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Last week, a top US official returned from a southern state holding up a small piece of metal, proclaiming it was the first rare-earth magnet manufactured in the US in decades.

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

Countering Beijing's Control in Essential Minerals

Reducing Beijing's refining and production supremacy in these materials, which are crucial for some semiconductors, batteries, and military equipment, is a key goal for the federal government. Via trade measures and other approaches, the US is counting on bringing the industry home to domestic facilities.

Such tariffs led China to limit rare-earth exports to the US and pushed US leaders to forge agreements with Australia, a partner, Cambodia, and a key Asian economy.

Although the US and China have now reached a temporary agreement on rare earths, China—with around 70% of global mining and nearly all of global processing capacity—holds an advantage that will be difficult to diminish.

“Rare earths are used in EV engines but also in defense technology that have obvious applications for the military,” notes an industry expert. “Anything that has a decent magnet in it uses rare earths.”

No Easy Fix for American Self-Sufficiency

It won't be simple for the US to reset its dependence on imports from China of minerals essential to national security, chip manufacturing, and the transition from traditional energy to renewable sources. Data from official sources, the US brought in 80% of the rare earths it used in recent years.

For some rare-earth minerals such as dysprosium, used in semiconductors, and samarium, essential to defense systems, Chinese refinement dominance rises to 99%. Dysprosium and terbium are found in magnets crucial to electric engines and power systems in wind turbines, along with uses in cellphones, high-intensity lighting, and energy plants.

Extended Timelines and International Resources

Initiatives to cut the US’s reliance on China's output of rare-earth minerals could take years. Analysts point out that “Rare earths” is somewhat of a misnomer because they’re relatively abundant in the earth’s crust, but many reserves, such as those in Ukraine, where a deal was made earlier this year, are only in the early stages of mining.

“The issue isn't scarcity per se, it’s that Beijing can control how much is exported,” a specialist explained, noting that obtaining export licenses from China can be a lengthy, difficult process.

The Arctic region, a key area of American interest, and Brazil, are two other countries with substantial rare-earth deposits. In the continental US, there are reserves in the West, Wyoming, and the central US, with the biggest active site located at Mountain Pass, California, not far from a major city.

Government Initiatives and Funding

Recently, the US Department of Defense became the major investor in an industry operator, with plans to open a new “integrated” plant, named 10X, to make magnets crucial for F-35 fighter jets, unmanned systems, and submarines.

Across the continent, measured and indicated resources of rare earths were estimated to include 3.6m tons in the US and more than 14m tons in the northern neighbor—significantly lower than the 44m tons estimated to be in China.

Following direct investment in other sectors and domestic technology firms, the federal agency announced it was ready to make direct investments in strategic resource firms.

“The US is up against state capital because Beijing is selecting these strategically that they want to invest in,” a senior official said during a address this spring.

The official floated that the US could use a national investment pool to speed production. “How could the wealthiest country in the world have the biggest sovereign wealth fund?” he questioned.

Past Challenges and Prospects

American attempts to support domestic production have floundered in the past when China lowered prices, making unsubsidized rare-earth development unprofitable against Asia's competitive pricing and long-term strategic outlook.

Five years ago, a market expert stated before a congressional panel that “nations that fund in battery capacity and supply chains today are poised to dominate this sector for generations to come. There is still time for the US but action is needed now.”

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

“In about a year from now, we’ll have an abundance of essential resources that supply will exceed demand,” the President told reporters. This followed eight months after a demand for payment in the form of natural resources from Ukraine. In September, the authorities in Asia signed a contract with an American company, giving it access to minerals such as key metals.

Prospects for Success

However, is America able to close its gap and weaken China’s hold on rare-earth global networks? “The US has taken major measures already,” an analyst says. The nation, he adds, is unlikely to become “independent in the near future because it takes time to start operations and establish processing plants.”