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Last week, a top US official came back from South Carolina holding up a tiny sample of metal, declaring it was the first rare-earth magnet made in the US in decades.

He remarked that this was proof the US is ending “Beijing's grip on our industrial pipeline.” Thanks to a recently opened rare-earth mineral manufacturing plant in South Carolina, he noted, “We’re finally becoming independent again.”

Breaking China’s Dominance in Essential Minerals

Reducing Beijing's processing and manufacturing dominance in these materials, which are essential for advanced electronics, batteries, and military equipment, is a key goal for the current US administration. Using trade measures and other strategies, the US is relying on returning the industry back to US soil.

These measures led China to limit rare-earth exports to the US and pushed US leaders to sign deals with Australia, Malaysia, another nation, and Japan.

While the US and China have since reached a trade truce on rare earths, Beijing—with around the majority of worldwide extraction and nearly all of global processing capacity—holds an advantage that may prove challenging to diminish.

“These materials are essential for EV engines but also in defense technology that have clear uses for the defense department,” says an industry expert. “Anything that has a decent magnet in it requires rare earths.”

Challenging Path for American Self-Sufficiency

It won't be simple for the US to reset its reliance on imports from China of minerals critical to national security, semiconductor production, 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.

For some rare-earth minerals such as a key element, used in chip production, and samarium, critical for defense systems, Chinese refinement dominance rises to almost total. These elements are used in magnets essential for EV motors and generators in renewable energy, along with applications for mobile devices, high-intensity lighting, and energy plants.

Long-Term Efforts and International Resources

Efforts to reduce the US’s dependence on Chinese production of rare-earth minerals could take years. Analysts point out that “Rare earths” is somewhat of a misnomer because they’re relatively abundant in the planet's surface, but many reserves, including those in Ukraine, where a deal was signed recently, are only in the early stages of extraction.

“It’s not that there’s a shortage per se, it’s that China can limit how much is exported,” a specialist explained, adding that securing export licenses from China can be a lengthy, difficult process.

The Arctic region, a key area of US attention, and Brazil, are two other countries with significant rare-earth resources. In the continental US, there are deposits in the West, Wyoming, and Missouri, with the largest operational mine located at Mountain Pass, the state, not far from Las Vegas.

Government Initiatives and Investment

In July, the US Department of Defense took on the role of the major investor in a mining company, with plans to open a new “integrated” plant, named 10X, to make magnets crucial for F-35 fighter jets, drones, and submarines.

Across the continent, measured and indicated resources of rare earths were calculated at 3.6m tons in the US and additional millions in Canada—far less than the vast reserves believed to be in China.

Mirroring government funding in the steel industry and US chipmakers, the federal agency said it was prepared to make direct investments in strategic resource firms.

“The US is up against government-backed investment because Beijing is picking these as priority areas that they want to invest in,” a senior official stated during a address in April.

He floated that the US could use a national investment pool to accelerate production. “Why wouldn’t the wealthiest country in the world not possess the biggest sovereign wealth fund?” he asked.

Historical Obstacles and Prospects

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

Five years ago, a market expert stated before a congressional panel that “those who invest in energy storage and supply chains now are likely to dominate this sector for generations to come. There is still time for the US but action is needed now.”

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

“Soon, we’ll have so much critical mineral and rare earths that supply will exceed demand,” a top leader told reporters. This followed eight months after a request for payment in the form of minerals from another country. More recently, the government of Pakistan agreed to a contract with an American company, securing rights to minerals such as antimony and copper.

Can the US Succeed?

But, is America able to close its shortfall and weaken China’s hold on rare-earth global networks? “The US has taken really significant steps already,” an analyst says. The US, he continues, cannot be “self-reliant in the near future because it takes time to bring a mine online and establish processing plants.”