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Recently, the US Treasury Secretary came back from a southern state brandishing a small piece of metal, announcing it was the initial rare-earth magnet produced in the US in decades.

He remarked that this was a sign the US is breaking “Beijing's grip on our industrial pipeline.” Thanks to a new rare-earth mineral refining facility in South Carolina, he added, “We’re finally becoming independent again.”

Countering China’s Dominance in Critical Materials

Ending China’s refining and production supremacy in these materials, which are vital for advanced electronics, batteries, and armaments, is a top priority for the current US administration. Using economic tools and other strategies, the US is counting on bringing the industry home to domestic facilities.

Such measures led Beijing to restrict rare-earth shipments to the US and pushed US leaders to forge agreements with Australia, Malaysia, Cambodia, and Japan.

While the US and China have since brokered a trade truce on rare earths, Beijing—with approximately the majority of worldwide extraction and nearly all of international refining—has a head start that will be difficult to erode.

“These materials are essential for EV engines but also in defense technology that have obvious applications for the defense department,” notes a market analyst. “Anything that has a strong magnet in it requires rare earths.”

No Easy Fix for US Independence

It won't be simple for the US to reset its reliance on Chinese production of minerals critical to defense, chip manufacturing, and the transition from fossil fuels to renewable sources. According to official sources, the US imported the vast majority of the rare earths it used in recent years.

In the case of rare-earth minerals such as dysprosium, essential for semiconductors, and samarium, critical for defense systems, Chinese refinement dominance reaches almost total. Dysprosium and terbium are used in magnets crucial to EV motors and power systems in renewable energy, along with uses in mobile devices, advanced lighting, and nuclear reactors.

Long-Term Efforts and International Resources

Efforts to cut the US’s dependence on Chinese production of rare-earth minerals may require a long time. Analysts point out that “Rare earths” 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 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 sent abroad,” a specialist explained, adding that obtaining export licenses from China can be a complex and time-consuming endeavor.

Greenland, another focus of US attention, and Brazil, are two other countries with significant rare-earth deposits. Domestically, there are reserves in the West, the Midwest, and Missouri, with the largest operational mine located at Mountain Pass, California, about 60 miles from a major city.

Government Initiatives and Funding

In July, the Pentagon took on the role of the major investor in an industry operator, with intentions to open a new “integrated” plant, named 10X, to make magnets crucial for military aircraft, drones, and submarines.

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—significantly lower than the 44m tons believed to be in the Asian giant.

Following direct investment in other sectors and domestic technology firms, the interior department announced it was prepared to make targeted funding in critical mineral companies.

“You’re competing against government-backed investment because China is picking these strategically that they want to invest in,” a senior official said during a speech in April.

He suggested that the US could use a sovereign wealth fund to accelerate production. “Why wouldn’t the richest nation 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 China cut costs, making unsubsidized rare-earth development uneconomic against Asia's competitive pricing and long-term strategic outlook.

In the past, an industry leader testified before a congressional panel that “those who invest in energy storage and supply chains today are poised to lead this sector for generations to come. It is not too late for the US but immediate steps are required.”

Five years on, a race 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,” the President informed reporters. That came eight months after a request for compensation in the form of natural resources from Ukraine. In September, the authorities in Asia signed a deal with an US firm, giving it access to minerals such as key metals.

Can the US Succeed?

But, is America able to close its gap and weaken Beijing's grip on rare-earth supply chains? “America has implemented major measures already,” a specialist says. The nation, he adds, is unlikely to become “independent in the near future because it takes time to start operations and build refining capacity.”