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Last week, the US Treasury Secretary returned from a southern state displaying a small piece of metal, declaring it was the first rare-earth magnet manufactured in the US in decades.

He remarked that this was a sign the US is breaking “China’s chokehold on our industrial pipeline.” Thanks to a new rare-earth mineral processing center in South Carolina, the official continued, “We’re finally becoming independent again.”

Countering China’s Dominance in Critical Materials

Ending Beijing's refining and production supremacy in these materials, which are essential for advanced electronics, batteries, and military equipment, is a top priority for the American leadership. Using economic tools and other strategies, the US is betting on returning the industry home to domestic facilities.

Such measures prompted Beijing to limit rare-earth shipments to the US and pushed the administration to forge agreements with an ally, a partner, another nation, and a key Asian economy.

While the US and China have now brokered a temporary agreement on rare earths, Beijing—with approximately 70% of global mining and over 90% of international refining—has a head start that will be difficult to diminish.

“Rare earths are used in electric motors but also in guidance systems that have clear uses for the defense department,” notes a market analyst. “Anything that has a strong magnet in it uses rare earths.”

Challenging Path for US Independence

There’s no easy fix for the US to reset its reliance on Chinese production of minerals essential to defense, semiconductor production, and the transition from traditional energy to wind and solar. Data from official sources, the US imported the vast majority of the rare earths it consumed in 2024.

For some rare-earth minerals such as a key element, essential for chip production, and another mineral, essential to defense systems, China's control over processing reaches almost total. Dysprosium and terbium are found in magnets crucial to EV motors and power systems in renewable energy, along with applications for mobile devices, advanced lighting, and energy plants.

Extended Timelines and Global Deposits

Initiatives to reduce the US’s reliance on China's output of rare-earth minerals could take years. Experts note that “These minerals” is somewhat of a misnomer because they’re relatively abundant in the earth’s crust, but many deposits, such as those in Eastern Europe, where an agreement was signed recently, are only in the early stages of extraction.

“It’s not that there’s a shortage itself, it’s that Beijing can limit how much is sent abroad,” a specialist said, noting that securing permits from China can be a lengthy, difficult process.

Greenland, another focus of US attention, and Brazil, are two other countries with significant rare-earth deposits. In the continental US, there are reserves in the West, the Midwest, 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 US Department of Defense became the largest shareholder in an industry operator, with plans to open a new “mine-to-magnet” plant, called 10X, to make magnets crucial for military aircraft, drones, and naval vessels.

In North America, estimated reserves of rare earths were calculated at 3.6m tons in the US and additional millions in the northern neighbor—far less than the vast reserves believed to be in China.

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

“The US is up against government-backed investment because Beijing is selecting these strategically that they want to invest in,” a cabinet member said during a address this spring.

The official suggested that the US could use a national investment pool to accelerate production. “How could the wealthiest country in the world not possess the biggest state investment fund?” he asked.

Historical Obstacles and Prospects

American attempts to promote domestic production have struggled in the past when Chinese producers cut costs, making unsubsidized rare-earth development uneconomic against Asia's competitive pricing and far-sighted planning.

Five years ago, an industry leader testified before a congressional panel that “those who invest in energy storage 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.”

Five years on, a race to build international partnerships around rare earths is speeding up.

“In about a year from now, we’ll have an abundance of essential resources that you won’t know what to do with them,” a top leader informed reporters. This followed in the wake of a demand for payment in the form of natural resources from another country. In September, the authorities in Asia signed a deal with an American company, giving it access to minerals such as antimony and copper.

Can the US Succeed?

However, 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 adds, is unlikely to become “independent in the short term because it requires years to bring a mine online and build refining capacity.”