Not long ago, a top US official came back from a southern state brandishing a tiny sample of metal, announcing it was the initial rare-earth magnet manufactured in the US in decades.
He remarked that this was proof the US is breaking “Beijing's grip on our industrial pipeline.” Thanks to a recently opened rare-earth mineral refining facility in the state, he added, “America is reclaiming its self-sufficiency.”
Challenging Beijing's Control in Essential Minerals
Ending China’s refining and production supremacy in these minerals, which are essential for some semiconductors, energy storage, and armaments, is a major focus for the federal government. Through trade measures and other approaches, the US is relying on returning the industry back to US soil.
These measures prompted China to limit rare-earth shipments to the US and pushed US leaders to forge agreements with Australia, Malaysia, Cambodia, and a key Asian economy.
Although the US and China have now brokered a trade truce on rare earths, China—with around 70% of global mining and over 90% of global processing capacity—has a head start that will be difficult to overcome.
“These materials are essential for EV engines but also in guidance systems 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 US Independence
It won't be simple for the US to reduce its dependence on Chinese production of materials critical to defense, chip manufacturing, and the shift 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.
In the case of rare-earth minerals such as a key element, essential for chip production, and samarium, essential to defense systems, China's control over processing rises to almost total. Dysprosium and terbium are used in magnets essential for electric engines and power systems in renewable energy, along with applications for cellphones, high-intensity lighting, and energy plants.
Long-Term Efforts and International Resources
Initiatives to reduce the US’s dependence 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 relatively abundant in the planet's surface, but many deposits, such as those in Ukraine, where a deal 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,” a specialist said, noting that obtaining export licenses from China can be a complex and time-consuming endeavor.
Greenland, another focus of American interest, and Brazil, are additional nations with substantial rare-earth deposits. Domestically, there are deposits in the West, Wyoming, and Missouri, with the largest operational mine located at Mountain Pass, California, not far from a major city.
Federal Efforts 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, named 10X, to produce magnets crucial for F-35 fighter jets, unmanned systems, and naval vessels.
In North America, measured and indicated resources of rare earths were calculated at 3.6m tons in the US and additional millions in Canada—far less than the 44m tons believed to be in China.
Following government funding in the steel industry and US chipmakers, the interior department said it was ready to make targeted funding in critical mineral companies.
“The US is up against government-backed investment because Beijing is picking these as priority areas that they want to invest in,” a senior official stated during a address in April.
The official floated that the US could utilize a sovereign wealth fund to speed production. “How could the richest nation in the world have the largest sovereign wealth fund?” he asked.
Past Challenges and Future Outlook
US efforts to promote domestic production have struggled in the past when Chinese producers cut costs, rendering unsupported rare-earth development unprofitable against China’s lower cost of production and far-sighted planning.
In the past, an industry leader testified before a congressional panel that “nations that fund in battery capacity and industrial networks today are likely to lead this industry for generations to come. There is still time for the US but immediate steps are required.”
Since then, a scramble to assemble trading alliances around rare earths is speeding up.
“In about a year from now, we’ll have an abundance of critical mineral and rare earths that supply will exceed demand,” the President told reporters. This followed in the wake of a demand for payment in the form of natural resources from Ukraine. In September, the government of Pakistan signed a deal 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 loosen China’s hold on rare-earth global networks? “America has implemented really significant steps already,” an analyst comments. The US, he adds, cannot be “independent in the near future because it takes time to bring a mine online and establish processing plants.”
