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Last week, a top US official came back from South Carolina brandishing a small piece of metal, proclaiming it was the first rare-earth magnet made in the US in decades.

He indicated that this was proof the US is breaking “Beijing's grip on our industrial pipeline.” Because of a recently opened rare-earth mineral refining facility in South Carolina, the official continued, “America is reclaiming its self-sufficiency.”

Breaking China’s Dominance in Critical Materials

Ending China’s refining and production supremacy in these materials, which are essential for advanced electronics, energy storage, and armaments, is a top priority for the current US administration. Using tariffs and other approaches, the US is relying on bringing the industry back to US soil.

These tariffs led Beijing to restrict rare-earth shipments to the US and pushed US leaders to sign deals with an ally, Malaysia, Cambodia, and Japan.

Although the US and China have since brokered a trade truce on rare earths, China—with around the majority of global mining and over 90% of global processing capacity—has a head start that may prove challenging to diminish.

“These materials are used in EV engines but also in defense technology that have obvious applications for the military,” notes a market analyst. “Any device that has a decent magnet in it uses rare earths.”

Challenging Path for US Independence

There’s no easy fix for the US to reduce its reliance on imports from China of materials critical to defense, chip manufacturing, and the shift from fossil fuels to wind and solar. Data from official sources, the US brought in 80% 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 reaches 99%. Dysprosium and terbium are found in magnets crucial to EV motors and generators in wind turbines, along with applications for mobile devices, high-intensity lighting, and nuclear reactors.

Extended Timelines and Global Deposits

Initiatives to cut the US’s dependence on Chinese production of rare-earth minerals could take years. Experts note that “These minerals” is not entirely accurate because they’re not that uncommon in the earth’s crust, but many deposits, such as those in Ukraine, where a deal was made earlier this year, are only in the early stages of mining.

“It’s not that there’s a shortage itself, it’s that China can control how much is sent abroad,” a specialist said, adding that obtaining permits from China can be a lengthy, difficult process.

The Arctic region, another focus of US attention, and South America, are additional nations with significant rare-earth deposits. 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

Recently, the US Department of Defense became the major investor in a mining company, with plans to open a new “mine-to-magnet” plant, called a new facility, to produce magnets essential for military aircraft, drones, and submarines.

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

Mirroring government funding in other sectors and US chipmakers, the interior department said it was prepared to make targeted funding in strategic resource firms.

“The US is up against state capital because China is picking these strategically that they aim to control,” a cabinet member stated during a address this spring.

He suggested that the US could use a sovereign wealth fund to speed production. “How could the wealthiest country in the world not possess the largest state investment fund?” he questioned.

Past Challenges and Prospects

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

In the past, a market expert testified before a congressional panel that “those who invest in energy storage and supply chains now are poised to lead this sector for generations to come. It is not too late for the US but action is needed now.”

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

“In about a year from now, we’ll have an abundance of essential resources that you won’t know what to do with them,” the President told reporters. This followed eight months after a request for compensation in the form of minerals from Ukraine. More recently, the government of Pakistan signed a deal with an US firm, securing rights to minerals such as key metals.

Can the US Succeed?

However, is America able to close its shortfall and loosen China’s hold on rare-earth supply chains? “America has implemented really significant steps so far,” an analyst comments. The nation, he adds, cannot be “self-reliant in the short term because it requires years to bring a mine online and build refining capacity.”