The race to reduce America's reliance on Chinese rare earths is on, and it's a complex and crucial battle. Imagine a world where the very materials that power our modern lives, from electric cars to military technology, are controlled by a single nation. That's the reality the US is striving to change.
Last week, US Treasury Secretary Scott Bessent returned from South Carolina with a powerful symbol: a rare-earth magnet, the first made in the US in 25 years. It's a sign that America is fighting back against China's dominance in rare earths, which are essential for semiconductors, batteries, and armaments.
But here's where it gets controversial: China currently holds a massive advantage. With approximately 70% of global mining and over 90% of global processing capacity, China has a head start that President Trump will find challenging to overcome.
The US imported a staggering 80% of its rare earths in 2024, according to the US Geological Survey. For some minerals like dysprosium and samarium, China's refinement dominance reaches a staggering 99%. These materials are crucial for chip production, military applications, and the transition to renewable energy sources.
"These materials are used in electric motors for EV cars and guidance systems for the defense department," explains Adam Webb, head of energy raw materials at Benchmark Mineral Intelligence.
Trump's efforts to reduce US dependence on Chinese rare earths are a long-term battle. While 'rare earths' may be a misnomer, as they're not that uncommon, many deposits are in the early stages of extraction, and China can limit exports.
Greenland, Brazil, and even Ukraine have significant rare-earth deposits, but China's strategic investments and control over export licenses make it a formidable opponent.
The US is taking action, with the Pentagon becoming the largest shareholder in MP Materials, the operator of a rare-earth mine in California. The department plans to open a 'mine-to-magnet' plant to produce magnets crucial for military equipment.
However, the US faces an uphill battle. Direct investments and stakes in the steel industry and US chipmaker Intel mirror the challenges ahead.
"You're competing against state capital," warns Doug Burgum, US Secretary of the Interior. "China strategically invests in these areas."
The US is considering utilizing a sovereign wealth fund to speed up production, but can it catch up to China's head start?
Five years ago, Simon Moores of Benchmark Mineral Intelligence testified before the US Senate, urging action. Today, the scramble for rare earths alliances is intensifying.
Trump's ambitious goal of having "so much critical mineral and rare earths that you won't know what to do with them" in a year seems optimistic. But the US is taking significant steps, and the race to secure these vital resources is far from over.
Can the US break free from China's grip on rare earths? The future of our technological and military advancements may depend on it. What do you think? Is the US on the right track, or is there a better strategy to achieve independence from Chinese rare earths?
