Modern battlefields rely heavily on drones. Similar to how artillery shells were used in past conflicts, drones are consumed by the thousands daily. Ukraine produced 5 million drones in the past year. Russia launched 805 drones in a single night targeting Ukrainian cities.

Victory in drone warfare isn’t determined by the sophistication of weapons. It’s influenced by the industrial base that can manufacture drones at scale. The production of these drones starts with a vital component: the permanent magnet. Every drone’s motor contains one, and China makes almost all of them.

Efforts to Boost American Production

In June 2025, President Donald Trump issued an executive order directing federal agencies to prioritize American-made drones. This signaled the industrial base to organize efforts around domestic production. Drone acquisition timelines have been shortened from years to months, with vendors competing for production contracts through field evaluations.

The Pentagon’s Drone Dominance Program plans to invest $1 billion, purchasing more than 200,000 drones by 2027, escalating to 340,000 systems by 2028. Achieving these numbers requires a strong supply chain, especially for permanent magnets. The U.S. uses about 50,000 tons of permanent magnets annually, with most being imported from China.

The magnet isn’t smart; it carries no data and can’t surveil. It simply generates the magnetic field essential for lift and torque. Without consistent supply, drone production halts.

Challenges in Scaling Production

T.S. Allen, who led the Pentagon’s rapid drone fielding program, stated the importance of scaling drone production. He highlighted the need for batteries and critical components produced at scale. A crucial challenge is that processing of vital minerals mainly occurs in China and Malaysia.

China’s control over rare-earth elements was built through state subsidies and below-cost pricing. This resulted in the bankruptcy of Western competitors, allowing China to manipulate prices and impose export restrictions. Rare earth prices can fluctuate drastically. In contrast, iron and nitrogen, used to create iron nitride permanent magnets, have stable costs due to being globally traded commodities without strategic export controls.

China’s Export Restrictions

In April 2025, China imposed export licensing for seven rare earth elements and their magnets. This affected materials directly used in defense and industrial supply chains. Only a minority of export license applications received approval.

Ukraine faced similar challenges when attempting local motor production. Despite having mineral reserves, it lacks the infrastructure to produce magnets at scale.

Iron Nitride as a Solution

Allen estimated production needs to be ten times larger than what the Replicator program achieved, aiming for thousands of drones. Large-scale productions test supply chains in unique ways. Iron nitride magnets are emerging in various sectors. Iron and nitrogen inputs carry no export risks or embargo threats. These magnets perform well at high temperatures and reduced weight, crucial for drone motor design.

American university research developed the science behind iron nitride, and manufacturers are scaling production to meet the demand. Incorporating iron nitride into the drone supply chain enhances proven technology where significant stakes exist.

The Production Contest in Warfare

Attrition warfare is fundamentally a competition in production. The side maintaining production eventually triumphs. Supply chains are vulnerable to disruptions and controls. Every drone motor component needs a reliable source unaffected by adversaries. Currently, magnets lack such a source.

Jonathan Rowntree, CEO of Niron Magnetics, emphasizes the need for rare-earth-free permanent magnets developed in the U.S. by his company.