Not long ago, a top US official returned from a southern state holding up a small piece of metal, proclaiming it was the initial rare-earth magnet produced in the US in decades.
He remarked that this was a sign the US is ending “China's dominance on our supply chain.” Thanks to a new rare-earth mineral refining facility in South Carolina, the official continued, “America is reclaiming its self-sufficiency.”
Breaking Beijing's Control in Essential Minerals
Ending China’s refining and production supremacy in these materials, which are essential for advanced electronics, batteries, and military equipment, is a key goal for the American leadership. Using trade measures and other strategies, the US is counting on bringing the industry back to US soil.
These tariffs led Beijing to restrict rare-earth exports to the US and pushed the administration to forge agreements with an ally, Malaysia, Cambodia, and a key Asian economy.
While the US and China have now brokered a temporary agreement on rare earths, China—with around 70% of global mining and over 90% of international refining—holds an advantage that may prove challenging to erode.
“Rare earths are essential for electric motors but also in defense technology that have clear uses for the military,” notes an industry expert. “Any device that has a decent magnet in it requires rare earths.”
Challenging Path for US Independence
It won't be simple for the US to reduce its reliance on Chinese production of materials essential to national security, chip manufacturing, and the shift from fossil fuels to renewable sources. Data from federal reports, the US imported 80% of the rare earths it used in 2024.
For some rare-earth minerals such as a key element, used in semiconductors, and another mineral, essential to defense systems, China's control over processing rises to 99%. Dysprosium and terbium are found in magnets essential for electric engines and generators in wind turbines, along with uses in mobile devices, high-intensity lighting, and nuclear reactors.
Long-Term Efforts and International Resources
Initiatives to cut the US’s reliance on Chinese production of rare-earth minerals may require a long time. Analysts point out that “These minerals” is not entirely accurate because they’re relatively abundant in the planet's surface, but many reserves, such as those in Ukraine, where a deal was signed recently, are only in the initial phases of extraction.
“The issue isn't scarcity itself, it’s that China can limit how much is exported,” an analyst explained, noting that obtaining export licenses from China can be a lengthy, difficult process.
The Arctic region, a key area of American interest, and Brazil, are two other countries with substantial rare-earth resources. In the continental US, there are reserves in the West, the Midwest, and the central US, with the biggest active site located at Mountain Pass, California, not far from a major city.
Government Initiatives and Funding
In July, the Pentagon took on the role of the major investor in a mining company, with intentions to open a new “mine-to-magnet” plant, named a new facility, to make magnets essential for military aircraft, unmanned systems, and submarines.
In North America, estimated reserves of rare earths were calculated at 3.6m tons in the US and additional millions in Canada—significantly lower than the 44m tons estimated to be in China.
Mirroring direct investment in the steel industry and domestic technology firms, the federal agency said it was prepared to make targeted funding in critical mineral companies.
“You’re competing against government-backed investment because Beijing is selecting these strategically that they aim to control,” a senior official stated during a speech this spring.
The official suggested that the US could utilize a sovereign wealth fund to accelerate production. “Why wouldn’t the wealthiest country in the world not possess the biggest sovereign wealth fund?” he questioned.
Past Challenges and Future Outlook
US efforts to support domestic production have floundered in the past when China cut costs, making unsubsidized rare-earth development unprofitable against China’s lower cost of production and far-sighted planning.
Five years ago, a market expert stated before a US Senate committee that “nations that fund in energy storage and supply chains today are poised to dominate this sector for the foreseeable future. There is still time for the US but immediate steps are required.”
Since then, a race to build trading alliances 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 informed reporters. That came in the wake of a demand for compensation in the form of minerals from Ukraine. In September, the government of Pakistan signed a contract with an American company, giving it access to minerals such as key metals.
Can the US Succeed?
But, can the US make up its gap 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 “independent in the near future because it takes time to bring a mine online and build refining capacity.”
