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Not long ago, a top US official returned from a southern state displaying a small piece of metal, proclaiming it was the initial rare-earth magnet produced in the US in 25 years.

He remarked that this was proof the US is overcoming “China’s chokehold on our industrial pipeline.” Due to a new rare-earth mineral refining facility in the state, he added, “America is reclaiming its self-sufficiency.”

Breaking Beijing's Control in Essential Minerals

Reducing China’s processing and manufacturing dominance in these minerals, which are crucial for some semiconductors, energy storage, and armaments, is a top priority for the federal government. Using tariffs and other approaches, the US is relying on returning the industry home to domestic facilities.

Such measures prompted China to restrict rare-earth shipments to the US and pushed US leaders to sign deals with an ally, Malaysia, another nation, and Japan.

While 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—has a head start that will be difficult to erode.

“Rare earths are used in electric motors but also in defense technology that have clear uses for the defense department,” says a market analyst. “Any device that has a strong magnet in it uses rare earths.”

Challenging Path for American Self-Sufficiency

It won't be simple for the US to reduce its reliance on imports from China of materials critical to defense, semiconductor production, and the shift from fossil fuels to renewable sources. Data from official sources, the US imported the vast majority of the rare earths it consumed in recent years.

In the case of rare-earth minerals such as dysprosium, essential for semiconductors, and samarium, critical for military applications, Chinese refinement dominance rises to 99%. These elements are found in magnets essential for EV motors and generators in renewable energy, along with applications for mobile devices, advanced lighting, and nuclear reactors.

Extended Timelines and International Resources

Initiatives to cut the US’s dependence on Chinese production of rare-earth minerals could take years. Analysts point out that “These minerals” is somewhat of a misnomer because they’re not that uncommon in the planet's surface, but many reserves, such as those in Eastern Europe, where a deal was signed recently, are only in the initial phases of extraction.

“The issue isn't scarcity itself, it’s that China can control how much is sent abroad,” an analyst said, adding that securing export licenses from China can be a complex and time-consuming endeavor.

The Arctic region, another focus of US attention, and South America, are two other countries with significant rare-earth deposits. In the continental US, there are deposits in California, Wyoming, and Missouri, with the biggest active site located at Mountain Pass, the state, not far from Las Vegas.

Federal Efforts and Funding

In July, the Pentagon took on the role of the largest shareholder in a mining company, with intentions to open a new “mine-to-magnet” plant, named 10X, to make magnets essential for military aircraft, unmanned systems, and naval vessels.

Across the continent, estimated reserves of rare earths were estimated to include millions of tons in the US and additional millions in Canada—significantly lower than the vast reserves believed to be in the Asian giant.

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

“You’re competing against state capital because Beijing is selecting these strategically that they aim to control,” a cabinet member stated during a speech this spring.

The official suggested that the US could use a sovereign wealth fund to speed production. “Why wouldn’t the richest nation in the world have the largest sovereign wealth fund?” he questioned.

Historical Obstacles and Future Outlook

American attempts to support homegrown output have floundered in the past when China cut costs, making unsupported rare-earth development unprofitable against Asia's competitive pricing and far-sighted planning.

Five years ago, a market expert testified before a US Senate committee that “nations that fund in battery capacity and supply chains now are likely to dominate this industry for the foreseeable future. It is not too late for the US but action is needed now.”

Since then, a race to assemble international partnerships around rare earths is accelerating.

“Soon, we’ll have an abundance of essential resources that you won’t know what to do with them,” the President informed the media. That came eight months after a demand for payment in the form of minerals from another country. More recently, the government of Pakistan signed a contract with an US firm, giving it access to minerals such as key metals.

Prospects for Success

However, can the US make up its gap and loosen China’s hold on rare-earth supply chains? “America has implemented major measures already,” an analyst says. The nation, he continues, is unlikely to become “self-reliant in the short term because it takes time to bring a mine online and build refining capacity.”