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Not long ago, a top US official came back from South Carolina brandishing a small piece of metal, declaring it was the initial rare-earth magnet produced in the US in 25 years.

He indicated that this was proof the US is ending “China's dominance on our industrial pipeline.” Due to a new rare-earth mineral processing center in South Carolina, the official continued, “The nation is regaining its autonomy.”

Breaking Beijing's Control in Essential Minerals

Ending China’s processing and manufacturing dominance in these minerals, which are vital for advanced electronics, energy storage, and military equipment, is a major focus for the current US administration. Via trade measures and other approaches, the US is relying on returning the industry back to domestic facilities.

These measures led China to restrict rare-earth shipments to the US and motivated the administration to sign deals with an ally, Malaysia, Cambodia, and Japan.

While the US and China have since reached a temporary agreement on rare earths, China—with approximately 70% of worldwide extraction and nearly all of international refining—holds an advantage that may prove challenging to erode.

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

No Easy Fix for US Independence

It won't be simple for the US to reduce its dependence on imports from China of materials essential to defense, chip manufacturing, and the transition from fossil fuels to renewable sources. Data from official sources, the US imported the vast majority of the rare earths it used in recent years.

For some rare-earth minerals such as dysprosium, essential for semiconductors, and another mineral, critical for military applications, China's control over processing rises to 99%. Dysprosium and terbium are found in magnets crucial to EV motors and generators in renewable energy, along with uses in cellphones, high-intensity lighting, and nuclear reactors.

Long-Term Efforts and Global Deposits

Initiatives to reduce the US’s reliance on China's output of rare-earth minerals may require a long time. Analysts point out that “Rare earths” is not entirely accurate because they’re not that uncommon in the earth’s crust, but many reserves, including those in Eastern Europe, where a deal was made earlier this year, are only in the early stages of extraction.

“It’s not that there’s a shortage per se, it’s that Beijing can control how much is sent abroad,” an analyst explained, adding that obtaining export licenses from China can be a complex and time-consuming endeavor.

The Arctic region, another focus of US attention, and Brazil, are two other countries with substantial rare-earth deposits. In the continental US, there are reserves in the West, Wyoming, and the central US, with the largest operational mine located at Mountain Pass, the state, about 60 miles from Las Vegas.

Government Initiatives and Funding

Recently, the Pentagon took on the role of the major investor in an industry operator, with intentions to open a new “mine-to-magnet” plant, named a new facility, to make magnets crucial for military aircraft, unmanned systems, and submarines.

Across the continent, estimated reserves of rare earths were estimated to include millions of tons in the US and additional millions in the northern neighbor—far less than the vast reserves estimated to be in the Asian giant.

Following government funding in other sectors and domestic technology firms, the interior department announced it was prepared to make targeted funding in strategic resource firms.

“You’re competing against state capital because China is selecting these as priority areas that they want to invest in,” a senior official said during a speech in April.

He floated that the US could use a sovereign wealth fund to accelerate production. “Why wouldn’t the wealthiest country in the world have the biggest sovereign wealth fund?” he asked.

Past Challenges and Future Outlook

US efforts to promote domestic production have floundered in the past when China lowered prices, rendering unsubsidized rare-earth development unprofitable against Asia's competitive pricing and long-term strategic outlook.

In the past, a market expert testified before a congressional panel that “nations that fund in battery capacity and industrial networks now are likely to dominate this industry for the foreseeable future. It is not too late for the US but immediate steps are required.”

Five years on, a scramble to assemble international partnerships around rare earths is accelerating.

“Soon, we’ll have so much essential resources that you won’t know what to do with them,” the President told reporters. That came in the wake of a demand for compensation in the form of natural resources from another country. More recently, the authorities in Asia agreed to a deal with an US firm, securing rights to minerals such as key metals.

Prospects for Success

But, can the US make up its gap and loosen Beijing's grip on rare-earth global networks? “America has implemented really significant steps so far,” an analyst says. The US, he continues, cannot be “self-reliant in the short term because it requires years to bring a mine online and establish processing plants.”