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Last week, the US Treasury Secretary returned from South Carolina holding up a tiny sample of metal, announcing it was the initial rare-earth magnet made in the US in 25 years.

He indicated that this was evidence the US is overcoming “China’s chokehold on our industrial pipeline.” Due to a recently opened rare-earth mineral processing center in South Carolina, the official continued, “America is reclaiming its self-sufficiency.”

Breaking Beijing's Control in Essential Minerals

Ending China’s refining and production supremacy in these materials, which are crucial for advanced electronics, batteries, and armaments, is a top priority for the current US administration. Using economic tools and other strategies, the US is counting on returning the industry home to US soil.

These measures led Beijing to restrict rare-earth shipments to the US and motivated the administration to forge agreements with an ally, Malaysia, another nation, and Japan.

While the US and China have now reached a temporary agreement on rare earths, China—with around the majority of worldwide extraction and over 90% of global processing capacity—holds an advantage that will be difficult to diminish.

“These materials are used in electric motors but also in defense technology that have obvious applications for the military,” says a market analyst. “Any device that has a decent magnet in it requires rare earths.”

Challenging Path for American Self-Sufficiency

It won't be simple for the US to reduce its reliance on Chinese production of minerals essential to defense, chip manufacturing, and the shift from traditional energy to renewable sources. Data from federal reports, the US brought in the vast majority of the rare earths it consumed in recent years.

For some rare-earth minerals such as dysprosium, used in chip production, and another mineral, critical for military applications, China's control over processing reaches almost total. These elements are used in magnets essential for EV motors and generators in wind turbines, along with uses in cellphones, 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 earth’s crust, but many deposits, including those in Ukraine, where an agreement was signed earlier this year, are only in the initial phases of mining.

“The issue isn't scarcity itself, it’s that Beijing can limit how much is exported,” an analyst explained, adding that obtaining export licenses from China can be a lengthy, difficult process.

Greenland, another focus of US attention, and Brazil, are additional nations with significant rare-earth resources. Domestically, there are deposits in the West, Wyoming, and the central US, with the biggest active site located at Mountain Pass, California, not far from Las Vegas.

Federal Efforts and Investment

Recently, the US Department of Defense became the major investor in an industry operator, with intentions to open a new “integrated” plant, called 10X, to make magnets essential for military aircraft, unmanned systems, and submarines.

Across the continent, measured and indicated resources of rare earths were calculated at millions of tons in the US and additional millions in Canada—far less than the 44m tons estimated to be in the Asian giant.

Following government funding in other sectors and US chipmakers, the federal agency said it was ready to make targeted funding in strategic resource firms.

“You’re competing against government-backed investment because Beijing 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 utilize a national investment pool to accelerate production. “Why wouldn’t the wealthiest country in the world have the biggest state investment fund?” he asked.

Historical Obstacles and Prospects

American attempts to promote domestic production have struggled in the past when Chinese producers lowered prices, rendering unsupported rare-earth development uneconomic 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 supply chains today are likely to dominate this industry for generations to come. It is not too late for the US but immediate steps are required.”

Five years on, a scramble to assemble trading alliances around rare earths is speeding up.

“Soon, we’ll have an abundance of essential resources that supply will exceed demand,” the President informed the media. This followed eight months after a demand for compensation in the form of minerals from another country. More recently, the government of Pakistan agreed to a contract with an American company, securing rights to minerals such as key metals.

Can the US Succeed?

However, is America able to close its shortfall and weaken Beijing's grip on rare-earth global networks? “America has implemented major measures so far,” an analyst says. The nation, he adds, is unlikely to become “independent in the short term because it takes time to bring a mine online and establish processing plants.”