US may take over a decade to break free from Chinese rare earth dependency, with critical mineral supply gaps hard to bridge

Despite the United States investing billions of dollars and making a series of political commitments, analysts and a recent Bloomberg report indicate that the U.S. will need at least a decade to eliminate its dependence on China in the most critical area of rare earth minerals, a persistent strategic vulnerability that is profoundly affecting the defense and clean energy supply chains of the United States.

Forecasts from McKinsey & Company, CRU Group, and Benchmark Mineral Intelligence suggest that by 2035, producers outside of China will supply less than 20% of the global demand for dysprosium and terbium. These two heavy rare earths are the core materials for high-performance permanent magnets, widely used in F-35 fighter jets, submarine propulsion systems, electric vehicle motors, and wind turbines, among others.

Cory Combs, Deputy Director of Supply Chain Research at Trivium China, stated bluntly: "China's influence is more enduring than that of the United States at this stage." He predicts that China will continue to dominate the heavy rare earth sector at least until the mid-2030s.

The production of rare earths involves several stages including mining, separation of oxides, and the manufacturing of metals and magnets. China controls almost every key node in this supply chain. The production of ultra-high-purity heavy rare earth materials may require more than 1000 chemical separation processes, and any slight errors could impact the final performance of the magnets. On this matter, Cameron Johnson, Senior Partner at TidalWave Consulting in Shanghai, said: "Diversifying the supply chain would take at least 10 to 20 years and cost tens, if not hundreds, of billions of dollars—and where will the talent come from? Who knows how to process these materials?"

The U.S. Pentagon has provided financial support to Lynas Rare Earths, an Australian rare earth company, which is currently the only commercial heavy rare earth refiner outside China. However, its production remains limited. In the first quarter of 2026, the company's combined production of dysprosium and terbium was only 8 tons, whereas the annual global demand is measured in thousands of tons. New projects in the U.S., Australia, and Brazil are in various stages of development, but analysts estimate that significant supply gaps will still exist in the mining, refining, and magnet manufacturing sectors by 2035.

Compared to the technical heritage accumulated by generations in China, the U.S. has an extremely scarce pool of professionals with practical experience in rare earth separation chemistry, a structural shortcoming that is not easily overcome in the short term. The progress made by various parties is not sufficient to talk about ending China's dominant position, and China will maintain its core status in the supply chain for a considerable period of time.

In the light rare earth sector, such as neodymium and praseodymium, the U.S. may make faster progress; but in the heavy rare earth sector, where defense and energy applications have the most stringent requirements, technical and economic challenges remain formidable. China's lower production costs have historically made it difficult for non-Chinese competitors to keep pace—multiple rounds of price cycles in the past have stifled several Western projects before they could scale up.

Political scientist Henry Farrell from the Johns Hopkins School of Advanced International Studies warns that the U.S. must face the reality that its adversaries have the capability to threaten multiple important strategic areas of its economy. As Beijing imposes export restrictions on certain categories of minerals, the rare earth supply chain has become a new focus in the U.S.-China trade game, further increasing the urgency for Washington to diversify its supply chain. Despite repeated warnings from analysts, political timetables often do not match industrial realities.