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Not long ago, the US Treasury Secretary came back from South Carolina displaying a small piece of metal, announcing it was the first rare-earth magnet made in the US in 25 years.

He indicated that this was a sign the US is ending “Beijing's grip on our industrial pipeline.” Thanks to a recently opened rare-earth mineral refining facility in South Carolina, he added, “America is reclaiming its self-sufficiency.”

Challenging Beijing's Control in Critical Materials

Ending Beijing's processing and manufacturing dominance in these minerals, which are essential for advanced electronics, energy storage, and military equipment, is a key goal for the federal government. Using trade measures and other approaches, the US is betting on returning the industry back to US soil.

Such tariffs prompted China to restrict rare-earth exports to the US and motivated US leaders to forge agreements with Australia, Malaysia, another nation, and a key Asian economy.

Although the US and China have now brokered a temporary agreement on rare earths, Beijing—with approximately 70% of worldwide extraction and nearly all of global processing capacity—holds an advantage that will be difficult to overcome.

“Rare earths are used in EV engines but also in guidance systems that have clear uses for the defense department,” notes an industry expert. “Anything that has a strong magnet in it uses rare earths.”

Challenging Path for American Self-Sufficiency

There’s no easy fix for the US to reset its reliance on imports from China of materials essential to defense, semiconductor production, and the transition from fossil fuels to wind and solar. Data from federal reports, the US brought in 80% of the rare earths it used in recent years.

For some rare-earth minerals such as dysprosium, essential for chip production, and samarium, critical for military applications, 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.

Extended Timelines and International Resources

Efforts to reduce the US’s dependence on China's output of rare-earth minerals may require a long time. Analysts point out that “Rare earths” is somewhat of a misnomer because they’re relatively abundant in the planet's surface, but many reserves, such as those in Ukraine, where a deal was signed earlier this year, are only in the initial phases of mining.

“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 obtaining permits from China can be a lengthy, difficult process.

Greenland, a key area of US attention, and South America, are two other countries with significant rare-earth deposits. Domestically, there are reserves in California, Wyoming, and the central US, with the largest operational mine located at Mountain Pass, the state, not far from Las Vegas.

Federal Efforts and Investment

In July, the US Department of Defense took on the role of the largest shareholder in a mining company, with intentions to open a new “integrated” plant, named 10X, to produce magnets crucial for military aircraft, unmanned systems, 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 the northern neighbor—significantly lower than the 44m tons believed to be in China.

Mirroring direct investment in the steel industry and US chipmakers, the federal agency announced it was ready to make targeted funding in critical mineral companies.

“You’re competing against state capital because China is picking these as priority areas that they want to invest in,” a senior official said during a address in April.

The official suggested that the US could use a national investment pool to accelerate production. “How could the wealthiest country in the world have the largest sovereign wealth fund?” he questioned.

Past Challenges and Future Outlook

American attempts to support domestic production have struggled in the past when China lowered prices, making unsupported rare-earth development unprofitable against China’s lower cost of production and far-sighted planning.

Five years ago, an industry leader stated before a US Senate committee that “those who invest in energy storage and supply chains now are poised to lead this industry for generations to come. It is not too late for the US but action is needed now.”

Five years on, a race to assemble trading alliances around rare earths is speeding up.

“In about a year from now, we’ll have so much essential resources that supply will exceed demand,” the President informed reporters. This followed eight months after a request for payment in the form of minerals from another country. In September, the government of Pakistan signed a contract with an American company, giving it access to minerals such as antimony and copper.

Can the US Succeed?

But, is America able to close its gap and loosen Beijing's grip on rare-earth global networks? “America has implemented major measures already,” an analyst comments. The nation, he continues, cannot be “independent in the near future because it requires years to start operations and establish processing plants.”