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Last week, a top US official returned from South Carolina holding up a small piece of metal, declaring it was the initial rare-earth magnet made in the US in decades.

The official stated that this was a sign the US is ending “Beijing's grip on our supply chain.” Thanks to a new rare-earth mineral manufacturing plant in South Carolina, he noted, “America is reclaiming its self-sufficiency.”

Challenging China’s Dominance in Essential Minerals

Overthrowing Beijing's processing and manufacturing dominance in these materials, which are vital for some semiconductors, batteries, and military equipment, is a key goal for the American leadership. Via economic tools and other strategies, the US is relying on returning the industry home to American shores.

Such tariffs led China to restrict rare-earth exports to the US and pushed US leaders to forge agreements with Australia, a partner, another nation, and Japan.

While the US and China have now brokered a temporary agreement on rare earths, Beijing—with around the majority of worldwide extraction and nearly all of global processing capacity—has a head start that will be difficult to diminish.

“Rare earths are essential for electric motors but also in guidance systems that have clear uses for the military,” notes an industry expert. “Any device that has a decent magnet in it requires rare earths.”

No Easy Fix for American Self-Sufficiency

There’s no easy fix for the US to reset its reliance on Chinese production of minerals essential to defense, semiconductor production, and the transition from fossil fuels to wind and solar. According to federal reports, the US brought in 80% of the rare earths it used in recent years.

For some rare-earth minerals such as a key element, used in semiconductors, and samarium, critical for military applications, Chinese refinement dominance reaches 99%. These elements are found in magnets crucial to electric engines and generators in wind turbines, along with uses in mobile devices, advanced lighting, and energy plants.

Long-Term Efforts and Global Deposits

Efforts to cut the US’s dependence on Chinese production of rare-earth minerals may require a long time. Experts note that “These minerals” is not entirely accurate because they’re not that uncommon in the planet's surface, but many deposits, such as those in Eastern Europe, where an agreement was signed recently, are only in the initial phases of extraction.

“The issue isn't scarcity itself, it’s that Beijing can limit how much is exported,” a specialist said, noting that obtaining permits 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 deposits in California, Wyoming, and the central US, with the biggest active site operating at a key location, the state, about 60 miles from a major city.

Federal Efforts and Funding

In July, the US Department of Defense became the largest shareholder in a mining company, with intentions to open a new “mine-to-magnet” plant, called a new facility, to make magnets crucial for F-35 fighter jets, unmanned systems, and naval vessels.

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

Following government funding in other sectors and US chipmakers, the federal agency announced it was prepared to make targeted funding in critical mineral companies.

“The US is up against state capital because China is picking these strategically that they want to invest in,” a senior official stated during a speech this spring.

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

Past Challenges and Prospects

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

Five years ago, an industry leader stated before a US Senate committee that “those who invest in battery capacity and industrial networks now are poised to dominate this industry for the foreseeable future. There is still time for the US but action is needed now.”

Since then, a scramble to assemble trading alliances around rare earths is accelerating.

“Soon, we’ll have an abundance of critical mineral and rare earths that you won’t know what to do with them,” the President informed the media. This followed eight months after a request for payment in the form of minerals from Ukraine. More recently, the government of Pakistan agreed to a contract with an American company, securing rights to minerals such as antimony and copper.

Prospects for Success

But, is America able to close its shortfall and weaken Beijing's grip on rare-earth supply chains? “The US has taken major measures so far,” an analyst comments. The US, he continues, is unlikely to become “independent in the near future because it takes time to start operations and establish processing plants.”