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Not long ago, a top US official came back from a southern state displaying a tiny sample of metal, declaring it was the first rare-earth magnet made in the US in a quarter of a century.

He remarked that this was a sign the US is overcoming “China’s chokehold on our industrial pipeline.” Because of a recently opened rare-earth mineral refining facility in South Carolina, he noted, “The nation is regaining its autonomy.”

Countering China’s Dominance in Essential Minerals

Reducing China’s refining and production supremacy in these materials, which are crucial for some semiconductors, energy storage, and military equipment, is a major focus for the American leadership. Through trade measures and other approaches, the US is relying on returning the industry back to American shores.

Such tariffs prompted China to restrict rare-earth exports to the US and motivated the administration to forge agreements with Australia, a partner, another nation, and Japan.

Although the US and China have since brokered a temporary agreement on rare earths, China—with around 70% of worldwide extraction and over 90% of international refining—has a head start that will be difficult to overcome.

“These materials are used in electric motors but also in guidance systems that have obvious applications for the military,” says a market analyst. “Any device that has a decent magnet in it uses rare earths.”

No Easy Fix for US Independence

There’s no easy fix for the US to reduce its reliance on Chinese production of minerals critical to national security, chip manufacturing, and the transition from fossil fuels to renewable sources. Data from official sources, the US imported 80% of the rare earths it used in recent years.

In the case of rare-earth minerals such as a key element, essential for chip production, and another mineral, essential to 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 wind turbines, along with applications for cellphones, advanced lighting, and energy plants.

Long-Term Efforts and Global Deposits

Initiatives to reduce the US’s reliance on Chinese production of rare-earth minerals may require a long time. Experts note that “Rare earths” is somewhat of a misnomer because they’re relatively abundant in the planet's surface, but many deposits, such as those in Ukraine, where an agreement was signed earlier this year, are only in the initial phases of extraction.

“The issue isn't scarcity per se, it’s that China can limit how much is sent abroad,” a specialist explained, noting that obtaining permits from China can be a lengthy, difficult process.

The Arctic region, another focus of American interest, and South America, are additional nations with significant rare-earth deposits. Domestically, there are deposits in the West, the Midwest, and the central US, with the biggest active site operating at a key location, California, about 60 miles from Las Vegas.

Federal Efforts and Funding

In July, the US Department of Defense became the major investor in an industry operator, with plans to open a new “integrated” plant, called a new facility, to make magnets essential for F-35 fighter jets, drones, 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 the northern neighbor—significantly lower than the 44m tons believed to be in the Asian giant.

Mirroring direct investment in the steel industry and domestic technology firms, the interior department announced it was ready to make targeted funding in critical mineral companies.

“The US is up against government-backed investment because Beijing is selecting these as priority areas that they want to invest in,” a senior official stated during a address in April.

The official suggested that the US could utilize a national investment pool to speed production. “Why wouldn’t the richest nation in the world not possess the biggest sovereign wealth fund?” he questioned.

Past Challenges and Prospects

American attempts to support homegrown output have floundered in the past when China lowered prices, making unsupported rare-earth development uneconomic against China’s lower cost of production 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 poised to lead this industry for generations to come. It is not too late for the US but action is needed now.”

Since then, a scramble to assemble trading alliances around rare earths is accelerating.

“Soon, we’ll have an abundance of essential resources that you won’t know what to do with them,” a top leader told the media. This followed in the wake of a request for compensation in the form of natural resources from Ukraine. In September, the government of Pakistan agreed to a deal 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? “America has implemented really significant steps already,” a specialist comments. The nation, he continues, is unlikely to become “independent in the near future because it takes time to bring a mine online and build refining capacity.”