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Last week, the US Treasury Secretary returned from South Carolina brandishing a tiny sample of metal, proclaiming it was the first rare-earth magnet produced in the US in decades.

He indicated that this was a sign the US is ending “China's dominance on our supply chain.” Because of a recently opened rare-earth mineral manufacturing plant in the state, the official continued, “America is reclaiming its self-sufficiency.”

Breaking China’s Dominance in Critical Materials

Overthrowing China’s processing and manufacturing dominance in these materials, which are crucial for some semiconductors, batteries, and military equipment, is a top priority for the federal government. Using trade measures and other approaches, the US is counting on bringing the industry home to domestic facilities.

These tariffs prompted Beijing to restrict rare-earth shipments to the US and motivated US leaders to sign deals with Australia, a partner, Cambodia, and a key Asian economy.

While the US and China have since brokered a temporary agreement on rare earths, Beijing—with approximately 70% of global mining and nearly all of international refining—has a head start that will be difficult to overcome.

“These materials 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 uses rare earths.”

Challenging Path for US Independence

There’s no easy fix for the US to reduce its reliance on Chinese production of minerals essential to national security, semiconductor production, and the shift 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 a key element, used in semiconductors, and samarium, essential to military applications, Chinese refinement dominance reaches almost total. These elements are found in magnets crucial to EV motors and power systems in wind turbines, along with applications for mobile devices, high-intensity lighting, and energy plants.

Long-Term Efforts and Global Deposits

Efforts to reduce the US’s dependence on China's output of rare-earth minerals could take years. Experts note 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 Eastern Europe, where a deal was made earlier this year, are only in the initial phases of mining.

“The issue isn't scarcity itself, it’s that China can limit how much is exported,” a specialist said, noting that securing export licenses from China can be a lengthy, difficult process.

Greenland, a key area of American interest, and South America, are additional nations with substantial rare-earth resources. Domestically, there are reserves in California, the Midwest, and Missouri, with the biggest active site operating at a key location, the state, about 60 miles from a major city.

Federal Efforts and Funding

Recently, the Pentagon took on the role of the major investor in a mining company, with intentions to open a new “mine-to-magnet” plant, called 10X, to make magnets crucial for F-35 fighter jets, drones, and naval vessels.

Across the continent, estimated reserves of rare earths were estimated to include millions of tons in the US and additional millions in the northern neighbor—significantly lower than the vast reserves estimated to be in the Asian giant.

Following government funding in other sectors and domestic technology firms, the federal agency announced it was ready to make direct investments in critical mineral companies.

“You’re competing against state capital because China is selecting these strategically that they want to invest in,” a senior official said during a address this spring.

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

Past Challenges and Future Outlook

American attempts to promote domestic production have floundered in the past when Chinese producers cut costs, rendering unsupported rare-earth development uneconomic against Asia's competitive pricing and long-term strategic outlook.

Five years ago, an industry leader stated before a congressional panel that “those who invest in energy storage and industrial networks today are likely to dominate 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 build international partnerships around rare earths is accelerating.

“Soon, we’ll have an abundance of essential resources that supply will exceed demand,” a top leader told reporters. That came eight months after a demand for payment in the form of natural resources from another country. More recently, the authorities in Asia agreed to a contract with an American company, giving it access to minerals such as key metals.

Can the US Succeed?

But, is America able to close its shortfall and loosen China’s hold on rare-earth global networks? “America has implemented major measures already,” a specialist comments. The nation, he adds, cannot be “independent in the short term because it requires years to bring a mine online and build refining capacity.”