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Recently, the US Treasury Secretary came back from South Carolina brandishing a tiny sample of metal, proclaiming it was the first rare-earth magnet made 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 supply chain.” Due to a new rare-earth mineral refining facility in South Carolina, he noted, “We’re finally becoming independent again.”

Challenging Beijing's Control in Essential Minerals

Overthrowing China’s refining and production supremacy in these minerals, which are vital for some semiconductors, energy storage, and armaments, is a top priority for the federal government. Through trade measures and other approaches, the US is relying on bringing the industry back to domestic facilities.

These measures prompted China to restrict rare-earth shipments to the US and pushed US leaders to sign deals with an ally, a partner, Cambodia, and Japan.

While the US and China have since brokered a temporary agreement on rare earths, China—with approximately the majority of global mining and over 90% of international refining—has a head start that may prove challenging to erode.

“These materials are essential for EV engines but also in guidance systems that have obvious applications for the military,” notes an industry expert. “Any device that has a strong magnet in it requires rare earths.”

No Easy Fix for American Self-Sufficiency

There’s no easy fix for the US to reduce its dependence on imports from China of materials essential to national security, chip manufacturing, and the transition from fossil fuels to wind and solar. Data from official sources, the US brought in 80% of the rare earths it consumed in recent years.

In the case of rare-earth minerals such as a key element, used in semiconductors, and samarium, critical for military applications, Chinese refinement dominance rises to almost total. Dysprosium and terbium are used in magnets crucial to EV motors and generators in wind turbines, along with uses in mobile devices, high-intensity lighting, and nuclear reactors.

Extended Timelines and Global Deposits

Efforts to cut the US’s dependence on China's output of rare-earth minerals could take years. Experts note that “These minerals” is not entirely accurate because they’re relatively abundant in the earth’s crust, but many deposits, such as those in Eastern Europe, where a deal was signed recently, are only in the initial phases of mining.

“It’s not that there’s a shortage per se, it’s that Beijing can limit how much is sent abroad,” an analyst explained, noting that securing export licenses from China can be a complex and time-consuming endeavor.

Greenland, a key area of US attention, and South America, are additional nations with significant rare-earth deposits. Domestically, there are deposits in the West, Wyoming, and the central US, with the largest operational mine located at a key location, California, not far from Las Vegas.

Federal Efforts and Funding

Recently, the US Department of Defense became the major investor in an industry operator, with intentions to open a new “mine-to-magnet” plant, named 10X, to produce magnets crucial for military aircraft, drones, and naval vessels.

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

Following government funding in other sectors and domestic technology firms, the interior department said it was prepared to make direct investments in strategic resource firms.

“The US is up against government-backed investment because China is selecting these strategically that they aim to control,” a senior official stated during a address this spring.

The official suggested that the US could utilize a national investment pool to speed production. “How could the wealthiest country in the world have the largest state investment fund?” he asked.

Past Challenges and Future Outlook

US efforts to support homegrown output have struggled in the past when Chinese producers lowered prices, making unsubsidized rare-earth development uneconomic against Asia's competitive pricing and long-term strategic outlook.

In the past, a market expert testified before a congressional panel that “those who invest in energy storage and industrial networks today are likely to dominate this sector for the foreseeable future. There is still time for the US but action is needed now.”

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

“In about a year from now, we’ll have an abundance of essential resources that you won’t know what to do with them,” a top leader told reporters. That came in the wake of a request for payment in the form of natural resources from another country. More recently, the government of Pakistan agreed to a deal with an American company, giving it access to minerals such as antimony and copper.

Can the US Succeed?

However, can the US make up its gap and weaken China’s hold on rare-earth supply chains? “America has implemented really significant steps so far,” a specialist says. The US, he adds, is unlikely to become “independent in the short term because it takes time to start operations and build refining capacity.”