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Last week, the US Treasury Secretary returned from South Carolina brandishing a tiny sample of metal, announcing it was the first rare-earth magnet made in the US in 25 years.

He remarked that this was proof the US is breaking “China’s chokehold on our supply chain.” Thanks to a new rare-earth mineral processing center in the state, he added, “We’re finally becoming independent again.”

Challenging Beijing's Control in Essential Minerals

Reducing Beijing's processing and manufacturing dominance in these minerals, which are essential for some semiconductors, energy storage, and armaments, is a major focus for the current US administration. Through tariffs and other strategies, the US is counting on returning the industry back to domestic facilities.

These tariffs led China to restrict rare-earth exports to the US and motivated the administration to sign deals with Australia, a partner, another nation, and a key Asian economy.

Although the US and China have since brokered a trade truce on rare earths, China—with around 70% of worldwide extraction and over 90% of international refining—holds an advantage that will be difficult to overcome.

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

No Easy Fix for US Independence

It won't be simple for the US to reset its dependence on Chinese production of minerals essential to national security, semiconductor production, and the shift from fossil fuels to wind and solar. Data from official sources, the US brought in the vast majority of the rare earths it consumed in recent years.

For some rare-earth minerals such as dysprosium, used in chip production, and another mineral, critical for defense systems, China's control over processing reaches 99%. These elements are found in magnets crucial to electric engines and power systems in renewable energy, along with uses in cellphones, high-intensity lighting, and nuclear reactors.

Extended Timelines and Global Deposits

Efforts to reduce the US’s dependence 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 not that uncommon in the earth’s crust, but many deposits, such as those in Eastern Europe, where an agreement was signed recently, are only in the early stages of mining.

“The issue isn't scarcity itself, it’s that Beijing can limit how much is sent abroad,” an analyst said, noting that securing permits from China can be a lengthy, difficult process.

Greenland, another focus of US attention, and South America, are two other countries with substantial rare-earth deposits. Domestically, there are reserves in California, the Midwest, and Missouri, with the biggest active site located at Mountain Pass, California, about 60 miles from Las Vegas.

Government Initiatives and Funding

Recently, the US Department of Defense took on the role of the major investor in an industry operator, with intentions to open a new “mine-to-magnet” 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 calculated at 3.6m tons in the US and additional millions in Canada—significantly lower than the vast reserves estimated to be in China.

Following direct investment in other sectors and domestic technology firms, the interior department said it was prepared to make direct investments in critical mineral companies.

“You’re competing against government-backed investment because Beijing is picking these strategically that they aim to control,” a cabinet member said during a speech this spring.

He suggested that the US could use a sovereign wealth fund to speed production. “How could the wealthiest country in the world have the biggest state investment fund?” he asked.

Historical Obstacles and Future Outlook

American attempts to support domestic production have struggled in the past when China lowered prices, rendering unsupported rare-earth development uneconomic against Asia's competitive pricing and long-term strategic outlook.

In the past, an industry leader stated before a congressional panel that “nations that fund in battery capacity and industrial networks now are poised to lead this industry for generations to come. There is still time for the US but action is needed now.”

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

“In about a year from now, we’ll have an abundance of critical mineral and rare earths that supply will exceed demand,” the President informed the media. This followed eight months after a demand for compensation in the form of minerals from another country. In September, the authorities in Asia agreed to a contract 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 loosen China’s hold on rare-earth global networks? “The US has taken really significant steps already,” an analyst says. The US, he adds, is unlikely to become “independent in the near future because it requires years to start operations and establish processing plants.”