Part 2/3: Navigating China's Rare Earth Export Controls - Reuse and Recycle
Plus The Headlines, Money Matters, and Recommended Reading (Week 20 2025: 12 - 18 May)
Welcome to this week’s Beyond Line of Sight!
This is part 2 of 3 for breakdown of strategies to navigate China’s rare earth elements (REEs) export controls. Last week, in part 1, we looked at supply chain diversification. you can read it again here:
This week, let’s look at “reuse and recycle”.
Reuse and Recycle
Once you’ve taken supply chain diversification as far as possible, reusing and recycling materials introduced in the supply chain make it more efficient.
For example, permanent magnets use neodymium (a REE) and are often used for electric motors and electronic parts. Being able to reuse components can ease supply chain pressure. Refurbished components can be used for non-critical applications, and new components can be used for critical applications.
In practice, this means 3 things.
#1 Salvage for reuse and recycle
When a drone is retired or at the end of life, salvage its motors, sensors and power electronics. These components can be tested for performance. If performance and condition meets a set criteria, it can be refurbished for reuse in repairs. By reconditioning bearings, re-coating magnets if needed, and balancing rotors, these “used” motors can fly again.
#2 Work with recycling plants
Salvaged components that don’t meet a set criteria can be sent for recycling. Recycled materials may not have the same level of performance, but still good enough for non-critical applications. Working with recycling plants as part of the supply chain is important for this.
#3 Design for modularity
Drones and drone components can be built for modularity. For example, motors can be designed to be easy to disassemble so that magnets can be salvaged and replaced easily. This makes reuse and recycle easier, cheaper, and more attractive. REEs are not lost, but salvaged and the supply chain gets more value out of them.
The Challenge
Challenges exist with reuse and recycling. Degradation and miniaturisation of components makes it difficult to disassemble components, and extracting REEs from alloys is not efficient.
The Opportunity
Reuse and Recycling is an opportunity for building better, more sustainable supply chains. It is bigger than REEs. Today's drone industry is not built with reusing and recycling in mind. However, initiatives like this and this do exist, that the drone industry should tap into and leverage.
The Headlines
Defence and Security
The UK has delivered eight innovative "FrankenSAM" Raven air defense systems to Ukraine, combining ASRAAM missiles with Supacat trucks to counter drones and cruise missiles up to 15 miles away, with five more units on the way.
Ukraine has discovered that Russia’s new Banderol cruise missile contains over 20 foreign parts, including 10 American chips. Sanctions are being bypassed through third countries like Armenia and the UAE.
To simplify maintenance and boost frontline readiness, the U.S. Air Force is standardising parts across its Collaborative Combat Aircraft fleet.
Greece will deploy two U.S.-made V-BAT drones—donated by the Laskaridis Foundation—to enhance border surveillance.
The UK’s RAF has tested launching FPV drones from a Chinook helicopter in the "Hornet’s Nest" trial.
UK’s Evolve Dynamics has unveiled two ISR-focused drones—Foxe and Wolfe—offering rapid deployment, weather resistance, and long-endurance surveillance options for harsh field conditions.
AV (formerly AeroVironment) introduced the Titan 4—a compact, powerful RF-based C-UAS system capable of neutralising small drones in diverse operations.
Kratos is developing two new affordable loyal wingman drones, Apollo and Athena, tailored for NATO allies with modular designs supporting electronic warfare, sensors, and weapons payloads under $5 million each.
Australia’s Mission Syracuse aims to develop sovereign counter-drone systems by 2027, supporting its National Defence Strategy through a two-stage procurement process.
Policy and Regulations
The Trump Administration advanced BVLOS and Section 2209 drone regulations to the White House. The BVLOS rule would simplify approvals for long-range drone operations, and Section 2209 proposes restricted airspace around critical infrastructure.
Partnerships
Pierce Aerospace and MITRE have teamed up to advance Remote ID technology by testing real-time drone identification systems at the MITRE National Range.
Altitude Angel and NexG CSA have partnered to deliver drone traffic management services across Malaysia.
Money Matters
Contracts
WB Group: Poland to acquire nearly 10,000 Warmate loitering munitions to support decentralised, precision-focused defense operations.
AV: The Dutch Ministry of Defence is upgrading its Puma AE drones to the Block III variant with VTOL and improved sensor performance.
Quantum Systems: signed two contracts with Spain to supply 182 Vector drones and several Twister systems for ISR operations.
General Atomics: secured an $11 million contract to support the UK’s MQ-9B Protector drones through 2028.
Investment and M&A
Arrive AI has gone public on NASDAQ as ARAI, aiming to scale its AI-powered last-mile delivery platform using drones and robotics. With $52 million in funding, the company plans to expand its autonomous logistics network across the U.S.
Recommended Reading this Week
ABOUT THE AUTHOR
This newsletter is authored by Adit Shah, a UK-based business and strategy consultant specialising in aerospace, defense, and space sectors. For contact, please get in touch via LinkedIn.