Tuesday, June 02, 2026

 

USA Rare Earth selects South Carolina for rare earth metals and magnet plant


Round Top rare earths deposit in Texas. (Image courtesy of Texas Mineral Resources.)

USA Rare Earth (Nasdaq: USAR) announced Tuesday it will invest $1.2 billion in a new magnet manufacturing and refined metals operation in Cherokee County, South Carolina.  

The project is expected to significantly expand domestic production capacity for sintered neodymium-iron-boron (NdFeB) permanent magnets and the refined rare earth metals from which they are made, the company said.  

Located in the Bailey Industrial Park in Blacksburg, the build will be the company’s third in the US – it also has a facility in Stillwater, Oklahoma, which commissioned its first commercial production line in March, and a separation and processing facility in Wheat Ridge, Colorado.  

USA Rare Earth is betting on vertically integrated operations stretching from mining to magnet production will help position it as a cornerstone supplier to aerospace, defence, semiconductors, energy and data centre industries. 

The Stillwater and Blacksburg operations will form the magnet manufacturing centerpiece of USA Rare Earth’s integrated, mine to magnet value chain, which spans the Round Top heavy rare earth mining and processing project in Sierra Blanca, Texas,   and the planned acquisition of the Serra Verde mining and processing operation in Goiás, Brazil; the LCM metal and alloy facility in Cheshire, United Kingdom; and a planned metallization and alloy facility in Lacq, France. 

Once online, the Blacksburg facility is targeting production capacity of 6,400 metric tons per annum (tpa) of NdFeB rare earth magnets and 5,000 tpa of strip-cast, metal and alloy. Combined with the planned expansion at the company’s Stillwater facility, USAR expects total domestic production capacity to reach 10,000 tpa of NdFeB rare earth magnets and 10,000 tpa of heavy rare earth strip-cast, metal and alloy.  

Engineering work and equipment procurement for the Blacksburg facility is underway, with site work expected to commence in the coming months and commissioning targeted to begin in 2028, the company said.  


“Cherokee County is the next critical link in the rare earth and magnet value chain we’re building across the United States, the United Kingdom, Europe and around the globe,” USA Rare Earth CEO Barbara Humpton said in a news release

“South Carolina offered the workforce, the infrastructure and the partners we needed to move quickly. With this investment, we’re bringing home the advanced manufacturing capabilities that America and its allies depend on, from the factory floor to the front lines,” Humpton said.  


China  dominates the global rare earth market, controlling the vast majority of extraction, processing, and manufacturing. Western governments consider this monopoly a significant national security and supply chain risk, and are actively subsidizing alternative projects to counter it. 

In May, the U.S. Department of Energy selected USA Rare Earth to receive up to $19.3 million for a pilot rare earth processing project aimed at boosting domestic supply chains. 

Under scrutiny  

Brazil’s antitrust watchdog has opened an investigation into the proposed Serra Verde buy, which would give USA Rare Earth control of Brazil’s only producing rare earth mine. The operation, which entered commercial production two years ago, is one of the few outside China capable of large-scale heavy rare earth production. Serra Verde has said the mine could account for half of global ex-China heavy rare earth output by next year. 

USAR has also faced scrutiny from U.S. lawmakers, who say the structure of Washington’s investment could give the government “highly concerning” leverage over the company while also boosting U.S. Commerce Secretary Howard Lutnick’s family-run investment firm. 

The Commerce Department’s CHIPS Program Office in January signed a non-binding letter of intent to provide up to $1.58 billion in funding to USA Rare Earth — including a $277 million grant and a $1.3 billion loan — in exchange for an equity stake of between 8% and 16%.

Last week, rival rare earth miner MP Materials (NYSE: MP) filed a lawsuit against USAR alleging that its rare earth mining rival stole its proprietary magnet technology through an ex-employee.  

USA Rare Earth denied the allegations, saying MP’s lawsuit “has misrepresented our company, our culture, and our people,” and that it would defend itself against the claims and respond “appropriately.” 

AUSTRALIA

Miners urge gov’t aid to challenge China’s rare earth dominance


Newly appointed Minerals Council of Australia chair Amanda Lacaze. (Photo: Kristie Batten.)

Government support for rare earths projects will remain necessary for years as Western countries work to counter China’s long-standing dominance of the sector, industry leaders said at the AFR Mining Summit in Perth last week.

There has been growing debate over state intervention in critical minerals markets, but speakers agreed rare earths remain a special case because of decades of market distortion driven by Chinese supply and pricing influence.

“The rare earths market has been a distorted market for decades, and so the government intervention that we have seen by the US, Japanese and Australian governments actually is more about correcting that dysfunction,” outgoing Lynas Rare Earths (ASX: LYC) CEO and newly appointed Minerals Council of Australia chair Amanda Lacaze said in January.

“Government participation in addressing this dysfunction is ultimately good for the market.”

The comments highlight how governments are increasingly shaping critical minerals supply chains as Western nations seek to build alternative sources of strategic materials used in electric vehicles, defence systems and advanced manufacturing.

Floor prices a game changer

Arafura Rare Earths (ASX: ARU) managing director Darryl Cuzzubbo credited the US government’s investment in MP Materials (NYSE: MP) and the introduction of a rare earths floor price with accelerating the sector’s development outside China.

“But they’re kind of learning as they go, so it’s a bit of a wild ride,” he said. “Without that US leadership, I’m not sure we’d be in the sort of fast-paced transition that we are in.”

