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Not long ago, the US Treasury Secretary came back from a southern state brandishing a small piece of metal, announcing it was the initial rare-earth magnet made in the US in decades.

He remarked that this was proof the US is breaking “China’s chokehold on our industrial pipeline.” Due to a new rare-earth mineral refining facility in the state, he noted, “The nation is regaining its autonomy.”

Breaking Beijing's Control in Critical Materials

Reducing Beijing's processing and manufacturing dominance in these materials, which are vital for some semiconductors, energy storage, and armaments, is a top priority for the current US administration. Through trade measures and other approaches, the US is counting on returning the industry back to American shores.

Such measures prompted China to restrict rare-earth shipments to the US and motivated the administration to sign deals with Australia, a partner, another nation, and Japan.

While the US and China have since brokered a trade truce on rare earths, China—with around 70% of worldwide extraction and nearly all of international refining—holds an advantage that may prove challenging to overcome.

“These materials are used in electric motors but also in defense technology that have obvious applications for the defense department,” says an industry expert. “Anything that has a decent magnet in it uses rare earths.”

No Easy Fix for American Self-Sufficiency

There’s no easy fix for the US to reduce its dependence on imports from China of minerals critical to defense, semiconductor production, and the transition from traditional energy to wind and solar. According to federal reports, the US imported 80% of the rare earths it consumed in recent years.

For some rare-earth minerals such as dysprosium, essential for semiconductors, and another mineral, critical for military applications, Chinese refinement dominance rises to 99%. These elements are found in magnets essential for electric engines and generators in renewable energy, along with applications for mobile devices, advanced lighting, and energy plants.

Extended Timelines 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 planet's surface, but many reserves, such as those in Eastern Europe, where an agreement was signed recently, are only in the early stages of mining.

“The issue isn't scarcity itself, it’s that China can limit how much is exported,” a specialist explained, adding that obtaining permits from China can be a complex and time-consuming endeavor.

The Arctic region, a key area of American interest, and South America, are additional nations with substantial rare-earth deposits. In the continental US, there are deposits in California, the Midwest, and Missouri, with the biggest active site operating at a key location, California, not far from Las Vegas.

Government Initiatives and Funding

Recently, the Pentagon took on the role of the major investor in a mining company, with plans to open a new “mine-to-magnet” plant, named a new facility, to make magnets crucial for F-35 fighter jets, unmanned systems, and naval vessels.

Across the continent, measured and indicated resources of rare earths were estimated to include 3.6m tons in the US and more than 14m tons in Canada—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 said it was prepared to make targeted funding in critical mineral companies.

“You’re competing against government-backed investment because Beijing is selecting these strategically that they aim to control,” a senior official stated during a speech in April.

The official suggested that the US could use a national investment pool to speed production. “How could the richest nation in the world not possess the biggest sovereign wealth fund?” he questioned.

Past Challenges and Future Outlook

US efforts to promote domestic production have floundered in the past when Chinese producers lowered prices, rendering unsupported rare-earth development unprofitable against China’s lower cost of production and long-term strategic outlook.

In the past, an industry leader testified before a congressional panel that “those who invest in battery capacity and industrial networks today are likely to dominate this sector for the foreseeable future. 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 speeding up.

“Soon, we’ll have so much critical mineral and rare earths that you won’t know what to do with them,” a top leader informed reporters. This followed in the wake of a request for payment in the form of minerals from another country. More recently, the government of Pakistan signed a deal with an American company, giving it access to minerals such as key metals.

Prospects for Success

However, is America able to close its gap and weaken Beijing's grip on rare-earth global networks? “The US has taken really significant steps so far,” a specialist says. The US, he continues, cannot be “independent in the short term because it takes time to bring a mine online and establish processing plants.”