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Last week, a top US official came back from South Carolina brandishing a tiny sample of metal, proclaiming it was the initial rare-earth magnet manufactured in the US in a quarter of a century.

The official stated that this was evidence the US is overcoming “China's dominance on our supply chain.” Thanks to a recently opened rare-earth mineral manufacturing plant in South Carolina, he noted, “The nation is regaining its autonomy.”

Countering China’s Dominance in Essential Minerals

Ending Beijing's refining and production supremacy in these materials, which are vital for advanced electronics, batteries, and armaments, is a top priority for the federal government. Using tariffs and other strategies, the US is relying on bringing the industry home to domestic facilities.

Such tariffs prompted Beijing to limit rare-earth shipments to the US and pushed US leaders to sign deals with Australia, Malaysia, Cambodia, and a key Asian economy.

While the US and China have now reached a trade truce on rare earths, Beijing—with around the majority of global mining and nearly all of international refining—has a head start that will be difficult to overcome.

“Rare earths are essential for electric motors but also in guidance systems that have obvious applications for the military,” notes an industry expert. “Anything that has a decent magnet in it requires rare earths.”

Challenging Path for US Independence

There’s no easy fix for the US to reset its reliance on Chinese production of materials critical to defense, semiconductor production, and the shift from traditional energy to renewable sources. Data from federal reports, the US brought in the vast majority of the rare earths it used in recent years.

For some rare-earth minerals such as a key element, used in semiconductors, and samarium, essential to military applications, Chinese refinement dominance rises to 99%. Dysprosium and terbium are used in magnets essential for EV motors and power systems in renewable energy, along with uses in cellphones, high-intensity lighting, and energy plants.

Extended Timelines and Global Deposits

Efforts to cut the US’s reliance on Chinese production of rare-earth minerals could take years. Analysts point out that “Rare earths” is somewhat of a misnomer because they’re not that uncommon in the earth’s crust, but many reserves, including those in Ukraine, where an agreement was made recently, are only in the early stages of extraction.

“The issue isn't scarcity itself, it’s that China can limit how much is sent abroad,” a specialist explained, noting that obtaining export licenses from China can be a complex and time-consuming endeavor.

The Arctic region, a key area of American interest, and South America, are two other countries with significant rare-earth resources. Domestically, there are reserves in California, Wyoming, and Missouri, with the biggest active site operating at a key location, the state, about 60 miles from Las Vegas.

Federal Efforts and Funding

In July, the Pentagon took on the role of the major investor in a mining company, with intentions to open a new “integrated” plant, called a new facility, to make magnets essential for F-35 fighter jets, unmanned systems, and naval vessels.

In North America, measured and indicated resources of rare earths were estimated to include 3.6m tons in the US and more than 14m tons in the northern neighbor—far less than the 44m tons believed to be in the Asian giant.

Following direct investment in the steel industry and domestic technology firms, the interior department announced it was prepared to make direct investments in strategic resource firms.

“You’re competing against government-backed investment because Beijing is selecting these as priority areas that they want to invest in,” a senior official stated during a address in April.

He suggested that the US could utilize a sovereign wealth fund to speed production. “How could the wealthiest country in the world have the biggest state investment fund?” he questioned.

Past Challenges and Future Outlook

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

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

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

“In about a year from now, we’ll have an abundance of critical mineral and rare earths that supply will exceed demand,” the President told reporters. This followed in the wake of a request for compensation in the form of natural resources from Ukraine. In September, the authorities in Asia signed a contract with an US firm, securing rights to minerals such as key metals.

Can the US Succeed?

However, can the US make up its shortfall and weaken Beijing's grip on rare-earth supply chains? “The US has taken really significant steps so far,” an analyst comments. The nation, he continues, is unlikely to become “independent in the near future because it requires years to start operations and establish processing plants.”