Bank of America head of natural resources equity research Australia Kate McCutcheon said floor prices had removed China’s incentive to flood the market and drive down prices.

“When we have really big markets like steel or iron, we can use tools like tariffs, which is what we’ve seen in the US and Europe, to decouple that supply chain,” she said.

“Whereas, in smaller markets like rare earths, what we’ve seen is money really helps that problem, and we’ve seen those floor prices have actually forced that China price in line with the ex-China price for rare earths,” McCutcheon said. “In the fullness of time, will government support be needed? It’s here for the foreseeable future.”

BlackRock portfolio manager Olivia Markham said government involvement extended beyond direct funding to permitting, infrastructure and maintaining stable fiscal regimes.

“Governments are getting much more involved in this entire space,” she said.

The risk

Rowena Smith, CEO of Australian Strategic Materials (ASX: ASM), currently subject to a $300 million takeover by Energy Fuels (TSX: EFR), said that government support should be reserved for projects capable of standing on their own commercially.

“You don’t want to subsidize a project that’s never going to be economic to operate,” she said.

Cuzzubbo agreed intervention was needed to address market failures but warned against creating permanent support mechanisms that distort competition.

Last month, Arafura approved development of its $1.9 billion Nolans rare earths project in the Northern Territory, backed by financing from nine lenders across five countries, most of them government-backed institutions.

“Can you imagine a world where everyone gets a floor price? That is not a functioning market,” Cuzzubbo said. “If everyone gets a floor price, then uneconomic projects will get up.

“You will then flood the market, you’ll push down real prices, and government’s picking up the tab, so the floor price was absolutely essential to circumvent China, but it is not the long-term answer.”

The debate underscores a broader challenge facing governments and industry alike: supporting the emergence of independent rare earths supply chains without creating permanent market distortions. As new projects move toward production, participants increasingly see transparent and liquid pricing mechanisms as the eventual path to a self-sustaining market.

Cuzzubbo and Smith both endorsed the development of independent pricing indices, although they said greater trading volumes would be required to make them credible. In the meantime, Smith argued temporary measures such as floor prices remain necessary to support a growing but still fragile industry.

“We need some sort of scaffold in the interim, and I think floor prices have played an important role,” she said. “We’ve got to be pragmatic about how high this floor price is.

“This comes back to we can’t be supporting and subsidizing projects that are not inherently economic as we establish this emerging alternate supply chain, but for us, we’re excited because that market, whilst it’s small, is growing.”

 

Gold overtakes US Treasuries in global reserve shift: ECB


Stock image by BuabarnCH

Gold has surpassed US Treasuries as the world’s second-largest reserve asset as central banks continue to accumulate bullion and prices remain near record highs.

Bullion accounted for 27% of global central bank reserve assets at the end of 2025, up from 20% a year earlier, according to a European Central Bank report released Tuesday. US Treasuries fell to 22% from 25%, while euro-denominated reserves held steady at 15%.

“Geopolitical tensions continue to drive strong central bank demand for gold,” ECB President Christine Lagarde wrote in the report.

The shift reflects a broader effort by many countries to diversify away from the US dollar, which remains the dominant reserve currency. Those efforts accelerated after Washington froze Russia’s dollar reserves following its 2022 invasion of Ukraine. Despite gold’s rise, dollar-denominated assets still represented the largest share of global reserves at 42%.

The trend carries implications for global financial markets and the international monetary system. With central banks holding more than 36,000 tonnes of gold, reserve stockpiles are approaching levels last seen during the Bretton Woods era, when currencies were tied to the US dollar and the dollar was convertible into gold. 

Industry echo

The ECB is not the first major institution to conclude that gold has overtaken US Treasuries in global reserve holdings. In January, the World Gold Council said the value of gold held by foreign central banks was approaching $4 trillion, exceeding their roughly $3.9 trillion holdings of US Treasuries. The last time foreign institutions held more gold than US government bonds was in 1996.

The ECB said sustained buying by countries including China, Poland, Turkey and India has helped reshape reserve portfolios, while gold’s sharp price appreciation has boosted its share of total reserve assets.

Gold purchases by central banks eased to 850 tonnes in 2025 after three consecutive years of net buying above 1,000 tonnes annually. The ECB said stablecoin issuer Tether was the largest single buyer last year, acquiring more than 100 tonnes. Turkey, meanwhile, sold or loaned 130 tonnes of gold in early 2026 after accumulating 220 tonnes since 2022, marking one of the largest reserve drawdowns in recent years.

The report also highlighted the euro’s growing international role. International debt issuance denominated in euros rose 30% last year to nearly €1 trillion ($1.2 trillion), while foreign investors added a net €850 billion ($990 billion) to euro-area assets, pushing portfolio inflows close to record levels.

 

Glencore’s Cerrejon shutdown deepens pressure on Colombia coal


Cerrejon is one of the world’s largest open-pit coal mines. 
(Image courtesy of Glencore | Cerrejon.)

Glencore’s (LON: GLEN) Cerrejon mine in Colombia, one of the world’s largest open-pit coal mines, suspended mining, rail and port operations in La Guajira province earlier this week after a community blockade cut off coal shipments and fuel supplies, highlighting growing pressures on one of the country’s largest exporters.

