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Not long ago, the US Treasury Secretary came back from a southern state brandishing a small piece of metal, announcing 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 dominance on our supply chain.” Due to a new rare-earth mineral refining facility in South Carolina, he added, “The nation is regaining its autonomy.”

Challenging Beijing's Control in Critical Materials

Overthrowing Beijing's processing and manufacturing dominance in these minerals, which are crucial for some semiconductors, energy storage, and military equipment, is a top priority for the federal government. Through trade measures and other approaches, the US is relying on returning the industry back to US soil.

These measures led Beijing to restrict rare-earth exports to the US and pushed the administration to forge agreements with an ally, Malaysia, another nation, and Japan.

Although the US and China have since brokered a temporary agreement on rare earths, China—with approximately 70% of global mining and over 90% of international refining—holds an advantage that will be difficult to diminish.

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

Challenging Path for American Self-Sufficiency

There’s no easy fix for the US to reset its dependence on imports from China of materials critical to national security, chip manufacturing, and the transition from traditional energy to wind and solar. Data from federal reports, the US imported the vast majority of the rare earths it consumed in recent years.

In the case of rare-earth minerals such as a key element, used in semiconductors, and another mineral, essential to military applications, Chinese refinement dominance reaches almost total. These elements are found in magnets crucial to EV motors and generators in wind turbines, along with applications for cellphones, advanced lighting, and nuclear reactors.

Long-Term Efforts and International Resources

Efforts to cut the US’s dependence on China's output of rare-earth minerals may require a long time. Analysts point out that “These minerals” is not entirely accurate because they’re relatively abundant in the earth’s crust, but many deposits, such as those in Eastern Europe, where a deal was made recently, 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 sent abroad,” an analyst said, adding that securing export licenses from China can be a lengthy, difficult process.

The Arctic region, a key area of US attention, and Brazil, are two other countries with significant rare-earth resources. Domestically, there are deposits in California, Wyoming, and the central US, with the biggest active site located at a key location, California, about 60 miles from Las Vegas.

Federal Efforts and Investment

Recently, the Pentagon took on the role of the major investor in a mining company, with intentions to open a new “integrated” plant, named a new facility, to make magnets essential for military aircraft, drones, and naval vessels.

In North America, measured and indicated resources of rare earths were calculated at millions of tons in the US and more than 14m tons in Canada—far less than the 44m tons estimated to be in China.

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

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

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

Past Challenges and Future Outlook

US efforts to promote domestic production have floundered in the past when China cut costs, making unsubsidized rare-earth development unprofitable against Asia's competitive pricing and far-sighted planning.

Five years ago, a market expert stated before a US Senate committee that “nations that fund in energy storage and industrial networks now are likely to dominate this industry for generations to come. There is still time for the US but immediate steps are required.”

Five years on, a scramble to assemble international partnerships around rare earths is accelerating.

“In about a year from now, we’ll have so much essential resources that supply will exceed demand,” the President told reporters. This followed eight months after a request for compensation in the form of natural resources from Ukraine. In September, the authorities in Asia signed a deal with an American company, securing rights 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 comments. The nation, he adds, is unlikely to become “independent in the near future because it takes time to start operations and establish processing plants.”