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Recently, the US Treasury Secretary returned from South Carolina brandishing a tiny sample of metal, announcing it was the initial rare-earth magnet produced in the US in decades.

The official stated that this was a sign the US is overcoming “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 China’s Dominance in Essential Minerals

Overthrowing Beijing's processing and manufacturing dominance in these materials, which are vital for advanced electronics, energy storage, and military equipment, is a major focus for the current US administration. Via economic tools and other approaches, the US is betting on returning the industry home to US soil.

These measures prompted China to restrict rare-earth shipments to the US and motivated the administration to sign deals with Australia, Malaysia, another nation, and a key Asian economy.

Although the US and China have since brokered a trade truce on rare earths, Beijing—with approximately 70% of global mining and nearly all of global processing capacity—has a head start that may prove challenging to overcome.

“Rare earths are essential for electric motors but also in guidance systems that have obvious applications for the defense department,” notes a market analyst. “Any device that has a strong magnet in it requires rare earths.”

No Easy Fix for US Independence

There’s no easy fix for the US to reset its reliance on imports from China of minerals critical to defense, semiconductor production, and the transition from fossil fuels to wind and solar. Data from federal reports, the US imported the vast majority of the rare earths it consumed in recent years.

In the case of rare-earth minerals such as dysprosium, used in semiconductors, and another mineral, essential to defense systems, Chinese refinement dominance rises to almost total. Dysprosium and terbium are found in magnets crucial to electric engines and generators in wind turbines, along with uses in mobile devices, advanced lighting, and nuclear reactors.

Long-Term Efforts and Global Deposits

Initiatives to cut the US’s dependence on China's output of rare-earth minerals may require a long time. Experts note that “Rare earths” is somewhat of a misnomer because they’re not that uncommon in the planet's surface, but many deposits, including those in Eastern Europe, where a deal was made earlier this year, are only in the initial phases of mining.

“It’s not that there’s a shortage itself, it’s that China can control how much is exported,” an analyst said, adding that securing export licenses from China can be a complex and time-consuming endeavor.

The Arctic region, another focus of American interest, and Brazil, are additional nations with substantial rare-earth resources. In the continental US, there are reserves in California, Wyoming, and Missouri, with the biggest active site located at a key location, California, not far from a major city.

Federal Efforts and Funding

Recently, the US Department of Defense took on the role of the largest shareholder in a mining company, with plans to open a new “integrated” plant, called a new facility, to produce magnets crucial for military aircraft, unmanned systems, and naval vessels.

In North America, estimated reserves of rare earths were estimated to include millions of tons in the US and additional millions in the northern neighbor—significantly lower than the 44m tons believed to be in the Asian giant.

Mirroring government funding in the steel industry and domestic technology firms, the interior department said it was ready to make direct investments in strategic resource firms.

“You’re competing against state capital because China is picking these as priority areas that they want to invest in,” a cabinet member stated during a address this spring.

The official floated that the US could use a national investment pool to speed production. “Why wouldn’t the richest nation in the world have the biggest state investment fund?” he asked.

Past Challenges and Prospects

American attempts to support domestic production have struggled in the past when China lowered prices, rendering unsupported rare-earth development unprofitable against Asia's competitive pricing and far-sighted planning.

Five years ago, an industry leader testified before a US Senate committee that “those who invest 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 race to assemble trading alliances around rare earths is speeding up.

“In about a year from now, we’ll have so much critical mineral and rare earths that supply will exceed demand,” a top leader informed the media. That came eight months after a request for compensation in the form of minerals from Ukraine. More recently, the authorities in Asia signed a contract with an American company, giving it access to minerals such as antimony and copper.

Prospects for Success

However, is America able to close its shortfall and loosen Beijing's grip on rare-earth supply chains? “America has implemented major measures already,” a specialist comments. The US, he adds, cannot be “independent in the short term because it requires years to start operations and build refining capacity.”