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Recently, the US Treasury Secretary returned from a southern state displaying a tiny sample of metal, announcing it was the first rare-earth magnet manufactured in the US in decades.

He remarked that this was a sign the US is overcoming “China's dominance on our industrial pipeline.” Because of a recently opened rare-earth mineral processing center in South Carolina, he added, “We’re finally becoming independent again.”

Challenging China’s Dominance in Essential Minerals

Overthrowing China’s refining and production supremacy in these materials, which are vital for advanced electronics, batteries, and military equipment, is a key goal for the federal government. Via economic tools and other strategies, the US is betting on bringing the industry home to American shores.

These measures prompted China to restrict rare-earth exports to the US and pushed the administration to sign deals with an ally, a partner, Cambodia, and a key Asian economy.

Although the US and China have since reached a trade truce on rare earths, Beijing—with around 70% of global mining and over 90% of global processing capacity—holds an advantage that will be difficult to diminish.

“Rare earths are used in EV engines but also in guidance systems that have clear uses for the military,” says an industry expert. “Any device that has a strong magnet in it uses rare earths.”

Challenging Path for US Independence

It won't be simple for the US to reduce its reliance on Chinese production of materials critical to national security, semiconductor production, and the shift from fossil fuels to renewable sources. Data from federal reports, the US imported the vast majority of the rare earths it consumed in 2024.

In the case of rare-earth minerals such as dysprosium, essential for semiconductors, and another mineral, essential to military applications, Chinese refinement dominance reaches 99%. Dysprosium and terbium 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 Global Deposits

Initiatives to reduce the US’s dependence 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 not that uncommon in the planet's surface, but many deposits, such as those in Eastern Europe, where an agreement was made earlier this year, are only in the initial phases of mining.

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

The Arctic region, another focus of US attention, and Brazil, are additional nations with significant rare-earth resources. In the continental US, there are reserves in California, the Midwest, and the central US, with the biggest active site located at a key location, California, about 60 miles from a major city.

Federal Efforts and Investment

In July, the Pentagon took on the role of the major investor in an industry operator, with plans to open a new “integrated” plant, called a new facility, to produce magnets crucial for F-35 fighter jets, drones, and naval vessels.

Across the continent, estimated reserves of rare earths were calculated at 3.6m tons in the US and additional millions in Canada—far less than the vast reserves believed to be in the Asian giant.

Mirroring government funding in the steel industry and domestic technology firms, the interior department said it was ready 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 said during a speech this spring.

The official suggested that the US could use a national investment pool to speed production. “How could the richest nation in the world not possess the largest sovereign wealth fund?” he questioned.

Past Challenges and Future Outlook

US efforts to promote domestic production have floundered 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.

Five years ago, a market expert stated before a congressional panel that “nations that fund in energy storage and industrial networks now are poised to lead this sector for generations to come. It is not too late for the US but immediate steps are required.”

Five years on, a scramble to assemble trading alliances around rare earths is speeding up.

“Soon, we’ll have so much critical mineral and rare earths that supply will exceed demand,” a top leader told the media. That came eight months after a demand for compensation in the form of minerals from Ukraine. In September, the government of Pakistan signed a deal with an US firm, giving it access to minerals such as key metals.

Prospects for Success

However, can the US make up its gap and weaken Beijing's grip on rare-earth global networks? “The US has taken major measures so far,” a specialist 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.”