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Recently, a top US official came back from a southern state brandishing a tiny sample of metal, proclaiming it was the first rare-earth magnet manufactured in the US in a quarter of a century.

He indicated that this was proof the US is overcoming “China's dominance on our industrial pipeline.” Because of a new rare-earth mineral manufacturing plant in South Carolina, he added, “We’re finally becoming independent again.”

Breaking Beijing's Control in Essential Minerals

Overthrowing Beijing's processing and manufacturing dominance in these minerals, which are essential for advanced electronics, energy storage, and military equipment, is a top priority for the federal government. Via economic tools and other approaches, the US is counting on returning the industry back to American shores.

These measures led China to restrict rare-earth exports to the US and motivated the administration to forge agreements with an ally, Malaysia, 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—has a head start that may prove challenging to diminish.

“These materials are used in electric motors but also in defense technology that have obvious applications for the military,” notes an industry expert. “Anything that has a decent magnet in it uses rare earths.”

No Easy Fix for American Self-Sufficiency

It won't be simple for the US to reset its dependence on Chinese production of materials critical to national security, semiconductor production, and the transition from traditional energy to wind and solar. Data from official sources, the US brought in the vast majority of the rare earths it used in recent years.

In the case of rare-earth minerals such as a key element, essential for semiconductors, and samarium, critical for defense systems, China's control over processing reaches 99%. Dysprosium and terbium are used in magnets essential for EV motors and power systems in renewable energy, along with applications for cellphones, high-intensity lighting, and nuclear reactors.

Extended Timelines and International Resources

Efforts to cut the US’s dependence on China's output of rare-earth minerals may require a long time. Experts note that “Rare earths” is not entirely accurate because they’re not that uncommon in the earth’s crust, but many reserves, such as those in Eastern Europe, where a deal was made recently, are only in the initial phases of extraction.

“The issue isn't scarcity itself, it’s that China can limit how much is exported,” an analyst explained, noting that securing permits from China can be a complex and time-consuming endeavor.

Greenland, another focus of American interest, and South America, are additional nations with substantial rare-earth resources. In the continental US, there are deposits in California, the Midwest, and the central US, with the largest operational mine located at Mountain Pass, the state, not far from Las Vegas.

Federal Efforts and Investment

In July, the US Department of Defense became the major investor in an industry operator, with intentions to open a new “integrated” plant, called 10X, to make magnets essential for military aircraft, drones, and submarines.

In North America, measured and indicated resources of rare earths were calculated at 3.6m tons in the US and additional millions in the northern neighbor—far less than the 44m tons estimated to be in China.

Mirroring government funding in the steel industry and domestic technology firms, the federal agency said it was ready to make direct investments in critical mineral companies.

“The US is up against government-backed investment because Beijing is selecting these strategically that they want to invest in,” a cabinet member stated during a address in April.

The official floated that the US could use a sovereign wealth fund to accelerate production. “How could the richest nation in the world not possess the largest sovereign wealth fund?” he asked.

Historical Obstacles and Future Outlook

American attempts to promote homegrown output have struggled 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.

Five years ago, a market expert testified before a US Senate committee that “those who invest in energy storage and supply chains now are likely to lead this industry for the foreseeable future. It is not too late for the US but immediate steps are required.”

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

“In about a year from now, we’ll have so much essential resources that you won’t know what to do with them,” a top leader informed reporters. That came in the wake of a demand for compensation in the form of natural resources from Ukraine. More recently, the government of Pakistan signed a contract with an US firm, securing rights to minerals such as antimony and copper.

Prospects for Success

But, is America able to close its shortfall and loosen China’s hold on rare-earth supply chains? “The US has taken really significant steps so far,” an analyst says. The US, he adds, cannot be “self-reliant in the short term because it takes time to start operations and build refining capacity.”