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

He indicated that this was a sign the US is breaking “China's dominance on our supply chain.” Because of a recently opened rare-earth mineral processing center in the state, he noted, “America is reclaiming its self-sufficiency.”

Challenging Beijing's Control in Critical Materials

Reducing Beijing's processing and manufacturing dominance in these materials, which are essential for some semiconductors, batteries, and military equipment, is a major focus for the American leadership. Through trade measures and other approaches, the US is betting on bringing the industry home to US soil.

These measures led China to restrict rare-earth exports to the US and motivated the administration to forge agreements with an ally, Malaysia, another nation, and Japan.

While the US and China have since brokered a temporary agreement on rare earths, Beijing—with approximately the majority of global mining and nearly all of international refining—has a head start that may prove challenging to diminish.

“Rare earths are used in electric motors but also in defense technology that have obvious applications for the defense department,” notes an industry expert. “Any device that has a decent magnet in it uses rare earths.”

No Easy Fix for American Self-Sufficiency

It won't be simple for the US to reset its reliance on Chinese production of minerals essential to national security, semiconductor production, and the transition from fossil fuels to renewable sources. According to official sources, the US brought in the vast majority of the rare earths it consumed in recent years.

In the case of rare-earth minerals such as dysprosium, used in chip production, and another mineral, critical for defense systems, Chinese refinement dominance rises to almost total. Dysprosium and terbium are used in magnets essential for electric engines and power systems in renewable energy, along with uses in mobile devices, advanced lighting, and nuclear reactors.

Long-Term Efforts and International Resources

Initiatives to reduce the US’s dependence on Chinese production of rare-earth minerals may require a long time. Analysts point out that “Rare earths” is somewhat of a misnomer because they’re relatively abundant in the earth’s crust, but many deposits, such as those in Ukraine, where an agreement was made recently, are only in the early stages of mining.

“It’s not that there’s a shortage itself, it’s that China can control how much is exported,” an analyst explained, adding that securing export licenses from China can be a lengthy, difficult process.

The Arctic region, another focus of US attention, and South America, are additional nations with significant rare-earth resources. In the continental US, there are deposits in the West, the Midwest, and Missouri, with the largest operational mine operating at Mountain Pass, California, about 60 miles from Las Vegas.

Federal Efforts and Investment

Recently, the US Department of Defense became the largest shareholder in an industry operator, with intentions to open a new “integrated” plant, called a new facility, to produce magnets essential for F-35 fighter jets, drones, and naval vessels.

Across the continent, estimated reserves of rare earths were estimated to include millions of tons in the US and more than 14m tons in Canada—significantly lower than the vast reserves estimated to be in the Asian giant.

Mirroring government funding 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 government-backed investment because China is picking these as priority areas that they want to invest in,” a senior official said during a address in April.

The official floated that the US could utilize a sovereign wealth fund to accelerate production. “Why wouldn’t the richest nation in the world have the largest sovereign wealth fund?” he asked.

Historical Obstacles and Prospects

US efforts to support homegrown output have struggled in the past when China cut costs, making unsubsidized rare-earth development uneconomic against Asia's competitive pricing and far-sighted planning.

Five years ago, a market expert testified before a congressional panel that “nations that fund in energy storage and supply chains today are likely to dominate this sector for generations to come. There is still time for the US but action is needed now.”

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

“Soon, we’ll have an abundance of essential resources that supply will exceed demand,” a top leader told reporters. That came in the wake of a request for compensation in the form of natural resources from another country. More recently, the government of Pakistan agreed to 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 shortfall and loosen Beijing's grip on rare-earth global networks? “The US has taken really significant steps already,” an analyst comments. The US, he continues, is unlikely to become “independent in the short term because it takes time to start operations and establish processing plants.”