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Last week, the US Treasury Secretary came back from a southern state holding up a tiny sample of metal, announcing it was the initial rare-earth magnet made in the US in decades.

He remarked that this was proof the US is breaking “Beijing's grip on our industrial pipeline.” Because of a new rare-earth mineral manufacturing plant in the state, he added, “America is reclaiming its self-sufficiency.”

Countering China’s Dominance in Essential Minerals

Overthrowing China’s refining and production supremacy in these materials, which are crucial for some semiconductors, energy storage, and armaments, is a top priority for the current US administration. Through tariffs and other approaches, the US is betting on returning the industry home to domestic facilities.

Such tariffs led China to limit rare-earth exports to the US and motivated US leaders to sign deals with an ally, a partner, another nation, and a key Asian economy.

While the US and China have since reached a trade truce on rare earths, China—with around 70% of global mining and nearly all of global processing capacity—holds an advantage that may prove challenging to diminish.

“Rare earths are used in electric motors but also in guidance systems that have clear uses for the military,” notes a market analyst. “Anything that has a decent magnet in it requires rare earths.”

Challenging Path for US Independence

It won't be simple for the US to reduce its reliance on Chinese production of materials essential to national security, semiconductor production, and the transition from fossil fuels to renewable sources. According to federal reports, the US imported the vast majority of the rare earths it used in recent years.

For some rare-earth minerals such as a key element, essential for semiconductors, and samarium, critical for military applications, China's control over processing reaches almost total. Dysprosium and terbium are used in magnets essential for EV motors and power systems in renewable energy, along with applications for mobile devices, high-intensity lighting, and nuclear reactors.

Long-Term Efforts and International Resources

Efforts to cut the US’s reliance on Chinese production of rare-earth minerals may require a long time. Experts note that “Rare earths” is not entirely accurate because they’re relatively abundant in the earth’s crust, but many reserves, such as those in Ukraine, where a deal was signed earlier this year, are only in the early stages of extraction.

“It’s not that there’s a shortage per se, it’s that China can control how much is sent abroad,” a specialist explained, adding that securing export licenses from China can be a lengthy, difficult process.

Greenland, a key area of American interest, and Brazil, are additional nations with significant rare-earth resources. In the continental US, there are deposits in the West, Wyoming, and Missouri, with the largest operational mine located at Mountain Pass, California, about 60 miles from a major city.

Federal Efforts and Investment

In July, the US Department of Defense became the largest shareholder in a mining company, with plans to open a new “integrated” plant, named a new facility, to make magnets crucial for military aircraft, unmanned systems, and naval vessels.

Across the continent, measured and indicated resources of rare earths were calculated at millions of tons in the US and additional millions in the northern neighbor—far less than the vast reserves estimated to be in China.

Following direct investment in the steel industry and domestic technology firms, the interior department said it was ready 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 in April.

He suggested that the US could use a sovereign wealth fund to speed production. “Why wouldn’t the richest nation in the world have the biggest sovereign wealth fund?” he asked.

Past Challenges and Prospects

American attempts to promote homegrown output have floundered in the past when Chinese producers lowered prices, making unsupported rare-earth development uneconomic against China’s lower cost of production and long-term strategic outlook.

In the past, a market expert stated before a US Senate committee that “nations that fund in battery capacity and supply chains today are poised to dominate this industry for the foreseeable future. It is not too late for the US but immediate steps are required.”

Five years on, a scramble to build international partnerships around rare earths is speeding up.

“Soon, we’ll have an abundance of essential resources that you won’t know what to do with them,” the President told reporters. That came eight months after a demand for compensation in the form of natural resources from another country. In September, the authorities in Asia signed a deal with an US firm, securing rights to minerals such as key metals.

Can the US Succeed?

But, is America able to close its gap and loosen China’s hold on rare-earth supply chains? “America has implemented major measures already,” a specialist comments. The US, he continues, cannot be “self-reliant in the near future because it requires years to start operations and establish processing plants.”