Key facts
- China processes most of the world's rare earth minerals, controlling significant political leverage.
- MP Materials mines and processes rare earth minerals in California.
- China mined about 60% of the world's rare earth elements used in magnets in 2024.
- China handled about 91% of rare earth separation and refining in 2024.
- Rebuilding a domestic US supply chain, including mining and magnet manufacturing, could take 15 years.
- The US government has committed over $7 billion since April 2025 to rebuild US rare earth production capacity.
- China suspended export controls until Nov. 10, 2026, in exchange for the US pausing its "affiliates rule."
China's dominance in rare earth processing gives it significant geopolitical leverage, a situation the US is attempting to counter by rebuilding its domestic supply chain. Rare earth elements are crucial for a wide range of modern technologies, from smartphones and electric vehicles to advanced military hardware.
While the US has rare earth mineral deposits, the complex and environmentally challenging process of separating these elements from ore and refining them has largely been outsourced to China. California's Mountain Pass mine was a global leader until the late 1980s, but environmental issues and cheaper Chinese imports led to its closure in 2002. MP Materials restarted mining in 2017 amid growing concerns about supply access.
In 2024, China mined about 60% of the world's rare earth elements used in magnets and handled approximately 91% of the global separation and refining. This concentration of processing power allows China to exert considerable influence, as demonstrated by export controls introduced in 2025. These controls, which require foreign factories using Chinese-origin rare earths or technology to obtain Chinese licenses for exports, were temporarily suspended until November 10, 2026. This suspension was part of a deal where the US paused its "affiliates rule" for one year.
Rebuilding a complete domestic rare earth supply chain in the US, encompassing mining, separation, and magnet manufacturing, is a slow and costly process. Estimates suggest it could take up to 15 years. Challenges include a shortage of experienced engineers, China's proprietary industrial-scale technologies, and Beijing's ban on exporting separation technology itself. The US government has committed over $7 billion since April 2025 to bolster domestic production, including a $400 million investment in MP Materials by the Pentagon and potential funding for USA Rare Earth. MP Materials anticipates its next magnet plant will begin testing equipment in 2028.
Some Chinese export rules remain in place, including licensing for seven heavier rare earths imposed in April 2025. Automaker Ford experienced the impact of these controls when it had to idle a plant for a week in May 2025 due to a shortage of magnets, highlighting the precariousness of relying on a single source. On June 22, 2026, China also placed 10 US companies involved in drone, radar, aerospace, and military vehicle production on its export control list.