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Last week, a top US official returned from a southern state brandishing a small piece of metal, declaring it was the first rare-earth magnet manufactured in the US in a quarter of a century.

He remarked that this was a sign the US is breaking “China's dominance on our industrial pipeline.” Thanks to a recently opened rare-earth mineral processing center in the state, he added, “The nation is regaining its autonomy.”

Breaking Beijing's Control in Critical Materials

Overthrowing Beijing's processing and manufacturing dominance in these minerals, which are essential for some semiconductors, batteries, and armaments, is a major focus for the current US administration. Using tariffs and other strategies, the US is betting on returning the industry home to US soil.

These tariffs prompted Beijing to restrict rare-earth shipments to the US and motivated the administration to forge agreements with an ally, Malaysia, another nation, and a key Asian economy.

Although the US and China have since reached a temporary agreement on rare earths, Beijing—with approximately 70% of global mining and over 90% of international refining—has a head start that may prove challenging to overcome.

“Rare earths are used in EV engines but also in guidance systems that have clear uses for the military,” says a market analyst. “Anything that has a strong magnet in it requires rare earths.”

No Easy Fix for US Independence

It won't be simple for the US to reset its reliance on Chinese production of materials critical to defense, chip manufacturing, and the transition from fossil fuels to wind and solar. According to official sources, the US brought in the vast majority of the rare earths it used in recent years.

For some rare-earth minerals such as dysprosium, used in 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 generators in renewable energy, along with uses in mobile devices, advanced lighting, and nuclear reactors.

Extended Timelines 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 not that uncommon in the earth’s crust, but many reserves, such as those in Eastern Europe, where an agreement 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 Beijing can control how much is exported,” a specialist said, adding that securing export licenses from China can be a complex and time-consuming endeavor.

Greenland, another focus of American interest, and South America, are additional nations with significant rare-earth deposits. Domestically, there are deposits in California, the Midwest, and the central US, with the biggest active site operating at Mountain Pass, the state, about 60 miles from a major city.

Federal Efforts and Investment

In July, the Pentagon became the largest shareholder in an industry operator, with intentions to open a new “integrated” plant, named 10X, to produce magnets crucial for military aircraft, drones, and submarines.

In North America, estimated reserves of rare earths were estimated to include 3.6m tons in the US and additional millions in the northern neighbor—far less than the 44m tons believed to be in the Asian giant.

Mirroring government funding in other sectors and domestic technology firms, the interior department announced it was ready to make targeted funding in strategic resource firms.

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

The official floated that the US could use a national investment pool to accelerate production. “How could the richest nation in the world not possess the biggest state investment fund?” he questioned.

Historical Obstacles and Prospects

American attempts to support homegrown output have floundered in the past when China lowered prices, making unsupported rare-earth development unprofitable against Asia's competitive pricing 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 lead this sector for the foreseeable future. It is not too late for the US but immediate steps are required.”

Five years on, a scramble to build trading alliances around rare earths is speeding up.

“Soon, we’ll have so much essential resources that supply will exceed demand,” a top leader informed reporters. This followed eight months after a demand for payment in the form of natural resources from Ukraine. More recently, the authorities in Asia signed a contract with an American company, giving it access to minerals such as key metals.

Prospects for Success

However, can the US make up its shortfall and loosen China’s hold on rare-earth global networks? “The US has taken 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.”