President Trump’s administration has launched a concerted effort to disrupt China’s dominance in the rare-earth minerals sector, a critical industry for modern technology and defense. China currently holds a near monopoly over rare-earth production, controlling approximately 70% of mining and an astonishing 90% of refining. This monopoly gives China significant leverage over global supply chains, impacting everything from smartphone production to military capabilities.
Efforts are underway to change this dynamic. Trump’s strategy involves securing supply agreements with friendly nations and investing in domestic production. Recently, there was a pivotal deal with Kazakhstan and increased investments in Canada aimed at cultivating U.S. self-sufficiency. However, the most significant move may be the nearly $3 billion acquisition of Brazil’s Serra Verde Group, which is positioned as a strong player in producing rare earths outside of Asia. Tim Johnson, a technical advisor to REalloys, remarked on the pervasive grip that China has on production, stating, “100% of all production today relies on some Chinese nexus, whether or not that’s technology, procurement of equipment, supplies, or reagents.”
China’s path to domination wasn’t accidental. It began with U.S. prospectors discovering rare earth elements in California back in 1949. Following this, China systematically studied and replicated U.S. technology in the 1980s and 1990s. Once it established its own industry, it did so at a great environmental cost, leading state media to draw dramatic parallels between rare earth operations and drug trafficking. The Chinese government’s imposition of export quotas in the 1990s eventually morphed into a “secret war” for consolidation that eliminated competition and led to state-controlled monopolies.
These state-backed monopolies have now come to dominate critical phases of rare-earth supply chains, from refining to manufacturing high-performance magnets essential for advanced technology and defense applications. The Trump administration’s measures, particularly around Latin America, are seen as a means of not only eliminating U.S. reliance but also minimizing Beijing’s influence. The significant acquisition of Serra Verde Group is expected to produce over half of all non-China heavy rare earth supply by 2027, thus carving an alternative route that alleviates dependency on Chinese resources.
Moreover, the broader regional strategy involves aligning with countries such as Argentina, Ecuador, Paraguay, and Peru. At a recent Critical Minerals Ministerial meeting, the United States solidified eleven new bilateral frameworks aimed at bolstering supply chains across Latin America. This includes a $100 million loan from the Inter-American Development Bank for a major lithium project in Argentina. The focus here is clear: build local processing capacity rather than shipping raw materials to Asia.
REalloys stands as a notable player in this push for independence. The company is working towards a fully contained North American supply chain that excludes any Chinese inputs. By processing materials in Saskatchewan and continuing to source from Kazakhstan and other allied nations, it aims to dominate the supply of heavy rare earths as early as 2027. Johnson emphasizes the seriousness of this dependence: “To be 1% reliant on China is to be 100% reliant on China.” His statement underlines the precariousness of any indirect dependencies that could expose vulnerabilities.
The implications of these developments navigate far beyond economic considerations; they extend into the realm of national security. Heavy rare earths are critical for a multitude of military applications, including precision-guided munitions and advanced aeronautics. With the Chinese government tightening its grip through export controls that impact even third-party transactions, the urgency of establishing a U.S.-aligned supply chain has never been clearer.
Trump’s administration is vigorously working to break free from China’s widespread control over rare earths. This multi-faceted strategy—a mix of international agreements, domestic investments, and aggressive pursuit of new production capabilities—signals a long-term commitment to achieving not only independence but also resilience against external pressures. By reinforcing regional partnerships and increasing the production capabilities of allies such as Brazil, the United States is laying the groundwork for a secure and sustainable rare-earth supply chain.
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