On June 22, Beijing quietly bolted the door again. China’s Ministry of Commerce added ten U.S. companies—including the rare earth firms MP Materials and USA Rare Earth—to its export-control list. Of all targets, these two are precisely the flagship firms the U.S. has poured the most federal money into, in the name of “breaking free from dependence on China.” Watching this news, I felt that cold sensation you get in the military when a supply line is cut. You have the rifle, but the enemy holds the gunpowder for your ammunition. That is exactly the shape of America’s rare earth self-reliance right now.
Today, using that scene as a starting point, I want to examine—through my own lens—whether the U.S. is really “developing” rare earths domestically, how far it has come, where it is stuck, and how this game is likely to unfold. The bottom line first: America is definitely moving. But it hasn’t even touched its most painful vulnerability yet.
The Bolt China Locked Again — What Happened in June 2026
Let’s set the timeline straight. In October 2025, the U.S. and Chinese leaders met in Busan, and China partially “suspended” its rare earth export controls for one year. Markets breathed a sigh of relief. As recently as the May 2026 Beijing summit between Trump and Xi, expectations ran high that this truce would be extended. Then on June 22, China ended that suspension and put MP Materials, USA Rare Earth and others back on the control list. After fingering its negotiating card for a while, it took precise aim at the two companies the U.S. had nurtured most carefully.
Why is this a threat? The numbers answer. China currently holds roughly 90% of global rare earth processing (separation and refining). It also controls 80% of tungsten refining and 60% of antimony. More frightening is heavy rare earths. For heavy elements like dysprosium and terbium, China’s share of refining reaches 98–99%. The permanent magnets inside F-35 fighters, precision-guided munitions, EV motors and wind turbines all come from there. It is not about where the mine sits, but who controls the process that turns ore into “usable metal” — that is real power.
One principle the military taught me: judge capability, not intent. Even if China says “we won’t block it this time,” as long as it holds the ability to block at any moment, that is a ceasefire, not peace. June 22 reconfirmed that the ability is real.
America Was Once No. 1 — How Did It Get Here?
One thing must be noted here: America’s predicament is not some unlucky accident. In fact, back in the 1960s–80s, the supplier leading the world in rare earths was California’s Mountain Pass. It supplied the world with elements like europium, which produced the red glow in color TV picture tubes. There was clearly a time when America was No. 1.
The board flipped starting in the 1990s. China, at the national level, flooded the market with cheap, mass-produced rare earths. Deng Xiaoping’s 1992 line—”The Middle East has oil; China has rare earths”—was no idle boast. Squeezed by price competition and environmental rules, Mountain Pass halted mining in 2002, and its operator Molycorp went bankrupt in 2015. MP Materials acquired that mine in 2017 and began running it again. In other words, America’s dependence on China is the accumulated bill for decades of “outsourcing.” It’s the same in the military: rebuilding a broken supply line takes far longer than it took to cut it. That is exactly the process the U.S. is going through now.
America’s One Card — Mountain Pass and the Pentagon
So is America empty-handed? Not quite. There is the Mountain Pass mine in California. Operated by MP Materials, it is the only commercial-scale rare earth mine in the U.S. Once driven into bankruptcy by cheap Chinese competition, this mine has now become the symbol of American rare earth self-reliance.
A July 2025 announcement in particular changed the board. The Department of Defense (the Pentagon) stepped up to become MP Materials’ largest shareholder. Through roughly $400 million in equity investment and a $150 million loan, it will expand Mountain Pass, and—above all—guaranteed a price floor to buy magnet-grade rare earths (NdPr) at $110 per kg for the next ten years. This is the key point. To keep a private company from collapsing under China’s price dumping, the government effectively pledged, “Even if prices fall, I’ll buy at this price.” For a free-market country like the U.S. to move with what amounts to industrial policy—and one in which the state props up prices at that—I take this decision quite seriously.