Cerrejon declared force majeure on June 1 after protesters blocked its railway line to Puerto Bolívar, preventing the delivery of essential goods and halting coal transport. The company suspended most employment contracts while retaining workers needed for maintenance, environmental controls and other critical functions.

“We reiterate our call for constructive dialogue to bring an end to these actions, which not only affect Cerrejón’s operations but also generate negative impacts on employment, regional development, and the economic stability of La Guajira and Colombia,” the company said.

The shutdown underscores the challenges facing Colombia’s coal industry, which is grappling with declining output, community opposition, regulatory uncertainty and weakening competitiveness despite continued global demand for thermal coal.

Community demands

The blockade began May 23 and remains in place. Community leaders are demanding compliance with constitutional rulings on collective rights and prior consultation, expanded access to water, renewable energy industrialization projects, participation in energy initiatives and new mechanisms for redistributing royalties.

Cerrejón said many of the requests fall outside its responsibilities or have already been addressed through previous consultations and legal processes.

The breadth of the demands suggests the dispute extends beyond the mine itself and reflects wider tensions over development, public services and governance in La Guajira, one of Colombia’s poorest regions.

Years of disruption

The latest shutdown follows a series of disruptions that have increasingly weighed on the operation.

Cerrejón said it has faced nearly 80 blockades this year, most of them linked to protests against government authorities over the lack of basic services in nearby communities rather than disputes with the company. The miner recorded 333 blockades in 2024, equivalent to 135 days of interrupted operations. Last year it reported 201 blockades and nine terrorist attacks that disrupted coal transport for 95 days.

The company has also been navigating uncertainty surrounding a temporary 1% export tax and weakening coal markets. Cerrejón produced 16.8 million tonnes of coal in 2025, down 12% from the previous year. It also announced plans to reduce annual production by between 5 million and 10 million tonnes in response to oversupply in the Atlantic thermal coal market.

The broader sector is facing similar headwinds. Colombia’s coal production fell to 53.9 million tonnes in 2025, the lowest level in two decades, according to the National Federation of Coal Producers.


“While the world secures its energy with coal, Colombia is losing competitiveness and giving up market share,” Fenalcarbón president Carlos Cante said. “Internal factors such as the tax burden, logistics costs, and regulatory uncertainty are slowing production and investment.”

Political backdrop

The suspension comes as investors are increasingly betting on a political shift in Colombia following Sunday’s presidential election.

The peso recorded its strongest daily gain in four years while bonds and stocks rallied after right-wing outsider Abelardo de la Espriella unexpectedly won the first round of voting and emerged as the favourite heading into a June 21 runoff against leftist Ivan Cepeda.

Colombia’s 2054 dollar bonds rose more than four cents on the dollar, the peso gained 3.6% against the U.S. dollar and the benchmark stock index climbed as much as 7.1%. State-owned oil producer Ecopetrol surged nearly 10% intraday on expectations a new administration could support resource development and reverse some of President Gustavo Petro’s energy policies.

De la Espriella, who captured 43.7% of the vote, has pledged to cut taxes, restrain public spending and support business investment. Cepeda, an ally of Petro who won 40.9%, has advocated expanded social spending and opposed measures such as fracking and new oil exploration.

For miners, however, election optimism may not immediately solve the operational challenges on the ground. Cerrejón’s shutdown illustrates how community disputes, infrastructure disruptions and regulatory uncertainty continue to threaten production in one of Latin America’s most important coal-producing regions.

The company and local communities remain far apart on many of the issues driving the blockade. Even if the dispute is resolved quickly, recurring interruptions could continue to weigh on output and investment decisions across Colombia’s mining sector.

Davie Defense Kicks Off $1 Billion Shipyard Revamp at Gulf Copper

Russ Vought (second from left) and Ted Cruz (third from left) break ground at Gulf Copper (Gov. Greg Abbott)

Published Jun 1, 2026 5:30 PM by The Maritime Executive


On Monday, Texas Governor Greg Abbott joined executives from Davie Defense to inaugurate the shipbuilder's modernization drive at Gulf Copper's twin yards in Port Arthur and Galveston. Davie acquired the company and its assets last year in order to compete for government shipbuilding projects, and it is planning to use the new spaces for its contract to construct new Arctic Security Cutters for the U.S. Coast Guard. Other dignitaries present included White House budget chief Russ Vought, Sen. Ted Cruz, and Coast Guard Commandant Adm. Kevin Lunday.

"America has a dire need for more ships. Texas is proud to partner with Davie Defense on this project. These ships will be built in Texas, crewed by Americans, and deployed to defend American sovereignty in the fastest-growing strategic theater on earth: the Arctic," said Gov. Abbott in a statement.

Davie Defense plans to spend $1 billion to increase the capabilities of the two shipyards, among the largest recent investments in American shipbuilding capacity in recent memory. According to Abbott, Texas' pro-business regulatory environment and its relative abundance of skilled workers played a role in Davie's decision to locate its operations in the state.

Davie says that the revamp at Gulf Copper will create 2,400 new jobs and support 7,000 in total throughout the state.



Davie's proposed "icebreaker factory" at Gulf Copper (Davie Defense illustration)

The company holds one of three separate contracts for medium icebreakers for the Coast Guard. Under its portion of the Arctic Security Cutter program, Davie Defense will build two hulls at Helsinki Shipyard, an icebreaker specialist with a fast production rate that is owned by Davie's parent company; it will then build three more at Gulf Copper in Texas. The first Finnish hull will deliver in 2028, and the last Texan hull will commission in 2035.

