TL/DR –
The US has invested over $1 billion, including a $550 million deal with MP Materials, to decrease China’s over 90% control over rare earth refining and magnet manufacturing, but it is still falling short due to six critical gaps. These include allied supply coordination, centralized leadership, market price stabilization, downstream demand creation, workforce development, and serious equity capital. Unless these gaps are addressed with NATO-style mineral partnerships and unified command, the US risk remaining dangerously dependent on Chinese supply chains, as mines can take a decade to develop, processing plants can take five years, and China is tightening export controls.
The Fight for Rare Earth Independence: A Struggle for the US
As the United States grapples with its dependence on China for the supply of rare earth minerals, the country’s efforts to establish self-sufficiency seem to be falling short. Despite federal investments exceeding $1 billion, including a substantial $550 million deal between the Pentagon and MP Materials, the US still lacks a comprehensive industrial policy to counter China’s dominating control over rare earth refining and magnet manufacturing.
The severity of the situation is emphasized by the fact that rare earths are integral components of fighter jets, precision-guided munitions, EV motors, wind turbines, satellites, and data centers. A lack of access to these elements could disrupt entire industrial and defense sectors.
The US Effort: Not Enough?
The US government seems to have recognised the severity of the situation, with actions taken in recent years indicating a push towards self-reliance. The Department of Defense made a significant move in 2025 when it struck a deal with MP Materials, the owner of America’s only operating rare earth mine. This marked a substantial shift towards industrial policy, but unfortunately, it still falls short of complete independence.
Additional efforts include the Office of Strategic Capital within the Department of Defense committing about $700 million in loans to magnet manufacturers, along with the Department of Energy funding pilot processing projects. However, these steps, while crucial, are insufficient to establish rare earth independence. The efforts remain fragmented and reactive, with no single authority in charge of setting output targets, no definitive refining capacity plan, and no broad-based price stabilization strategy.
China’s Control: Unwavering
While the US is trying to ramp up its game, China’s control over the rare earth sector remains unchallenged. China doesn’t merely mine rare earths—it has a stranglehold on the essential checkpoints. Approximately 90%+ of global refining and almost all magnet manufacturing fall within China’s territory or under its influence. This strategic positioning, built over decades through state coordination, price manipulation, technology accumulation, and industrial clustering, puts China in a commanding position.
Six Essential Elements
Rare Earth Exchanges™ believes the US lacks an ‘industrial soul’ in its critical mineral strategy. To close the gap, the US needs a six-fold approach. This includes setting up NATO-style alliances for mineral coordination with trusted partners, establishing a single command center, implementing a price stabilization system, creating downstream demand, developing workforce competence, and mobilizing serious capital investments.
Freedom or Fiction: The Five-Year Time Frame
The timeline for achieving rare earth independence is daunting. It takes a decade to develop heavy rare earth mines, five years to set up separation plants, and several more years to establish magnet factories. All this while, China is tightening export controls, not relaxing them.
Without a well-coordinated industrial policy, the US seems set to remain dependent on Chinese processing and magnets, leaving defense systems, clean energy, and advanced manufacturing exposed. A start has been made, but achieving rare earth independence requires more than just investment—it requires discipline, coordination, and political will to act decisively.
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