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Last week, the US Treasury Secretary came back from a southern state holding up a small piece of metal, declaring it was the initial rare-earth magnet made in the US in a quarter of a century.

He remarked that this was a sign the US is overcoming “Beijing's grip on our industrial pipeline.” Due to a new rare-earth mineral refining facility in the state, the official continued, “America is reclaiming its self-sufficiency.”

Breaking Beijing's Control in Essential Minerals

Reducing Beijing's refining and production supremacy in these minerals, which are crucial for advanced electronics, energy storage, and military equipment, is a key goal for the federal government. Via trade measures and other approaches, the US is counting on returning the industry home to American shores.

Such measures prompted Beijing to restrict rare-earth exports to the US and motivated the administration to forge agreements with Australia, Malaysia, another nation, and Japan.

While the US and China have since brokered a temporary agreement on rare earths, China—with approximately the majority of global mining and nearly all of global processing capacity—has a head start that may prove challenging to erode.

“Rare earths are used in electric motors but also in defense technology that have clear uses for the defense department,” notes a market analyst. “Any device that has a decent magnet in it requires rare earths.”

Challenging Path for US Independence

It won't be simple for the US to reduce its dependence on imports from China of minerals critical to national security, semiconductor production, and the shift from fossil fuels to renewable sources. According to federal reports, the US imported 80% of the rare earths it used in recent years.

In the case of rare-earth minerals such as dysprosium, used in chip production, and another mineral, essential to defense systems, Chinese refinement dominance reaches almost total. These elements are used in magnets essential for electric engines and generators in renewable energy, along with applications for cellphones, advanced lighting, and energy plants.

Long-Term Efforts and International Resources

Efforts to cut the US’s dependence on China's output of rare-earth minerals could take years. Analysts point out that “These minerals” is somewhat of a misnomer because they’re relatively abundant in the earth’s crust, but many deposits, such as those in Eastern Europe, where an agreement was signed recently, are only in the initial phases of mining.

“It’s not that there’s a shortage itself, it’s that Beijing can limit how much is sent abroad,” an analyst explained, adding that obtaining export licenses from China can be a lengthy, difficult process.

Greenland, another focus of American interest, and Brazil, are additional nations with substantial rare-earth resources. In the continental US, there are deposits in the West, the Midwest, and the central US, with the largest operational mine located at a key location, the state, not far from Las Vegas.

Government Initiatives and Investment

Recently, the US Department of Defense became the largest shareholder in an industry operator, with plans to open a new “integrated” plant, called a new facility, to make magnets crucial for military aircraft, drones, 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 44m tons believed to be in the Asian giant.

Following direct investment in the steel industry and domestic technology firms, the interior department announced it was prepared to make direct investments in strategic resource firms.

“The US is up against government-backed investment because Beijing is selecting these strategically that they want to invest in,” a cabinet member said during a speech this spring.

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

Past Challenges and Future Outlook

American attempts to promote domestic production have struggled in the past when China cut costs, making unsupported rare-earth development uneconomic against Asia's competitive pricing and far-sighted planning.

In the past, a market expert stated before a US Senate committee that “nations that fund in battery capacity and industrial networks now are poised 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 race to assemble trading alliances around rare earths is accelerating.

“In about a year from now, we’ll have so much essential resources 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 natural resources from Ukraine. More recently, the authorities in Asia signed a contract with an American company, giving it access to minerals such as key metals.

Prospects for Success

However, can the US make up its shortfall and weaken China’s hold on rare-earth global networks? “The US has taken really significant steps so far,” a specialist says. The nation, he adds, is unlikely to become “self-reliant in the near future because it requires years to bring a mine online and establish processing plants.”