The other two initial contracts went to Rauma Marine Constructions (for two hulls to be built in Finland) and Bollinger (for four hulls to be built to Rauma's design in Louisiana), and final contracts for these awards will likely be announced soon. The overall procurement plan calls for a total of 11 vessels.

 

Lost in the Small Surface Combatant Wilderness

The future Constellation-class frigate USS Lafayette, one of two hulls still under construction after a downsizing of the series (Fincantieri/USN)
An illustration of the previously-planned Constellation-class frigate USS Lafayette, canceled during the downsizing of the series (Fincantieri/USN)

Published Jun 1, 2026 4:09 PM by CIMSEC

[By Kevin Eyer]

Between January 13 and 15, the 38th Annual Surface Navy Symposium convened in Crystal City, Virginia, offering a detailed look at the state of the surface fleet. Senior leaders—from the Secretary of the Navy to the Chief of Naval Operations and the Commander of Fleet Forces Command—delivered formal presentations outlining priorities and challenges.

On the final morning, a closed session was held exclusively for active-duty and retired captains and commanders. The premise was clear: a room limited to officers who had commanded at sea would allow for a more candid, less scripted discussion. Four senior captains from the Office of the Chief of Naval Operations delivered brief, upbeat remarks before opening the floor.

Soon, a retired captain stepped to the microphone and asked: “What is the difference between the Littoral Combat Ship and the ‘Future Frigate’ now under development?”

It was, upon consideration, a troubling question. The Littoral Combat Ship program has become, in many respects, a relic—originally planned for 55 ships, later reduced to 35, and widely viewed as misaligned with the Navy’s operational needs. The program endures largely through institutional momentum and the absence of ready alternatives.

By contrast, the Future Frigate—the FF(X) —is presented as the way ahead. A central element of President Trump’s “Golden Fleet” modernization initiative announced in December 2025, it is intended to contribute to a faster, more capable Navy and sustain maritime superiority. The frigate represents an effort to correct decades of uneven performance in designing smaller surface combatants and to expand a segment of the fleet long criticized as both undersized and underpowered—the Small Surface Combatant (SSC) element. 

The relationship between the two ship classes had, in fact, been addressed earlier in the symposium by Rear Admiral Derek Trinque, Director of the Surface Warfare Division in the Office of the Chief of Naval Operations. He distinguished the Littoral Combat Ship’s mission-module concept from the frigate’s proposed approach. One of the Littoral Combat Ship’s program difficulties, he explained, was attempting to integrate systems that did not yet exist with a hull still under construction—an ambitious concept that proved harder in practice than in theory. The Future Frigate, by contrast, will incorporate existing systems packaged with defined interfaces to the ship’s combat system, allowing more reliable and rapid changes in capability.

In essence, according to Rear Admiral Trinque, the Future Frigate—like the Littoral Combat Ship—will rely to some extent on modular mission packages. The difference lies in execution: a more disciplined, technically mature integration model.

Yet the retired captain’s question reached beyond a simply question of architectural integration. The deeper issues he posed with his question remained unaddressed: What missions are assigned—or will ultimately be assigned to the Littoral Combat Ship? Will the Future Frigate assume those same roles? What is the envisioned division of labor between these two small surface combatants? What, if any, differences exist in their limitations—and how should those limits shape the missions they are given? 

Perhaps most importantly, what can these ships do or not do?

The Future Frigate and the Golden Fleet

On 19 December 2025, Secretary of the Navy John C. Phelan stated: “To deliver at speed and scale, I’ve directed the acquisition of a new frigate class based on HII’s Legend-Class National Security Cutter design: a proven, American-built ship that has been protecting US interests at home and abroad. President Trump and the Secretary of Defense have signed off on this as part of the Golden Fleet. Our goal is clear: launch the first hull in the water in 2028. To expand capacity and production across our maritime industrial base, we will acquire these ships using a lead yard and competitive follow-on strategy for multi-yard construction. Shipyards will be measured against one outcome: delivering combat power to the Fleet as fast as possible.”

As part of the President’s recently advertised “Golden Fleet,” the Navy plans a “high/low” mix of ships, featuring several new classes in addition to combatant classes already in the fleet. On the “high” end, the Navy intends to maintain a Large Surface inventory, including a new guided missile battleship class, supported by both existing and planned Arleigh Burke-class guided missile destroyers, which have been and continue to be built in multiple “Flights.” According to Issues for Congress, the goal is to maintain approximately 87 large combatants. These large combatants are intended for assignment to complex mission sets, potentially involving multiple warfare areas in the most heavily contested waters. For example, an Arleigh Burke-class guided missile destroyer operating in the Red Sea is fully capable of simultaneously escorting merchant ships, providing on-call Tomahawk land-strike capability, and offering the most-sophisticated air defense umbrella for an entire region of the battlespace.

On the “low” end of the spectrum are Small Surface Combatants which include the Navy’s frigates, like the Future Frigate, and the Littoral Combat Ships, as well as mine warfare ships. With the retirement of the Avenger-class there are no more dedicated mine warfare ships in the Navy These ships are smaller, less expensive, manned by smaller crews, and less capable than Large Surface Combatants. While they can operate in conjunction with Large Surface Combatants and other Navy vessels, particularly in higher-threat environments, they are also designed to operate independently in lower-threat settings.

