China refines roughly 90% of the world's rare earths and mines about 70% of global output. That single statistic frames every supply-chain decision now facing US automakers sourcing magnets for EV traction motors, and it explains why Washington spent 2025 putting policy money behind a domestic mine-to-magnet chain with a 2027 target.

The dependency is not accidental. The US dominated rare earth mining from the late 1940s, when the Mountain Pass deposit in California became the world's leading source. China reversed that position deliberately. It invested heavily in mining at Bayan Obo in Inner Mongolia and in processing capacity, and by the time it joined the WTO in late 2001 it had undercut US producers on cost. As Deng Xiaoping put it in 1992: "The Middle East has oil; China has rare earths."

Mountain Pass shut two decades ago under the combined weight of Chinese price competition and environmental and regulatory problems. US consumers of rare earth elements — smartphones, EVs, industrial motors, medical equipment, aerospace systems — turned to Chinese suppliers, and the gap in both mining and refining kept widening.

The turning point, by most accounts, was 2010. China imposed significant restrictions on rare earth export quotas, hoping to force overseas tech manufacturers to relocate production to China. The move backfired. The US and other countries began building strategies to reduce reliance on Chinese supply.

Production restart first. MP Materials took control of the shuttered Mountain Pass mine and resumed mining in 2018. This year, a second major mine — Red Mountain Pass in Colorado — reopened, and Niocorp launched the Elk Creek critical minerals project in Nebraska. Wyoming's Halleck Creek project follows close behind.

Policy followed in 2025, when the US government set long-term objectives to minimize reliance on foreign sources by establishing an end-to-end domestic supply chain. The stated goal is an uninterrupted mine-to-magnet supply chain on US soil by 2027, starting with new extraction, separation and refining capacity.

The Department of Energy is funding extraction from unconventional sources — mine waste and tailings, coal byproducts, industrial waste and, most promising by its own assessment, recycled electronics. Earlier this year the DOE's Office of Critical Minerals and Energy Innovation launched projects with the Colorado School of Mines and rare-earth recycling startup Phoenix Tailings to design and build facilities demonstrating commercial viability of recovering and refining REEs.

The Department of Defense is working the other end of the chain: magnets. Last year DOD announced a public-private partnership with MP Materials to construct a magnet manufacturing facility rated at 10,000 metric tons per year — capacity aimed squarely at guidance, propulsion and communications systems, but with obvious read-across for automotive traction-motor supply.

MP Materials is not alone. In Texas, REEcycle — also with DOD support — has patented a process to recover magnets from hard drives, EV motors and industrial equipment. HyProMag USA, also in Texas, recovers and reuses magnetic materials. Vulcan Elements, a North Carolina startup, works the same problem. Domestic refining and production capacity, while still small against China's base, is compounding.

For procurement teams, the caveat is straightforward. These are announced intentions and early-stage projects, not confirmed volume. China's refining dominance remains intact, and Beijing has shown willingness to weaponize it — its recent export restrictions on rare earths to the US are precisely what accelerated the current buildout. Any assessment of supply security should track actual separated-oxide and magnet output against these announcements, not the announcements themselves.

What to watch next: whether MP Materials and DOD hit their 10,000-tonne magnet capacity milestone on schedule, whether the DOE's recycling demonstrations with Phoenix Tailings and Colorado School of Mines prove commercially viable, and whether Washington holds the 2027 mine-to-magnet deadline as a hard policy commitment rather than an aspiration.