral reserves.
Among these reserves, the Jabal Sayid deposit is highlighted as one of the world’s most valuable, containing significant quantities of both heavy and light rare earth elements. Until domestic extraction capabilities are fully scaled up, the planned facility is expected to process imported ore, including supplies sourced from Brazil, which possesses the largest rare earth reserves outside of China. This strategic sourcing highlights the global nature of the rare earth supply chain and the collaborative approach being adopted to circumvent existing bottlenecks.
MP Materials currently operates as the sole fully integrated rare earth producer in the United States, managing the historic Mountain Pass mine. This site, once a global leader, ceased operations in 2002 due to environmental concerns and competitive pressures from China, a decision that is now widely regarded as a strategic misstep. Today, Mountain Pass accounts for approximately 15% of global rare earth production, and the company is undertaking investments exceeding $1 billion to expand its capacity and rebuild domestic supply chains. In contrast, Maaden represents the scale and ambition of Saudi Arabia’s burgeoning mining sector. With revenues reaching $8.7 billion in 2024, Maaden is recognized as one of the fastest-growing mining companies globally. Its investments span a diverse range of minerals, including phosphates, gold, and fertilizers, and it has established major partnerships with international firms such as Mosaic and SABIC.
Saudi Arabia’s comparative advantages in this sector are particularly pronounced in energy and regulatory efficiency. Rare earth processing is an exceptionally energy-intensive undertaking, requiring up to 13 times more energy than the extraction phase. The Kingdom’s abundant and low-cost energy resources provide a decisive competitive edge. Equally significant is its streamlined regulatory environment, where mining permits can typically be secured within 180 days, a stark contrast to the 7–10 years often required in the United States. Furthermore, Saudi Arabia’s geographical location positions it advantageously, situated in proximity to mineral-rich African countries like Malawi, Namibia, South Africa, and Uganda. This strategic positioning enables the Kingdom to emerge as a global processing hub, effectively bridging the gap between resource extraction sites and industrial demand centers.
Despite the compelling economic rationale underpinning the U.S.-Saudi agreement, the initiative is not without its geopolitical challenges. The recent escalation of tensions involving the United States and Israel against Iran has heightened concerns about regional instability, particularly concerning maritime trade routes in the Strait of Hormuz, a critical chokepoint for global energy and resource flows. This volatile geopolitical landscape could potentially disrupt the transportation of raw materials and processed elements, thereby impacting the operational viability and timeline of the rare earth processing facility. The success of the agreement will likely depend on the ability of both nations to navigate these complex regional dynamics and ensure the security of critical supply lines.
Tahir Rihat (also known as Tahir Bilal) is an independent journalist, activist, and digital media professional from the Chenab Valley of Jammu and Kashmir, India. He is best known for his work as the Online Editor at The Chenab Times.