The United States faces a critical national security vulnerability stemming from its near-total dependence on foreign sources, predominantly China, for heavy rare earth elements (HREEs) essential to advanced defense systems and emerging clean energy technologies. Despite the strategic importance of HREEs such as dysprosium and terbium—critical inputs for precision-guided munitions, advanced fighter aircraft, satellite systems, and permanent magnets—the current National Defense Stockpile provides only approximately 30 days of supply coverage, far below the levels maintained by allied nations and recommended by international best practices. This quantitative study developed and validated a comprehensive stochastic optimization framework to determine optimal HREE stockpile levels that balance acquisition costs, holding costs, and shortage costs under conditions of supply uncertainty. Employing a two-stage stochastic programming model integrated with Monte Carlo simulation (n = 10, 000 iterations), the research analyzed four supply disruption scenarios ranging from baseline conditions to severe disruption events. Data were compiled from authoritative sources including the U. S. Geological Survey, International Energy Agency, and United Nations Comtrade database spanning a 15-year historical period (2010–2024). The optimization model identified optimal stockpile levels of 500 metric tons of dysprosium and 150 metric tons of terbium, requiring an initial acquisition investment of approximately 370 million. These levels would provide 608–730 days of supply coverage compared to the current 30-day threshold, achieving a 96% defense continuity rate and 75. 5% probability of zero shortage events across the 10-year planning horizon. Sensitivity analysis revealed the shortage cost multiplier as the most influential parameter, while Pareto frontier analysis illuminated the cost-security trade-off frontier for policy decision-making. The findings demonstrate a 22-fold gap between optimal and current stockpile levels, providing quantitative justification for immediate policy intervention to enhance U. S. critical mineral security. Keywords: rare earth elements, strategic stockpile, national security, stochastic optimization, supply chain risk, heavy rare earth elements, dysprosium, terbium, Monte Carlo simulation, defense industrial base
Laszlo Pokorny (Sun,) studied this question.