Beyond Ore to Magnets — The ’10X’ Project
Mining ore and making magnets out of it are entirely different tasks. America’s real weakness was always the latter—magnet manufacturing. So in February 2026, MP Materials broke ground on a $1.25 billion magnet manufacturing campus in Northlake, Texas. This is the so-called ’10X’ project. The idea is to build an integrated, mine-to-refine-to-magnet supply chain inside the U.S., processing Mountain Pass ore into magnets in Texas.
If all goes to plan, it starts up in 2028 with annual magnet production capacity of 10,000 metric tons, and the Pentagon buys 100% of the magnets from this plant for ten years. Some 1,500 jobs are at stake. Add to this Australia-based Lynas, building a rare earth refining plant in Texas with DoD support (targeting 5,000 tons of NdPr a year), and USA Rare Earth joining via its Round Top mine in Texas and a magnet plant in Oklahoma. The dots are clearly being connected one by one.
- Mountain Pass: The only commercial U.S. rare earth mine. The Pentagon is the largest shareholder, with a $110/kg price guarantee.
- 10X Project: Texas magnet plant ($1.25B). Online in 2028, 10,000 t/yr, Pentagon buys 100% for 10 years.
- Allied firms: Lynas (Texas refining), USA Rare Earth (Round Top, Oklahoma magnets).
- But: the catch is that almost all of this centers on “light” rare earths.
The Real Achilles Heel Is ‘Heavy’ Rare Earths
This is the part I most want to stress. The supply chain America is building is overwhelmingly tilted toward light rare earths like neodymium and praseodymium. Mountain Pass is essentially a light rare earth mine. Yet what is truly decisive in military and high-tech fields is heavy rare earths like dysprosium and terbium—the elements that keep a magnet from losing its magnetism even at high temperatures, the “heat-resistance guarantee” of weapons-grade magnets.
And China holds 98–99% of this heavy rare earth refining. Until 2023, 99% of global heavy rare earth processing was Chinese, and analyses note that the essentially only facility capable of refining dysprosium sits in Wuxi, China. As of April 2026, the U.S. has virtually no operating source of heavy rare earths. McKinsey reckons that countries outside China will meet less than one-fifth of dysprosium and terbium demand even by 2035. Most new projects are still early-stage and routinely run later than scheduled.
As a result, the market is splitting in two. As a “dual market” emerges with separate prices inside and outside China, dysprosium and terbium prices outside China have risen as much as fivefold. It means that even if the U.S. opens mines and builds magnet plants, it may still have to import the single most important ingredient for those magnets from China—and at five times the price. That is what I meant at the outset by “you have the rifle, but the enemy holds the gunpowder.”
The Four Gates of Self-Reliance — What More Is Needed
Dissecting “rare earth self-reliance” a bit more, you can see four gates that must be passed in sequence. The first is securing ore. With Mountain Pass, the U.S. has partly cleared this gate. The second is separation and refining—chemically tricky, environmentally burdensome work that pulls apart the 17 elements that come out mixed together. Frankly, this is the highest gate, and in heavy rare earth separation in particular, the U.S. has yet to properly clear even the threshold.
The third is magnet-making: alloying and sintering the refined metal into actual magnets, the very area the 10X project targets. The fourth is recycling, the so-called urban mine: recovering magnets from scrapped EV motors and old appliances to reuse them—a promising card that can bypass China’s controls. But America’s infrastructure for collecting and dismantling spent magnets is still thin. In sum, the U.S. has poured money into gates one and three, but the very vulnerability at gate two (heavy rare earth separation) and the high-potential gate four (recycling) remain early-stage. From a logistics standpoint, separation and refining are the “heart of the supply line”—and that heart is still in someone else’s hands.
Washington’s Bigger Picture — Not Domestic Production Alone
America is not blind to this vulnerability. So it isn’t pursuing strategy through “domestic production” alone, but along three tracks. First, joint supply chains with allies. In October 2025 it signed a U.S.–Australia Critical Minerals Framework, and in February 2026 the State Department launched the Forum on Resource Geostrategic Engagement (FORGE). That same month, the first Critical Minerals Ministerial in Washington gathered 54 nations to discuss a joint response to China’s controls.
