🔗 Share this article

Last week, the US Treasury Secretary came back from a southern state displaying a small piece of metal, announcing it was the first rare-earth magnet made in the US in decades.

The official stated that this was a sign the US is overcoming “China's dominance on our industrial pipeline.” Due to a recently opened rare-earth mineral processing center in the state, the official continued, “The nation is regaining its autonomy.”

Breaking Beijing's Control in Essential Minerals

Ending China’s refining and production supremacy in these minerals, which are essential for some semiconductors, batteries, and military equipment, is a major focus for the current US administration. Via economic tools and other approaches, the US is relying on bringing the industry home to US soil.

Such measures prompted China to limit rare-earth exports to the US and motivated the administration to forge agreements with Australia, Malaysia, another nation, and a key Asian economy.

While the US and China have now reached a trade truce on rare earths, Beijing—with around 70% of global mining and over 90% of global processing capacity—has a head start that may prove challenging to erode.

“Rare earths are essential for electric motors but also in guidance systems that have obvious applications for the military,” notes an industry expert. “Anything that has a decent magnet in it uses rare earths.”

No Easy Fix for American Self-Sufficiency

There’s no easy fix for the US to reset its dependence on Chinese production of materials essential to national security, semiconductor production, and the shift from traditional energy to renewable sources. According to official sources, the US imported 80% of the rare earths it used in 2024.

In the case of rare-earth minerals such as a key element, essential for chip production, and another mineral, critical for military applications, China's control over processing reaches almost total. These elements are used in magnets crucial to EV motors and generators in renewable energy, along with applications for mobile devices, advanced lighting, and nuclear reactors.

Extended Timelines and Global Deposits

Initiatives to reduce the US’s reliance on China's output of rare-earth minerals may require a long time. Experts note that “These minerals” is somewhat of a misnomer because they’re relatively abundant in the earth’s crust, but many reserves, such as those in Ukraine, where an agreement was made recently, are only in the initial phases of extraction.

“The issue isn't scarcity per se, it’s that China can limit how much is sent abroad,” a specialist said, 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 South America, are additional nations with significant rare-earth resources. In the continental US, there are reserves in California, Wyoming, and Missouri, with the largest operational mine operating at a key location, the state, about 60 miles from Las Vegas.

Government Initiatives and Investment

Recently, the Pentagon became the largest shareholder in an industry operator, with intentions to open a new “mine-to-magnet” plant, named 10X, to produce magnets crucial for military aircraft, drones, and submarines.

In North America, measured and indicated resources of rare earths were calculated at millions of tons in the US and additional millions in the northern neighbor—significantly lower than the vast reserves estimated to be in China.

Following direct investment in other sectors and US chipmakers, the federal agency said it was ready to make targeted funding in critical mineral companies.

“You’re competing against government-backed investment because Beijing is picking these as priority areas that they aim to control,” a senior official stated during a speech in April.

The official suggested that the US could use a sovereign wealth fund to speed production. “How could the richest nation in the world have the largest sovereign wealth fund?” he asked.

Past Challenges and Future Outlook

US efforts to support domestic production have struggled in the past when Chinese producers lowered prices, making unsubsidized rare-earth development uneconomic 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 now are poised to lead this sector for the foreseeable future. There is still time for the US but immediate steps are required.”

Five years on, a race to build trading alliances around rare earths is speeding up.

“Soon, we’ll have so much critical mineral and rare earths that you won’t know what to do with them,” the President told the media. This followed in the wake of a demand for payment in the form of minerals from Ukraine. More recently, the authorities in Asia agreed to a deal with an American company, giving it access to minerals such as antimony and copper.

Can the US Succeed?

However, is America able to close its shortfall and weaken China’s hold on rare-earth global networks? “America has implemented really significant steps so far,” an analyst comments. The nation, he continues, cannot be “independent in the near future because it takes time to start operations and establish processing plants.”