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Recently, the US Treasury Secretary came back from a southern state displaying a tiny sample of metal, declaring it was the initial rare-earth magnet manufactured in the US in 25 years.

The official stated that this was proof the US is ending “China’s chokehold on our industrial pipeline.” Thanks to a recently opened rare-earth mineral processing center in South Carolina, he added, “We’re finally becoming independent again.”

Countering Beijing's Control in Essential Minerals

Ending China’s processing and manufacturing dominance in these materials, which are essential for some semiconductors, batteries, and military equipment, is a major focus for the current US administration. Via economic tools and other approaches, the US is relying on returning the industry back to American shores.

These tariffs prompted China to limit rare-earth exports to the US and motivated the administration to sign deals with Australia, a partner, another nation, and Japan.

Although the US and China have now reached a trade truce on rare earths, Beijing—with around 70% of global mining and over 90% of global processing capacity—holds an advantage that may prove challenging to erode.

“Rare earths are essential for electric motors but also in defense technology that have obvious applications for the defense department,” says an industry expert. “Any device that has a strong magnet in it requires rare earths.”

Challenging Path for US Independence

There’s no easy fix for the US to reset its reliance on imports from China of materials critical to defense, chip manufacturing, and the shift from fossil fuels to renewable sources. Data from federal reports, the US brought in the vast majority of the rare earths it used in recent years.

For some rare-earth minerals such as dysprosium, used in semiconductors, and samarium, critical for military applications, Chinese refinement dominance reaches 99%. Dysprosium and terbium are used in magnets crucial to electric engines and power systems in wind turbines, along with uses in mobile devices, advanced lighting, and energy plants.

Long-Term Efforts and Global Deposits

Initiatives to reduce the US’s dependence on Chinese production of rare-earth minerals could take years. Analysts point out that “These minerals” is not entirely accurate because they’re not that uncommon in the earth’s crust, but many deposits, including those in Eastern Europe, where a deal was signed earlier this year, are only in the early stages of mining.

“It’s not that there’s a shortage per se, it’s that China can control how much is exported,” a specialist explained, noting that securing permits from China can be a lengthy, difficult process.

Greenland, another focus of American interest, and South America, are two other countries with substantial rare-earth deposits. Domestically, there are reserves in the West, Wyoming, and Missouri, with the largest operational mine operating at Mountain Pass, California, not far from a major city.

Federal Efforts and Investment

In July, the US Department of Defense took on the role of the largest shareholder in an industry operator, with plans to open a new “integrated” plant, called a new facility, to make magnets crucial for military aircraft, unmanned systems, and naval vessels.

In North America, estimated reserves of rare earths were estimated to include millions of tons in the US and additional millions in Canada—significantly lower than the 44m tons estimated to be in the Asian giant.

Mirroring government funding in the steel industry and US chipmakers, the federal agency announced it was ready to make direct investments in strategic resource firms.

“You’re competing against government-backed investment because Beijing is picking these as priority areas that they want to invest in,” a senior official said during a speech in April.

The official suggested that the US could use a sovereign wealth fund to accelerate production. “How could the richest nation in the world not possess the largest sovereign wealth fund?” he questioned.

Past Challenges and Future Outlook

US efforts to promote homegrown output have floundered in the past when Chinese producers lowered prices, making unsubsidized rare-earth development uneconomic against China’s lower cost of production and long-term strategic outlook.

Five years ago, an industry leader testified before a US Senate committee that “those who invest in energy storage and industrial networks now are poised to lead this industry for the foreseeable future. There is still time for the US but immediate steps are required.”

Five years on, a race to build international partnerships around rare earths is speeding up.

“In about a year from now, we’ll have so much critical mineral and rare earths that you won’t know what to do with them,” a top leader told the media. This followed in the wake of a demand for compensation in the form of natural resources from another country. In September, the government of Pakistan agreed to a deal with an US firm, giving it access to minerals such as antimony and copper.

Prospects for Success

However, can the US make up its shortfall and weaken Beijing's grip on rare-earth supply chains? “America has implemented really significant steps so far,” a specialist says. The US, he continues, is unlikely to become “independent in the short term because it takes time to bring a mine online and establish processing plants.”