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

He indicated that this was proof the US is overcoming “China's dominance on our industrial pipeline.” Thanks to a recently opened rare-earth mineral processing center in the state, he noted, “We’re finally becoming independent again.”

Breaking Beijing's Control in Essential Minerals

Ending China’s processing and manufacturing dominance in these minerals, which are crucial for some semiconductors, energy storage, and armaments, is a top priority for the federal government. Through trade measures 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 pushed the administration to sign deals with an ally, a partner, Cambodia, and Japan.

While the US and China have now brokered a temporary agreement on rare earths, China—with approximately the majority of global mining and over 90% of international refining—has a head start that may prove challenging to overcome.

“Rare earths are essential for EV engines but also in defense technology that have clear uses for the defense department,” notes a market analyst. “Anything that has a decent magnet in it requires rare earths.”

Challenging Path for US Independence

There’s no easy fix for the US to reset its reliance on Chinese production of materials critical to defense, chip manufacturing, and the shift from traditional energy to wind and solar. According to official sources, the US brought in the vast majority of the rare earths it consumed in 2024.

For some rare-earth minerals such as dysprosium, used in semiconductors, and another mineral, critical for military applications, Chinese refinement dominance rises to 99%. Dysprosium and terbium are used in magnets crucial to EV motors and power systems in renewable energy, along with uses in cellphones, advanced lighting, and energy plants.

Extended Timelines and International Resources

Efforts to cut the US’s reliance on China's output of rare-earth minerals may require a long time. Analysts point out that “These minerals” is not entirely accurate because they’re not that uncommon in the planet's surface, but many reserves, such as those in Eastern Europe, where a deal was made earlier this year, are only in the early stages of mining.

“It’s not that there’s a shortage per se, it’s that China can control how much is exported,” an analyst explained, adding that obtaining export licenses from China can be a lengthy, difficult process.

Greenland, a key area of US attention, and South America, are two other countries with significant rare-earth resources. Domestically, there are deposits in California, Wyoming, and Missouri, with the largest operational mine operating at a key location, California, not far from Las Vegas.

Federal Efforts and Funding

In July, the Pentagon took on the role of the major investor in a mining company, with plans to open a new “integrated” plant, called a new facility, to produce magnets essential for military aircraft, unmanned systems, and submarines.

In North America, estimated reserves of rare earths were calculated at 3.6m tons in the US and more than 14m tons in Canada—far less than the 44m tons estimated to be in the Asian giant.

Mirroring government funding in other sectors and US chipmakers, the federal agency said it was prepared to make direct investments in critical mineral companies.

“You’re competing against government-backed investment because China is picking these strategically that they want to invest in,” a senior official said during a address in April.

He floated that the US could utilize a national investment pool to accelerate production. “How could the wealthiest country in the world have the largest sovereign wealth fund?” he questioned.

Historical Obstacles and Future Outlook

American attempts to support domestic production have floundered in the past when China lowered prices, making unsubsidized rare-earth development uneconomic 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 today are likely to lead this industry for the foreseeable future. It is not too late for the US but immediate steps are required.”

Since then, 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 the media. That came in the wake of a request for compensation in the form of minerals from another country. In September, the authorities in Asia signed a contract with an American company, securing rights to minerals such as antimony and copper.

Can the US Succeed?

But, is America able to close its shortfall and weaken China’s hold on rare-earth supply chains? “America has implemented really significant steps already,” an analyst says. The nation, he adds, is unlikely to become “self-reliant in the short term because it takes time to start operations and establish processing plants.”