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Last week, a top US official came back from South Carolina displaying a small piece of metal, announcing it was the initial rare-earth magnet produced in the US in 25 years.

He remarked that this was evidence the US is overcoming “China's dominance on our supply chain.” Due to a new rare-earth mineral manufacturing plant in South Carolina, the official continued, “America is reclaiming its self-sufficiency.”

Breaking Beijing's Control in Critical Materials

Reducing Beijing's processing and manufacturing dominance in these materials, which are essential for advanced electronics, batteries, and armaments, is a top priority for the federal government. Via economic tools and other strategies, the US is counting on returning the industry home to domestic facilities.

Such tariffs led China to restrict rare-earth shipments to the US and motivated US leaders to sign deals with Australia, a partner, another nation, and Japan.

Although the US and China have since reached a trade truce on rare earths, Beijing—with around the majority of global mining and over 90% of global processing capacity—holds an advantage that may prove challenging to overcome.

“These materials are used in EV engines but also in defense technology that have clear uses for the defense department,” says an industry expert. “Any device that has a decent magnet in it requires rare earths.”

No Easy Fix for American Self-Sufficiency

It won't be simple for the US to reset its reliance on imports from China of minerals critical to national security, chip manufacturing, and the transition from traditional energy to wind and solar. According to official sources, the US imported 80% of the rare earths it consumed in recent years.

In the case of rare-earth minerals such as a key element, essential for semiconductors, and another mineral, essential to military applications, Chinese refinement dominance reaches 99%. Dysprosium and terbium are used in magnets essential for EV motors and power systems in wind turbines, along with uses in mobile devices, high-intensity lighting, and energy plants.

Extended Timelines and International Resources

Efforts to cut the US’s reliance on China's output of rare-earth minerals may require a long time. Analysts point out that “These minerals” is somewhat of a misnomer because they’re not that uncommon in the planet's surface, but many deposits, such as those in Ukraine, where a deal was made earlier this year, are only in the initial phases of extraction.

“The issue isn't scarcity per se, it’s that China can control how much is sent abroad,” an analyst said, noting that securing permits from China can be a complex and time-consuming endeavor.

The Arctic region, a key area of US attention, and Brazil, are additional nations with substantial rare-earth resources. Domestically, there are reserves in California, the Midwest, and Missouri, with the biggest active site located at Mountain Pass, the state, not far from Las Vegas.

Government Initiatives and Investment

In July, the US Department of Defense became the major investor in an industry operator, with intentions to open a new “integrated” plant, called a new facility, to produce magnets crucial for military aircraft, drones, and naval vessels.

In North America, measured and indicated resources of rare earths were estimated to include 3.6m tons in the US and additional millions in Canada—significantly lower than the vast reserves estimated to be in China.

Mirroring direct investment in other sectors and US chipmakers, the federal agency announced it was ready to make targeted funding in strategic resource firms.

“You’re competing against state capital because Beijing is picking these strategically that they aim to control,” a senior official said during a speech in April.

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

Historical Obstacles and Future Outlook

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

Five years ago, an industry leader testified before a US Senate committee that “those who invest in energy storage and industrial networks now are likely to dominate this industry for the foreseeable future. There is still time for the US but immediate steps are required.”

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

“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 the media. That came eight months after a request for payment in the form of minerals from Ukraine. In September, the authorities in Asia agreed to a contract with an US firm, giving it access to minerals such as antimony and copper.

Prospects for Success

But, can the US make up its gap and weaken Beijing's grip on rare-earth global networks? “America has implemented major measures already,” an analyst says. The US, he continues, cannot be “self-reliant in the near future because it takes time to bring a mine online and establish processing plants.”