As specified at the Symposium, missions assigned to Small Surface Combatants – including both the LCS and the FF(X) – may include Anti-Surface Warfare (ASuW), Anti-Submarine Warfare (ASW) and Mine Countermeasure Operations (MCM). According to the briefings, these ships will enable a significant expansion of the Navy’s worldwide footprint while increasing fleet capacity in areas of active combat operations. To fill the ranks of these small combatants, the Navy plans to rely on a combination of existing Littoral Combat Ships and the now-planned Future Frigate class.

So, how many Small Surface Combatants does the Navy plan on fielding? 

The Navy’s Fiscal Year 2025 30-year shipbuilding plan calls for a future force of 381 manned battle force ships, including 73 Small Surface Combatants. Of these, 15 are Littoral Combat Ships capable of conducting mine warfare operations, while 58 are designated as guided missile frigates — meaning frigates built to either the original or a modified Flight II design. (A Flight II FFG was, until recently cancelled, the Constellation-class). Under its 2025 budget submission, the Navy proposed maintaining a force of 25 Littoral Combat Ships instead of 15. This adjustment would imply a total of 48 frigates, rather than 58.

However, the Navy has reportedly prepared a new ship force-level objective which will succeed the existing plan. This new objective is predicated upon the requirements outlined for the “Golden Fleet.” As of late December 2025, the force composition of this new objective had not been announced. Still, considering that multiple speakers at the Symposium firmly indicated the Navy intends to maintain 35 Littoral Combat Ships while building perhaps as many as 50 Future Frigates, one might sensibly suppose that the small and large combat fleets will be roughly equal in size – somewhere around 85 hulls for each.

Unclear Missions

It is curious that the Symposium suggested that the ships of the SSC classes may…may…contribute to ASuW, ASW, and MCM. While that seems worthy, RADM Trinque also outlined another, entirely more nebulous, role for the Future Frigate: That ship, he said, is explicitly intended to help alleviate the workload on Arleigh Burke-class destroyers. He framed this need within the perspective of Chief of Naval Operations, Admiral Daryl Caudle, as outlined in his “Fighting Instructions.”

Published after the Symposium, on February?9, the Fighting Instructions introduce the “Hedge Strategy,” which calls for a balanced, scalable force mix rather than reliance solely on expensive, high-end formations like carrier strike groups. The strategy emphasizes tailored forces—combinations of ships, aircraft, unmanned systems, and other capabilities—that can be adapted for specific missions and crises, instead of a brittle model optimized only for high-end conflict but with capabilities underutilized in day-to-day operations.

Problematically, the Fighting Instructions are more strategic philosophy than technical manual. They do not prescribe specific weapons, sensors, or deployments, but rather articulate principles for how the fleet should organize, operate, and fight in a complex global environment. While the guidance supports a shift away from using Arleigh Burke-class destroyers as the default solution for every mission – favoring distributed, purpose-built packages – the Littoral Combat Ship and the Future Frigate are not mentioned as relieving the overburdened Burkes.

This raises a key question: where is the Future Frigate’s role—and particularly with regard to relieving the burden on Large Surface Combatants—explicitly defined? Where is this requirement laid down?

The answer is that it is not, which begs the question, what is the real purpose of the ship? Is it ASuW, ASW, or MCM? Is it there to relieve the Arleigh Burke-class? Of what? Or is it something else, as of yet unspecified?

Ambition Beyond Need?

The Navy appears to be aiming for roughly 85 small surface combatants. What is the origin of this number? More important, is that number the correct one to ease pressure on the Arleigh Burkes, and how will that relief be operationalized?

Determining deployable force size requires the application of the Navy’s standard availability model: at any given time, roughly one-third of ships are deployed, one-third are in training and certification cycles, and one-third are in maintenance or modernization. 

Applied to an 85-ship Small Surface Combatant fleet, that model would yield approximately 28 ships deployed at any given time. That is a striking figure. Some estimates put the total number of active destroyers in the future at 94. 

Ninety-four destroyers and 85 frigates would create an essentially one-for-one situation. Granted: such comparisons are inherently imprecise; however, the implication is notable and suggest a strategic ambition that goes well beyond merely alleviating pressure on the destroyer force.

And, while small combatants may be able to execute ASuW, ASW, and MCM, they are absolutely not a one-for-one replacement for a Large Surface Combatant.

So, what does the term “relief” actually mean, and how does that square with other mission sets mentioned for these ships at the Symposium? And why so many FF(X)s?

The Unexpected Future Frigate Mission

Curiously, at least one slide presented during the Captain/Commander session suggested that the Future Frigate might eventually assume “Anti-Air Warfare Mission Sets.” This raises a significant issue. Neither the Littoral Combat Ship nor the Future Frigate possesses—nor are planned to possess—an organic air defense capability beyond point defense.

Point defense protects only the ship itself. Area-air-defense, by contrast, protects groups of ships or an entire task force.

The proposed baseline armament for the Future Frigate includes a 57mm main gun, a 30mm auxiliary gun, and a Mk-49 launcher carrying 21 Rolling Airframe Missiles, supported by AN/SLQ-32(V)6 electronic warfare systems and Nulka decoy launchers. The ship is expected to carry an AN/SPS-77 air and surface search radar. Mission modules may include containerized weapons such as Naval Strike Missiles or Hellfire missiles installed in a stern payload space. As of now, no specific Combat Management System has been identified. 

