Last week, a top US official returned from a southern state holding up a tiny sample of metal, proclaiming it was the first rare-earth magnet made in the US in a quarter of a century.
He indicated that this was evidence the US is overcoming “China's dominance on our supply chain.” Due to a new rare-earth mineral refining facility in the state, he added, “America is reclaiming its self-sufficiency.”
Breaking Beijing's Control in Essential Minerals
Overthrowing China’s refining and production supremacy in these materials, which are vital for some semiconductors, energy storage, and armaments, is a top priority for the current US administration. Using tariffs and other approaches, the US is relying on returning the industry home to US soil.
These tariffs prompted Beijing to limit rare-earth exports to the US and motivated the administration to forge agreements with Australia, Malaysia, Cambodia, and Japan.
While the US and China have since reached a temporary agreement on rare earths, China—with around 70% of worldwide extraction and over 90% of international refining—holds an advantage that will be difficult to diminish.
“These materials are used in EV engines but also in defense technology that have obvious applications for the defense department,” says an industry expert. “Any device that has a decent magnet in it uses rare earths.”
Challenging Path for American Self-Sufficiency
It won't be simple for the US to reduce its reliance on imports from China of materials essential to national security, chip manufacturing, and the shift from traditional energy to renewable sources. According to official sources, the US brought in 80% of the rare earths it consumed in 2024.
For some rare-earth minerals such as dysprosium, used in chip production, and samarium, essential to military applications, China's control over processing reaches almost total. These elements are found in magnets crucial to electric engines and generators in renewable energy, along with uses in mobile devices, high-intensity lighting, and nuclear reactors.
Extended Timelines and International Resources
Initiatives to reduce the US’s reliance on Chinese production of rare-earth minerals could take years. Experts note that “Rare earths” is not entirely accurate because they’re relatively abundant in the planet's surface, but many deposits, including those in Eastern Europe, where an agreement was made recently, are only in the initial phases of extraction.
“It’s not that there’s a shortage per se, it’s that China can control how much is exported,” a specialist said, adding that securing permits from China can be a lengthy, difficult process.
The Arctic region, a key area of American interest, and South America, are additional nations with substantial rare-earth deposits. In the continental US, there are reserves in the West, Wyoming, and Missouri, with the largest operational mine located at a key location, California, about 60 miles from a major city.
Federal Efforts and Funding
In July, the Pentagon became the largest shareholder in a mining company, with plans to open a new “mine-to-magnet” plant, named 10X, to make magnets crucial for F-35 fighter jets, drones, and submarines.
Across the continent, estimated reserves of rare earths were calculated at millions of tons in the US and additional millions in Canada—far less than the vast reserves estimated to be in the Asian giant.
Following direct investment in other sectors and domestic technology firms, the federal agency said it was ready to make direct investments in critical mineral companies.
“You’re competing against state capital because China is picking these as priority areas that they aim to control,” a cabinet member stated during a address this spring.
The official floated that the US could use a national investment pool to accelerate production. “How could the wealthiest country in the world not possess the largest state investment fund?” he questioned.
Historical Obstacles and Future Outlook
US efforts to support homegrown output have struggled in the past when Chinese producers lowered prices, rendering unsubsidized rare-earth development unprofitable against China’s lower cost of production and long-term strategic outlook.
In the past, a market expert stated before a congressional panel that “nations that fund in battery capacity and industrial networks today are poised to lead this industry for the foreseeable future. It is not too late for the US but action is needed now.”
Five years on, a race to assemble international partnerships around rare earths is accelerating.
“Soon, we’ll have an abundance of essential resources that you won’t know what to do with them,” a top leader informed reporters. That came in the wake of a request for compensation in the form of minerals from another country. More recently, the authorities in Asia signed a deal with an US firm, securing rights 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, is unlikely to become “independent in the near future because it takes time to start operations and build refining capacity.”
