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Not long ago, a top US official came back from South Carolina holding up a small piece of metal, declaring it was the initial rare-earth magnet made in the US in a quarter of a century.

He indicated that this was a sign the US is overcoming “China's dominance on our supply chain.” Thanks to a recently opened rare-earth mineral refining facility in the state, he noted, “We’re finally becoming independent again.”

Challenging Beijing's Control in Critical Materials

Reducing China’s refining and production supremacy in these materials, which are vital for some semiconductors, energy storage, and armaments, is a major focus for the federal government. Through tariffs and other strategies, the US is relying on bringing the industry home to domestic facilities.

Such measures led Beijing to limit rare-earth exports to the US and motivated the administration to forge agreements with Australia, a partner, another nation, and Japan.

While the US and China have now brokered a temporary agreement on rare earths, China—with approximately 70% of global mining and over 90% of global processing capacity—holds an advantage that will be difficult to overcome.

“Rare earths are essential for EV engines but also in defense technology that have obvious applications for the defense department,” notes a market analyst. “Any device that has a decent magnet in it uses rare earths.”

No Easy Fix for US Independence

It won't be simple for the US to reduce its reliance on imports from China of minerals essential to defense, chip manufacturing, and the transition from traditional energy 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 chip production, and samarium, critical for military applications, China's control over processing rises to 99%. Dysprosium and terbium are found in magnets crucial to EV motors and power systems in renewable energy, along with uses in mobile devices, high-intensity lighting, and energy plants.

Extended Timelines and Global Deposits

Initiatives to cut the US’s reliance on Chinese production of rare-earth minerals may require a long time. Experts note that “These minerals” is not entirely accurate because they’re relatively abundant in the planet's surface, but many reserves, such as those in Eastern Europe, where an agreement was signed earlier this year, are only in the initial phases of mining.

“It’s not that there’s a shortage per se, it’s that Beijing can control how much is sent abroad,” an analyst explained, adding that obtaining permits from China can be a complex and time-consuming endeavor.

The Arctic region, another focus of US attention, and South America, are additional nations with substantial rare-earth deposits. Domestically, there are reserves in the West, Wyoming, and Missouri, with the largest operational mine operating at a key location, California, about 60 miles from a major city.

Government Initiatives and Investment

Recently, the US Department of Defense became the largest shareholder in a mining company, with intentions to open a new “mine-to-magnet” plant, named 10X, to make magnets essential for F-35 fighter jets, unmanned systems, and submarines.

In North America, estimated reserves of rare earths were calculated at millions of tons in the US and additional millions in the northern neighbor—significantly lower than the vast reserves believed to be in the Asian giant.

Following direct investment in other sectors and US chipmakers, the federal agency announced it was prepared to make targeted funding in critical mineral companies.

“You’re competing against state capital because China is picking these as priority areas that they want to invest in,” a cabinet member stated during a speech this spring.

He floated that the US could utilize a national investment pool to accelerate production. “How could the richest nation in the world have the biggest state investment fund?” he questioned.

Past Challenges and Prospects

US efforts to promote domestic production have struggled in the past when Chinese producers lowered prices, making unsubsidized rare-earth development unprofitable against Asia's competitive pricing and long-term strategic outlook.

In the past, a market expert testified before a US Senate committee that “those who invest in battery capacity and industrial networks now are poised to lead this sector for generations to come. It is not too late for the US but action is needed now.”

Since then, a race to build trading alliances around rare earths is speeding up.

“In about a year from now, we’ll have so much essential resources that supply will exceed demand,” a top leader informed the media. That came in the wake of a request for compensation in the form of natural resources from another country. More recently, the government of Pakistan agreed to a contract with an US firm, securing rights to minerals such as key metals.

Can the US Succeed?

But, can the US make up its shortfall and loosen Beijing's grip on rare-earth global networks? “The US has taken major measures already,” an analyst says. The nation, he continues, is unlikely to become “independent in the short term because it requires years to bring a mine online and establish processing plants.”