This configuration essentially mirrors the air-defense capability of the Littoral Combat Ship: 21 Rolling Airframe Missiles, and a surveillance radar. It is important to note here that while Rolling Airframe Missiles provide effective self-defense, they cannot perform area air defense. The system is effective only at ranges out to 10km, and for threats below Mach 2. It is not, for example, capable against several classes of air threats, including ballistic missiles, Hypersonic Glide Vehicles, and high and medium altitude aircraft. Further, low magazine depth means that the system may be overwhelmed by saturation.

Modern area defense requires Standard Missiles, a vertical launch system, and a powerful radar integrated with a combat system such as Aegis and AN/SPY-6 radar. Without these elements, a ship cannot reliably counter the full range of modern aerial threats. These are the facts, and they are not in dispute.

Nor is such an upgrade feasible. The Littoral Combat Ship already operates near the limits of its stability, while the Future Frigate is derived from the Legend-class National Security Cutter, a design of roughly 4,500 tons displacement. By comparison, the now-canceled Constellation-class guided-missile frigate, the smallest modern Navy design intended to carry an area-air-defense system, displaced over 7,000 tons. The radar, launch systems, missiles, and supporting equipment required for area defense simply exceed the weight and space margins of a 3,500-ton Littoral Combat Ship or a roughly 4,700-ton Future Frigate.

This reality matters. In U.S. Navy classification, the “G” designation—as in guided missile destroyers or frigates—indicates a ship capable of guided-missile . Suggestion that the Future Frigate can perform Anti-Air warfare missions without such capability is therefore misleading.

Historically, frigates served as ocean escorts, but ships equipped only with point defense cannot safely escort other vessels where air attack is possible. They can defend themselves, but not the ships around them. For the Small Surface Combatants, this obviates escort of merchant shipping or amphibious forces. That mission must fall to the Large Surface Combatants—Arleigh Burkes.

The importance of this distinction—point and area defense capability—is growing as air and missile threats proliferate. A decade ago, it would have seemed implausible that the Houthis in Yemen could challenge shipping with anti-ship ballistic missiles—yet that has been reality since 2023. Meanwhile, advanced systems such as Russia’s Tsirkon and China’s DF-21D anti-ship missiles continue to expand the threat environment in genuinely

The conclusion is unavoidable: Small Surface Combatants cannot operate independently against peer adversaries in high air threat environments. As for missions like Anti-Submarine or Anti-Air Warfare, those missions can only be carried out under the area-air-defense umbrella provided by guided missile destroyers.

Which raises the central question, yet again: if Arleigh Burke destroyers remain the only ships capable of protecting the fleet from the air, what does it truly mean to “relieve the burden” on the destroyer force?

The One True Mission

A major problem for the Navy today is a reliance on sledgehammer solutions for problems that may only require a tack hammer. For example, in 2009, USS Bainbridge (DDG 96) was assigned to anti-piracy operations off Somalia. In March 2025, USS Gravely (DDG 107) was sent to the Gulf of Mexico for a maritime border mission under US Northern Command, helping to deter illegal sea crossings and drug trafficking. Simultaneously, USS Stockdale (DDG 106) deployed off the US–Mexico Pacific coast to support the same operation, with a Coast Guard detachment embarked.

It is troubling that these ships—the critical core of the Navy’s Large Surface Combatant power for the next 50 years—are being expended on missions more appropriately suited to smaller, lightly armed and manned ships. Ships can only accumulate so many operational miles; once Arleigh Burke-class guided missile destroyer miles are used for counter-drug or other low-end tasks, they cannot be reclaimed.

Rear Admiral Trinque touched upon this critical dynamic. According to Trinque, with destroyers focusing on “high-end” missions, there’s room for the Littoral Combat Ship to do the less involved work of countering narcotics trafficking, which has shot to the top of national security priorities in the past year. “If it’s defending the territorial integrity of the United States against illegal trafficking, counter-narcotics, if it’s controlling sea lanes in a lower threat environment, then a small surface combatant should be in your toolkit.”

Rear Admiral Trinque was referring to a mission set known as Maritime Interdiction Operations. However, today, and as noted above, maritime interdictions is not a mission exclusively assigned to Littoral Combat Ships.

So, what specific missions should these Small Surface Combatants perform? How can they relieve the Arleigh Burke-class? The answer lies in straightforward yet fundamental Navy tasks that lie below the heavy combat requirements assigned to the destroyers:

Maritime Interdiction Operations: This includes interdiction of drugs, weapons, and human smuggling; enforcement of sanctions and embargoes; counter-piracy; interdiction of terrorist movements and logistics; and prevention of Weapons of Mass Destruction (WMD) proliferation.

Mine Countermeasure Operations: With the retirement of the Avenger-class, there are no purpose-built mine warfare ships in the fleet. For years, the Navy has relied on NATO to provide these capabilities. However, any fight in the Western Pacific cannot be assumed to be mine-free, nor can NATO be expected to supply mine warfare ships. Arleigh Burke-class guided missile destroyers have no such capability; this gap must be filled elsewhere to ensure access for operations such as the defense of Taiwan or Korea.

Multinational and Presence Operations: The Navy routinely operates with allied navies in exercises such as BALTOPS (Baltic), UNITAS (South Ameria), CUTLASS EXPRESS (East Africa/Western Indian Ocean), and FOAL EAGLE/FREEDOM SHIELD (Korean Peninsula). These missions involve dozens of ships annually. Assigning Arleigh Burke-class guided missile destroyers to such low-threat demonstrations is equivalent to sending a sledgehammer to perform tack-hammer work.

