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Not long ago, a top US official returned from South Carolina displaying a tiny sample of metal, announcing it was the first rare-earth magnet made in the US in a quarter of a century.

He remarked that this was evidence the US is overcoming “China’s chokehold on our supply chain.” Thanks to a new rare-earth mineral refining facility in South Carolina, the official continued, “The nation is regaining its autonomy.”

Countering China’s Dominance in Essential Minerals

Overthrowing Beijing's processing and manufacturing dominance in these materials, which are vital for some semiconductors, batteries, and military equipment, is a top priority for the federal government. Via trade measures and other strategies, the US is betting on returning the industry home to American shores.

These measures led China to restrict rare-earth exports to the US and pushed US leaders to forge agreements with Australia, Malaysia, another nation, and Japan.

Although the US and China have now reached a trade truce on rare earths, Beijing—with approximately 70% of worldwide extraction and nearly all of international refining—holds an advantage that may prove challenging to erode.

“These materials are essential for electric motors but also in defense technology that have obvious applications for the military,” says a market analyst. “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 minerals essential to national security, chip manufacturing, and the shift from traditional energy to renewable sources. According to official sources, the US imported 80% of the rare earths it used in recent years.

In the case of rare-earth minerals such as dysprosium, essential for semiconductors, and samarium, essential to defense systems, Chinese refinement dominance rises to almost total. These elements are found in magnets essential for EV motors and generators in renewable energy, along with uses in mobile devices, advanced lighting, and energy plants.

Extended Timelines and Global Deposits

Efforts to reduce the US’s dependence on China's output of rare-earth minerals could take years. Analysts point out that “These minerals” is somewhat of a misnomer because they’re relatively abundant in the planet's surface, but many deposits, including those in Ukraine, where an agreement was signed recently, are only in the early stages of mining.

“It’s not that there’s a shortage per se, it’s that China can limit how much is exported,” an analyst explained, adding that securing export licenses from China can be a complex and time-consuming endeavor.

The Arctic region, a key area of American interest, and Brazil, are additional nations with substantial rare-earth resources. Domestically, there are deposits in California, Wyoming, and Missouri, with the biggest active site operating at Mountain Pass, the state, not far from a major city.

Government Initiatives and Investment

In July, the Pentagon took on the role of the largest shareholder in a mining company, with plans to open a new “integrated” plant, called a new facility, to make magnets crucial for F-35 fighter jets, unmanned systems, and submarines.

Across the continent, measured and indicated resources of rare earths were estimated to include 3.6m tons in the US and more than 14m tons in Canada—far less than the vast reserves estimated to be in China.

Mirroring government funding in other sectors and US chipmakers, the interior department said it was prepared to make direct investments in critical mineral companies.

“The US is up against government-backed investment because China is selecting these as priority areas that they want to invest in,” a senior official stated during a address in April.

He floated that the US could utilize a national investment pool to accelerate production. “Why wouldn’t the wealthiest country in the world have the largest sovereign wealth fund?” he asked.

Historical Obstacles and Future Outlook

American attempts to support homegrown output have struggled in the past when Chinese producers lowered prices, making unsupported rare-earth development unprofitable against China’s lower cost of production and far-sighted planning.

In the past, an industry leader testified before a US Senate committee that “those who invest in battery capacity and supply chains today are likely to dominate this sector for generations to come. It is not too late for the US but action is needed now.”

Since then, a race to build international partnerships around rare earths is speeding up.

“In about a year from now, we’ll have an abundance of critical mineral and rare earths that you won’t know what to do with them,” a top leader informed the media. This followed in the wake of a demand for compensation in the form of natural resources from Ukraine. In September, the government of Pakistan agreed to a deal with an US firm, securing rights to minerals such as key metals.

Prospects for Success

But, can the US make up its gap and weaken Beijing's grip on rare-earth supply chains? “The US has taken major measures so far,” an analyst says. The US, he continues, is unlikely to become “independent in the near future because it takes time to bring a mine online and establish processing plants.”