US rare earth dependence leaves processing leverage with China

The United States remains heavily reliant on China for rare earth processing, a vulnerability highlighted by export controls that can disrupt supplies to industry and defence. An Ars Technica article, republished from The Conversation, traces that dependence to decades of lower-cost Chinese production and the decline of US capacity.

The article says Mountain Pass in California led global rare earth production until the late 1980s. Its separation plant closed in 1998 and its mine in 2002; mining resumed in 2017. Yet the US still imported more than two-thirds of the rare earth elements it used in 2025.

For 2024, the article estimates China mined about 60 per cent of the rare earths used in magnets and handled about 91 per cent of separation and refining. Rare earths are used in consumer products and military equipment, but rebuilding a domestic supply chain faces high costs, a shortage of experienced engineers, technical barriers and environmental concerns.

The US has committed more than $7 billion since April 2025 to rebuild production capacity, according to the article. That includes a Pentagon investment in MP Materials and planned Commerce Department support for USA Rare Earth. The companies are among the US efforts to develop a mine-to-magnet supply chain.

China’s export controls remain a source of uncertainty. The article says many controls introduced in 2025 were suspended until 10 November 2026, while some restrictions remain in force. On 22 June 2026, China added 10 US companies, including MP Materials and USA Rare Earth, to its export control list.

The article’s author argues that rebuilding domestic capacity would reduce US exposure to Chinese restrictions, but would take time and require substantial investment. Supply chains involving allies such as Australia or Japan could also reduce the risk of a unilateral cut-off, though the article says Chinese rules can reach technology used abroad.