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Not long ago, a top US official returned from South Carolina displaying a tiny sample of metal, proclaiming it was the first rare-earth magnet produced in the US in 25 years.

The official stated that this was evidence the US is overcoming “China’s chokehold on our supply chain.” Thanks to a new rare-earth mineral manufacturing plant in the state, the official continued, “We’re finally becoming independent again.”

Countering China’s Dominance in Essential Minerals

Reducing Beijing's refining and production supremacy in these materials, which are vital for some semiconductors, batteries, and military equipment, is a major focus for the American leadership. Using tariffs and other approaches, the US is betting on returning the industry back to US soil.

These tariffs prompted China to limit rare-earth shipments to the US and motivated US leaders to forge agreements with an ally, Malaysia, another nation, and Japan.

While the US and China have now brokered a temporary agreement on rare earths, Beijing—with approximately the majority of worldwide extraction and nearly all of international refining—has a head start that may prove challenging to erode.

“Rare earths are used in EV engines but also in defense technology that have obvious applications for the military,” says an industry expert. “Any device that has a strong magnet in it requires rare earths.”

Challenging Path for US Independence

There’s no easy fix for the US to reset its dependence on Chinese production of minerals essential to national security, chip manufacturing, 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 used in recent years.

In the case of rare-earth minerals such as a key element, essential for semiconductors, and another mineral, critical for military applications, China's control over processing rises to almost total. These elements are found in magnets crucial to EV motors and power systems in wind turbines, along with applications for cellphones, advanced lighting, and nuclear reactors.

Extended Timelines and Global Deposits

Initiatives to reduce the US’s dependence on Chinese production of rare-earth minerals may require a long time. 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 made earlier this year, are only in the early stages of extraction.

“The issue isn't scarcity itself, it’s that Beijing can control how much is exported,” a specialist explained, adding that obtaining export licenses from China can be a lengthy, difficult process.

The Arctic region, a key area of US attention, and South America, are additional nations with significant rare-earth resources. In the continental US, there are reserves in the West, Wyoming, and the central US, with the biggest active site located at Mountain Pass, California, about 60 miles from Las Vegas.

Government Initiatives and Investment

Recently, the Pentagon became the major investor in an industry operator, with intentions to open a new “mine-to-magnet” plant, called a new facility, to produce magnets crucial for military aircraft, unmanned systems, and submarines.

In North America, estimated reserves of rare earths were calculated at 3.6m tons in the US and more than 14m tons in Canada—significantly lower than the 44m tons estimated to be in China.

Following direct investment in the steel industry and US chipmakers, the interior department said it was ready to make direct investments in strategic resource firms.

“The US is up against state capital because Beijing is selecting these strategically that they aim to control,” a senior official stated during a speech in April.

The official floated that the US could utilize a sovereign wealth fund to accelerate production. “Why wouldn’t the wealthiest country in the world have the biggest state investment fund?” he questioned.

Historical Obstacles and Future Outlook

US efforts to promote domestic production have struggled in the past when Chinese producers lowered prices, rendering unsubsidized rare-earth development uneconomic against China’s lower cost of production and long-term strategic outlook.

Five years ago, an industry leader stated before a US Senate committee that “those who invest in battery capacity and supply chains today 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 assemble trading alliances around rare earths is speeding up.

“In about a year from now, we’ll have an abundance of essential resources that supply will exceed demand,” a top leader informed the media. This followed eight months after a demand for payment in the form of natural resources from Ukraine. More recently, the government of Pakistan signed a contract with an American company, securing rights to minerals such as key metals.

Can the US Succeed?

But, is America able to close its shortfall and loosen Beijing's grip on rare-earth supply chains? “America has implemented major measures so far,” a specialist comments. The US, he continues, cannot be “independent in the short term because it requires years to bring a mine online and establish processing plants.”