[None] of these missions require sophisticated combat systems, larger size, or large and complex crews. Except for Mine Countermeasure Operations, none require operations in high-threat waters. Yet these missions remain core Navy responsibilities. This is not to say that the inclusion of a Large Surface Combatant would not have the value of sending a powerful message to both allies and adversary; however, that choice should be optional.

Three critical missions to ease the burden on the Large Surface Combatants. While these small ships can augment that force in combat areas, without area air capability, they absolutely cannot relieve a single Large Surface Combatant of its duties.

Is This About Shipbuilding?

What stands behind the Secretary of the Navy’s push get the first of very many Future Frigates into the water by 2028 – an extraordinary number since the shortest time recorded for a Littoral Combat to go from keel laying to commission was 36 months.

Is it the need for a significant small combatant force?

In truth, this rush may well be more connected to national shipbuilding concerns that it is to the specific force structure needs of the Navy. The president has repeatedly emphasized the need to revitalize US shipbuilding, which is critical to national security. During World War II, the US outbuilt adversaries and achieved naval dominance; today, fewer than two Arleigh Burke-class guided missile destroyers are delivered per year. The United States has arguably lost the ability to build ships in numbers, and that may tell in a war situation with a peer competitor, like China. 

This is not to say that an American ability to build ships and submarines in number is not a national imperative—it is. It is, in fact, a key element of the National Security Strategy. The published document makes clear that cultivating a strong American industrial base—including critical production capacity – is fundamental to national power and security. This implies that building the capacity to produce ships and other systems is part of national strategy, not just defense programs.

But is building the Future Frigate, at least in part, to stimulate this industrial imperative enough? It is not. The Navy needs to build the right ship, not just a ship. With respect to fleet needs, 85, point defense-equipped frigates is many more than required to either execute the destroyer-relieving missions of Presence, Mine Warfare, Maritime Interdiction, or even combat augmentation.

While building the Future Frigate may be an indispensable win for US shipbuilding, the cost —in money, resources, fleet coherence, and the opportunity to build the next, right warship —remains significant.

What are we Doing and Why?

The central point is this: the Future Frigate is being pursued less as a decisive warfighting innovation than as a means to stabilize a shipbuilding enterprise in distress. Its secondary purpose is to relieve the operational burden on the Arleigh Burke–class destroyers. Beyond that, it functions as a stopgap—bridging the gap until the Navy can define and build the “next” truly capable surface combatant. That ship is not the Future Frigate.

As for the cancelled Constellation-class, which the Secretary of the Navy deemed too expensive, too far behind schedule, and abutting the fleet space occupied by the Arleigh Burke-class guided missile destroyer, that ship most likely would have filled the need for a modern, area air defense capable frigate. The net result of the cancellation is a faster, cheaper solution which can be quickly built in numbers—the Future Frigate—even if that solution is far less capable than the Constellation. But then, this appears to be more about stimulating the industrial base than it is about the warfighting mission.

In the near term, the Navy should take practical steps to maximize the utility of its existing and planned Small Surface Combatants. This is not to argue against making these ships as capable as possible within clearly defined limits. The strategic environment is increasingly unpredictable; even a vessel assigned to counter-piracy could find itself drawn into a broader conflict. Small combatants can and must contribute meaningfully to high-end warfare—but only if their limitations are clearly understood and accepted.

With respect to the Littoral Combat Ship classes, two viable paths present themselves. First, the Independence-class should be rationalized into a single-mission platform focused on mine countermeasures. These ships should be forward-deployed to the Arabian Gulf and Western Pacific—Japan or Guam—along with the necessary shore infrastructure. There, they would provide a credible and responsive mine warfare capability in the theater of greatest risk. While the mine countermeasures module remains immature, the absence of alternative dedicated capability in the fleet makes these ships indispensable. Further, their large flight decks and speed also make them well suited to operate unmanned aerial systems, extending surveillance, reconnaissance, and limited strike capacity across the battlespace, albeit not concurrently with mine operations.

The Freedom-class, by contrast, should be based on the U.S. East Coast and tasked with maritime interdiction operations that currently consume high-end assets. These missions—ranging from counter-narcotics to presence operations—do not require robust air defense and are ill-suited to Arleigh Burke–class destroyers. In peacetime, the forward-deployed Independence-class could supplement these roles as needed. While both Littoral Combat Ship variants are more complex and manpower-intensive than ideal for such missions, they are available and sufficient.

As for the Future Frigate, the Navy must resist the temptation to expand its mission beyond its inherent limits. It will not be, and cannot be, a “pocket destroyer” capable of full-spectrum air warfare. That kind of mission creep—allowing requirements to exceed the physical and power constraints of the hull—was a central factor in the Littoral Combat Ship program’s difficulties.

Anti-Submarine Warfare capability remains particularly uncertain. Senior officials have suggested that more advanced Anti-Submarine Warfare systems may be deferred to later increments, leaving early ships reliant primarily on embarked helicopters. Proposed modular solutions—containerized towed arrays or unmanned systems—remain undefined. Given the cancellation of the Littoral Combat Ship Anti-Submarine module, following years of delay, expectations for a near-term frigate-based solution should be tempered

Consequently, the Future Frigate, with limited point-defense air warfare capability and no clearly defined organic Anti-Submarine Warfare suite, will not be suited to escort duties in contested environments. Missions such as convoy escort, amphibious protection, and area air defense will remain the responsibility of the destroyer force.

