Since his inauguration, Donald Trump has repeatedly argued that the United States must gain access to mineral-rich regions like Greenland and Ukraine to reduce its dependence on China, particularly for rare-earth elements.

Rare-earths—crucial for manufacturing semiconductors, fighter jets, and other advanced technologies—are central to Trump’s pitch. He contends that securing these resources would end US reliance on Beijing and strengthen its position in global trade and technology.

But there is an inconvenient truth, an elephant in the room.

Even if the US were to acquire more rare-earth minerals from Greenland or Ukraine, it would still be heavily dependent on China. According to The Wall Street Journal, the US sends nearly two-thirds of its rare-earth minerals to the Asian giant for processing.

China refines these materials into rare-earth magnets, which are then exported back to the US.

“It has little choice: China is responsible for around 85% of the world’s rare earth refining,” the WSJ report noted. Beijing’s dominance, the report added, is rooted in factors ranging from cheap labour to lax environmental regulations, and established expertise, allowing it to “beat out” the US in processing.

Then, how can Trump’s argument to get more rare-earths make sense? 

Refining versus mining

Rather than accessing more rare-earth minerals reserves in places like Ukraine and Greenland, the US, which has the second biggest rare-earth reserves after China, needs to build its own processing facilities to beat Chinese dominance in the rare-earth industry, according to experts. 

Dr Jon Hykawy, president of Stormcrow Capital Ltd, an equity research firm specialising in rare earths and disruptive innovations sectors, says that beating Chinese dominance in the production of rare-earth minerals is a far-fetched objective for the US. 

The real issue is refining. He says that instead of chasing new sources, Washington should prioritise building domestic processing capabilities.

“Mining rare earth-bearing ores is only the start of the process chain,” Dr Hykawy tells TRT World, pointing out that turning rare-earths into magnets, which could be used in electric motors, is a very complicated process and “few companies in the western world know how to do”. 

After ores are mined, rare earth-bearing minerals are separated from tailings to create a rare earth mineral concentrate. Then this concentrate would be leached using acids to create a rare earth chemical concentrate like a carbonate or oxalate. 

“That chemical concentrate is sent to a separator, a company that uses a technology like solvent extraction to separate the individual rare earths, like neodymium, from all the other rare earths in the chemical concentrate,” Hykawy explains. “This separation is hard to do because rare earths have similar chemical behaviour (but very different optical or metallurgical behaviors that make them valuable to industry).”

After separation, some rare earths are converted into pure metals.

To make magnets, iron, boron, and the appropriate rare earths must be melted together in a vacuum furnace. The molten mixture is then poured onto a spinning steel cylinder and rapidly cooled in a process called spin-casting.

“The shards of magnet alloy need to be gathered up and quickly put into sealed drums so that they don’t rust. Then, that alloy needs to be ground down into small particles under inert gas, put into moulds of the appropriate shape, and then heated and pressed to make magnet blanks,” Hykawy adds.

After the aforementioned process, these magnet blanks are then further machined into their final form before being shipped to manufacturers.

China produces 60% of the world’s rare earths but dominates processing and magnet output with an 85–90% share. Only five non-Chinese refineries are currently operational, under construction, or being revived, says Goldman Sachs.

Long way to go

Trump’s ambition to bring this entire supply chain to the US is a tall order.

“The Trump administration wants to, somehow, bring all of this capability to the US,” says Hykawy. “But the US doesn’t have much of this knowledge nor many of the attributes that make it a good destination for conducting these operations,” says the leading analyst on rare-earths processing. 

Processing rare earths requires vast amounts of labour and electricity—both areas where China has a decisive advantage due to lower costs.

“That so-called midstream piece of processing and refining of ores into chemicals and metals is really important and dominated by China. I don’t see it becoming undominated,” Morgan Bazilian, director of the Payne Institute at the Colorado School of Mines, told the WSJ.

While US companies like Mountain Pass Mine in California can both mine and process rare-earths, they are the exception, and represent “very few operations in the western world,” Hykawy says.

“There are fewer western operations that can convert rare earth oxide to rare earth metals, and given the way that this is done, it would not be easy to win the environmental permits to do so in the US,” he adds. 

China also has an advantage over environmental permits for rare-earth companies with its loose regulations. 

What can Washington do?

If the US is serious about building a rare-earth supply chain, Hykawy suggests a pragmatic approach: it needs a working plan to reach those companies, which can supposedly do the best job in each processing stage, persuading them that their processed products would be bought by Washington.

“Compile a shopping list of the materials and magnets needed by US government departments, approach the companies directly and tell them that if they were to place a factory producing their specialty product on this supply chain in the US, then their factory will receive a government order of this size,” he says.

Such guarantees would help businesses justify the high costs of establishing new facilities.

“Those companies can then approach other prospective buyers, like automotive companies, to see if there is even more demand,” Hykawy adds. “But a definitive purchase order would help any company to decide to build a new operation in the United States, especially given the relatively higher labour and energy costs.”