Second, strategic stockpiling. A $10 billion public-private “Project Vault” aims to build a strategic reserve of critical minerals so that, even when a supply shock hits, manufacturers have time to hold out. Third, price defense and industrial policy—the $110/kg guarantee seen above is the prime example. In military terms, it amounts to running a frontal assault (domestic production), a flanking maneuver (allies) and a fallback position (stockpiles) simultaneously: a layered defense concept where, if one axis is blocked, the others hold.
Honestly, though, these three tracks are ultimately a strategy to “buy time,” not to “remove the vulnerability.” Allies, too, have feeble heavy rare earth refining capacity, and stockpiles run dry eventually. The real game-changer is the moment a facility outside China actually refines dysprosium and terbium at commercial scale—and that is still a few years off.
Not a Fire Across the River — Implications for Korea
And this never ends as merely someone else’s story. Korea, too, imports most of its rare earth permanent magnets from China. That means China is the core supply source for the neodymium magnets in EV traction motors, home appliances, industrial robots and defense equipment. While the U.S. becomes the “direct target,” cycling on and off the list, a manufacturing powerhouse like Korea is exposed right beside it to the “indirect shock.”
The mechanism is this. If the U.S. forcibly builds an expensive non-Chinese supply chain outside China, that higher price gradually becomes the global benchmark. Then it eventually transmits into the costs of Korean manufacturers that relied on Chinese supply. Moreover, when China swings the blade of control, there is no guarantee it slices the U.S. precisely while sparing Korea. A supply chain is a net where, when one node is blocked, the shock ripples sideways. That is why I do not see this U.S.–China rare earth game as a fire across the river. Somewhere on our industry’s cost sheet, the bill for this fight is already being written.
How I See the Outlook — Light at the End, but the Vulnerability Remains
To sum up: on light rare earths and magnet manufacturing, there is a fair chance the U.S. reaches “usable self-reliance” around 2028. As long as the Pentagon props up prices and guarantees demand, MP Materials’ Texas magnet plant will run. At minimum, a picture in which the U.S. covers a substantial share of peacetime demand domestically is realistic.
But the heavy rare earth vulnerability is likely to remain a structural weakness well into the 2030s. This is not a problem money alone solves quickly. Securing ore, environmental permitting, refining-skilled labor, and above all the “cheap, mass refining” know-how China built over decades—catching up on all of this at once is hard. So I expect scenes like June 22 to repeat. Suspension in negotiating phases, control in tension phases. As long as China holds this switch, it has no reason to cut permanently. The very threat to cut is itself the card.
One thing to add from an investor’s view—this is observation, not advice—the rare earth theme is extremely sensitive to policy and geopolitics. The Pentagon’s guarantee is a powerful support for the downside, but it is also evidence that this industry struggles to stand on market logic alone. Always keep in mind that this is a market where one line of policy, one summit, can swing supply and prices. The number hidden behind the dazzling declarations of self-reliance—”heavy rare earths, 99%”—is the single line I keep staring at the longest.
Frequently Asked Questions (FAQ)
Rare earths are harder to “refine and separate” than to mine. The U.S. has the Mountain Pass mine, but lacked the capacity to turn mined ore into magnet-grade metal. In particular, China holds 98–99% of the heavy rare earth refining needed for weapons and advanced magnets, so a mine alone does not deliver self-reliance.
In July 2025 the Department of Defense became MP Materials’ largest shareholder via roughly $400 million in equity, and agreed to buy magnet-grade rare earths at $110/kg for ten years. By propping up prices so a private firm wouldn’t collapse under China’s price offensive, it is effectively closer to state-led industrial policy.
Light rare earths like neodymium and praseodymium are the main material for ordinary permanent magnets, and the area where the U.S. is pursuing self-reliance. Heavy rare earths like dysprosium and terbium keep magnets performing at high temperatures—the core for military and advanced uses. America’s real vulnerability is precisely these heavy rare earths.
Light rare earths and magnet manufacturing could reach substantial self-reliance around 2028. But heavy rare earth refining is likely to remain a structural weakness into the 2030s. McKinsey reckons countries outside China will meet less than one-fifth of heavy rare earth demand even by 2035.