Instead, the Future Frigate should be designed to replace the Littoral Combat Ship fleet over time while sustaining the industrial base and maintaining hull numbers for low- to – medium intensity missions. Conceptually, it should resemble an enhanced Coast Guard cutter: equipped with a medium-caliber gun, point-defense missile systems, modest Anti-Submarine Warfare capability, and possibly an over-the-horizon strike weapon, but nothing more ambitious. These ships can augment deployed forces—but only under the protective umbrella of destroyer-provided air defense.

Ultimately, the restoration of U.S. shipbuilding capacity may itself justify the program, even if the resulting force structure exceeds the strict requirements of the Small Surface Combatant mission set. This industrial imperative likely explains the urgency behind the 2028 timeline, despite the lack of fully defined requirements.

The Navy’s enthusiasm for the broader fleet expansion, and for the Future Frigate in particular, appears driven in large part by the need to relieve the unsustainable operational tempo imposed on the Arleigh Burke force—tasked with everything from high-end combat to routine patrol duties.

In that sense, the current leadership has been charged with addressing the cumulative consequences of several troubled acquisition efforts, including the Littoral Combat Ship and the Zumwalt-class destroyer. Yet it is essential to recognize the Future Frigate for what it is: an interim solution, intended as much to sustain shipbuilding as to enhance combat capability.

The real challenge remains the development of the next-generation surface combatant—a ship with the size, power, and growth margin to accommodate future weapons and sensors. That search has eluded the Navy for decades. The Future Frigate is not that answer. Achieving it will require a clean-sheet design, sustained discipline, and a willingness to align ambition with technical reality. Until then, the frigate program represents not a destination, but a holding action.

Captain Kevin Eyer is a retired Surface Warfare Officer who served on active duty for 27 years. He deployed in seven cruisers and commanded three Aegis cruisers; USS Thomas S. Gates (CG 51), USS Shiloh (CG 67), and USS Chancellorsville (CG 62). Captain Eyer completed tours on both the Navy Staff and Joint Staff and attained a master’s from the Fletcher School of Law and Diplomacy at Tuft’s University. He was the US Naval Institute Proceedings Author of the Year in 2017, and three-time winner of the Surface Navy Literary Award.

This article appears courtesy of CIMSEC and may be found in its original form here

The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.

 

Genco Rejects Third Offer from Diana Two Weeks Before Shareholder Meeting

Genco dry bulk vessel
Genco again rejected Diana's offer as inadequate leading to a showdown at the upcoming shareholder meeting (Genco file photo)

Published Jun 2, 2026 6:39 PM by The Maritime Executive


The takeover battle that has been going back and forth for six months continues to build with Genco Shipping & Trading releasing a statement from its board rejecting Diana Shipping’s third, increased offer. It comes just two weeks before the pivotal shareholder meeting for Genco that could decide the outcome of the battle.

Diana’s Chief Executive Officer, Semiramis Paliou, increased his rhetoric in a statement shortly after Genco went public with its rejection of the offer. Paliou says it has become evident that, despite what it says, Genco’s board has no intention of engaging in meaningful negotiations. He says Diana has attempted to initiate negotiations for six months since it went public with its offer and twice raised the value of its cash offer to the shareholders. Diana remains the largest shareholder of Genco, having purchased nearly 15 percent in open market transactions last year.

Genco’s board asserts it has engaged with Diana for two years, beginning in June 2024, when it says its CEO proactively reached out to Diana to explore a potential business combination. Genco is the past has asserted that it has a stronger balance sheet and should be leading the discussions.

After Diana raised its offer to $24.80 per share in late May and extended the expiration date on the tender, Genco says its board engaged with investment bankers from both Jefferies and Morgan Stanley. Based on that review, it again unanimously rejected the revised unsolicited tender offer. 

The board calls the offer “inadequate from a financial point of view,” and says it “continues to meaningfully undervalue the company.” Genco cites calculations based on the net asset value estimates from investment firms SEB, Clarkson Securities, Fearnley Securities, Deutsche Bank, and Pareto to assert the mean analyst estimate is $26.66 for NAV and a current median estimate of $27.10. It also asserts that Diana has not been willing to offer shareholders a premium for the change in control.

In some of its strongest language, Diana now accuses Genco’s board of “moving the goal posts on valuation,” asserting the company, which has cited the valuation from the independent VesselsValue for years, abandoned them for the analyst estimates. 

“Beyond the question of which valuation source is most appropriate, Genco is demanding a premium on top of those inflated estimates when shares of drybulk companies, including Genco itself, have consistently traded at a meaningful discount to NAV.  Shipping take-private transactions have on average been concluded at a 20 percent discount to NAV — not at a premium.  Applying a control premium on top of an already inflated NAV estimate is a framework designed to make any offer appear inadequate, not to achieve a fair result for shareholders,” asserts Diana.

Genco reiterates in its statement its willingness to meet again with Diana “if and when they submit an offer that adequately compensates shareholders.”

The shareholder meeting scheduled for June 18 is the next test with Diana advocating for its slate of replacement directors.  Analysts believe it is too early to determine which way the investors will vote and the likely outcome of the meeting. It rates as one of the longest-running and most hotly contested takeover battles the industry has seen.