Last week, a top US official returned from South Carolina brandishing a tiny sample of metal, proclaiming it was the first rare-earth magnet produced in the US in 25 years.
He indicated that this was proof the US is ending “Beijing's grip on our industrial pipeline.” Due to a recently opened rare-earth mineral manufacturing plant in the state, he noted, “America is reclaiming its self-sufficiency.”
Challenging Beijing's Control in Critical Materials
Ending Beijing's refining and production supremacy in these materials, which are essential for advanced electronics, batteries, and armaments, is a major focus for the current US administration. Via trade measures and other strategies, the US is counting on returning the industry back to American shores.
These tariffs prompted Beijing to restrict rare-earth shipments to the US and motivated US leaders to sign deals with an ally, Malaysia, another nation, and a key Asian economy.
Although the US and China have now reached a temporary agreement on rare earths, China—with approximately the majority of global mining and nearly all of global processing capacity—holds an advantage that may prove challenging to diminish.
“Rare earths are used in EV engines but also in guidance systems that have obvious applications for the defense department,” says a market analyst. “Any device that has a decent magnet in it uses rare earths.”
Challenging Path for US Independence
There’s no easy fix for the US to reduce its dependence on Chinese production of materials essential to defense, semiconductor production, and the transition from traditional energy to wind and solar. Data from federal reports, the US brought in the vast majority of the rare earths it used in 2024.
In the case of rare-earth minerals such as a key element, used in semiconductors, and samarium, essential to defense systems, China's control over processing rises to 99%. These elements are used in magnets essential for electric engines and generators in wind turbines, along with applications for cellphones, high-intensity lighting, and nuclear reactors.
Long-Term Efforts and International Resources
Initiatives to reduce 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 earth’s crust, but many deposits, including those in Ukraine, where a deal was made recently, are only in the initial phases of extraction.
“It’s not that there’s a shortage itself, it’s that Beijing can control how much is exported,” a specialist explained, noting that securing permits from China can be a complex and time-consuming endeavor.
The Arctic region, a key area of American interest, and Brazil, are additional nations with significant rare-earth resources. In the continental US, there are deposits in California, the Midwest, and the central US, with the largest operational mine located at Mountain Pass, the state, about 60 miles from Las Vegas.
Federal Efforts and Investment
Recently, the Pentagon became the largest shareholder in an industry operator, with plans to open a new “integrated” plant, named a new facility, to produce magnets crucial for military aircraft, drones, and submarines.
In North America, estimated reserves of rare earths were calculated at 3.6m tons in the US and additional millions in the northern neighbor—significantly lower than the vast reserves estimated to be in China.
Mirroring direct investment in other sectors and domestic technology firms, the interior department said it was prepared 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.
He suggested that the US could use a sovereign wealth fund to speed production. “Why wouldn’t the richest nation in the world have the biggest sovereign wealth fund?” he questioned.
Past Challenges and Future Outlook
US efforts to support 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.
In the past, a market expert stated before a congressional panel that “those who invest in battery capacity and supply chains today are likely to dominate this industry for generations to come. There is still time for the US but immediate steps are required.”
Five years on, a scramble to build international partnerships around rare earths is accelerating.
“Soon, we’ll have so much critical mineral and rare earths that you won’t know what to do with them,” the President informed reporters. That came eight months after a demand for payment 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 key metals.
Can the US Succeed?
However, can the US make up its shortfall and weaken Beijing's grip on rare-earth supply chains? “America has implemented major measures so far,” a specialist comments. The nation, he continues, cannot be “independent in the short term because it takes time to bring a mine online and establish processing plants.”
