🔗 Share this article

Recently, a top US official came back from a southern state displaying a small piece of metal, proclaiming it was the initial rare-earth magnet made in the US in 25 years.

He remarked that this was evidence the US is overcoming “China's dominance on our supply chain.” Because of a recently opened rare-earth mineral refining facility in the state, he noted, “The nation is regaining its autonomy.”

Countering China’s Dominance in Essential Minerals

Reducing China’s refining and production supremacy in these materials, which are vital for some semiconductors, energy storage, and armaments, is a major focus for the American leadership. Through economic tools and other strategies, the US is relying on returning the industry home to domestic facilities.

These measures led Beijing to restrict rare-earth exports to the US and pushed US leaders to sign deals with Australia, Malaysia, another nation, and a key Asian economy.

Although the US and China have since reached a trade truce on rare earths, Beijing—with around 70% of global mining and over 90% of international refining—holds an advantage that may prove challenging to diminish.

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

Challenging Path for US Independence

There’s no easy fix for the US to reset its reliance on Chinese production of materials essential to defense, semiconductor production, and the shift from traditional energy to renewable sources. According to official sources, the US imported the vast majority of the rare earths it consumed in recent years.

In the case of rare-earth minerals such as a key element, essential for semiconductors, and samarium, essential to defense systems, China's control over processing reaches 99%. Dysprosium and terbium are found in magnets crucial to EV motors and generators in renewable energy, along with applications for cellphones, high-intensity 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 reserves, including those in Eastern Europe, where an agreement 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 said, adding that securing permits from China can be a lengthy, difficult process.

Greenland, a key area of US attention, and Brazil, are additional nations with significant rare-earth resources. Domestically, there are deposits in the West, Wyoming, and Missouri, with the largest operational mine located at Mountain Pass, the state, not far from Las Vegas.

Government Initiatives and Investment

In July, the US Department of Defense became the largest shareholder in an industry operator, with intentions to open a new “mine-to-magnet” plant, called a new facility, to make magnets essential for F-35 fighter jets, drones, and naval vessels.

Across the continent, measured and indicated resources of rare earths were estimated to include millions of tons in the US and additional millions in the northern neighbor—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 announced it was ready to make targeted funding in critical mineral companies.

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

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

Past Challenges and Prospects

US efforts to support homegrown output have struggled in the past when China cut costs, rendering unsupported rare-earth development unprofitable against China’s lower cost of production and far-sighted planning.

In the past, a market expert stated before a congressional panel that “nations that fund in energy storage and supply chains now are poised to dominate this sector for generations to come. It is not too late for the US but immediate steps are required.”

Five years on, a scramble to build trading alliances 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,” the President told the media. This followed in the wake of a request for compensation in the form of minerals from Ukraine. More recently, the government of Pakistan signed a contract with an American company, securing rights to minerals such as antimony and copper.

Prospects for Success

However, can the US make up its gap and weaken China’s hold on rare-earth global networks? “America has implemented really significant steps so far,” an analyst comments. The nation, he continues, cannot be “independent in the near future because it takes time to bring a mine online and establish processing plants.”