Some answers here touch on some secondary reasons. But if you look at it closely, the reason the US (and the entire world) is dependent on China for rare earth elements is that ores with extractable concentrations are, in fact, rare and processing these ores into usable concentrates is, in fact, incredibly difficult and has advanced a lot in the last couple of decades and that advancement has come from China.

Most of said deposits are either in China or Myanmar (a country that the US simply can never pull away from china’s influence no matter what they try).

The majority of the world’s rare earths are now processed in Baotou Inner Mongolia, largely using third-generation sulfuric acid roasting technology, having long ago abandoned polluting in-situ leaching.

But the most important point: Earth chemistry PhD programs are offered at many dozens of Chinese universities versus none in the US. China has produced over 50,000 rare earth patents in the past two decades versus a negligable number anywhere else. Almost all of the Cutting-edge science in the field is published in a handful of dedicated Chinese rare earth journals. The lead in scientific and industrial know how and R&D china has accumulated in the rare earth refinement and processing is greater than the lead it has in other high tech sectors it leads like batteries of telecoms or green energy.

China restricted rare earth exports to Japan over an East China Sea dispute. Japan went all balls investing in rare earths. Lynas and refiner in Malaysia. After 15 years they have made slow progress and still import like 60% of Light RE and lose to 95% of HRE from China. Now even that is probably stalling if they can’t buy Chinese equipment. And thats a remotely competent and industrial country like Japan. Not the US

like come on lmao

The first reason is cost, and the same reason why the US continues to rely on importing uranium from Russia even to this day, more than 3 years since the war in Ukraine has started.

After the fall of the USSR, the Lisbon Protocol was signed which included Russia converting their highly enriched uranium from their massive nuclear arsenals (as part of the non-nuclear proliferation agreement) and blending them down into low-enriched uranium to be used as fuel for the nuclear power plants in the US.

Why invest in uranium extraction and processing when you’re practically getting it for free?

The second reason is the export of environmental pollution to the developing world.

You’d notice that the narrative now is that the Western world lost its supply chain and falling behind China because of the restrictive environmental policies that made it very expensive and hazardous to perform and to maintain such dirty extraction and processing work in their own countries.

It will be used as excuses to kill the environmental policies in Western countries, and perhaps the main reason behind this whole drama, to drive the narrative that “left-wing environmentalism is why you’re losing your jobs”.

The hard part about producing useful amounts of rare earth minerals is that you have to process large amounts of ore and isolate the trace minerals, which is more involved and energy intensive than processing iron or copper, for example. With the more common metals, the extraction is most of the work, whereas with rare earths, the extraction is just the start of the process. That’s what makes rare earth mineral production more of an industrial process than a purely extractive process.

In the early 90s, realizing that there would be ever-growing demand for rare earths as technology advanced, China set out to create a rare earth mineral refining industry as a big part of their economic development program. The West was busy deindustrializing and was happy to let China effectively subsidize rare earth mineral production. China cornered the market on rare earths by scaling their production the same way they scaled up the rest of their industrial capacity, and they effectively monopolized the market by virtue of simply having the industrial capacity. No one else wanted to spend the time or resources to create more capacity because it wouldn’t have been profitable, and there was plenty of supply coming from China. It seems they weren’t thinking about the strategic issues.

In 2010, China moved to restrict some of their rare earth exports to Japan as a result of a fishing rights dispute. That kicked off some back and forth about rare earth trade and caused some investment in non-Chinese mineral refining, but because of all the deindustrialization and lack of ability to even execute on industrial policy, the situation is little changed.

Rare earth mineral production is an industrial scale problem, requiring long lead times and major up-front investment. The US has the material and skills capacity to build that industry, but the industry doesn’t exist, and there’s not a purely economic or financial reason to create it. It is a long-term strategic issue that requires long-term economic planning, and the US doesn’t have the capacity for long-term economic planning. Even today, when the strategic issue is clear, the US powers-that-be aren’t capable of investing in the solution properly because they would see it as doing communism.

Amerika had the power of the dollar and empire, they didn’t need to build anything themselves. In their hubris, they thought their reich would last forever.

I don’t know to what extent this is actually true for all kinds of rare earth minerals, but I once watched as a guy in the industry talked about how you don’t really have a mine of Rare Earth Type A. What you have is some sort of huge fuck off iron mine in Inner Mongolia that happens to have trace amounts of Rare Earth Types A B and C. You wouldn’t exploit said iron mine if you didn’t also have a huge steel industry. So the lack of mineral exploitation in this case is actually the flipside to western deindustrialization and financialization.

It makes financial sense to exploit these mines in China because of their massive industrial demand, it might make sense to exploit these mines in poorer commodity exporters but one wonders about the infrastructure and the financing involved. And though rich neoliberal countries have the capital and the infrastructure, they lack state planning necessary to keep middle income industries like steel in place. So it’s become an East Asia game as those are the 3 countries with infrastructure, technology, capital and state planning all at once.

Oversimplified answer is that the last 50 years have consisted of the US deindustrializing itself and instead fully subsuming itself to a dictatorship of capital. They literally just want to shuffle money around and manage use that to manage their economy. It kinda sorta works as long as they can subjugate everyone around them via their military and economic dominance. That isn’t sustainable though, especially when you eliminate any counternarrative that is critical of you. Bernie/social democratic reforms would give the empire a let to stand on and slow the decline, but even that’s is not allowed.

On the other hand, The PRC has been introducing itself thoroughly and rapidly for the last 30 years. A strong industrial base produces even more industry, such as niche products like rare earth metals, complex products like automobiles (at scale) and aircraft (coming soon), and a skilled technical workforce.

It gives me a chuckle because I think Mao and maybe Stalin kinda fucked up by silencing criticism a bit too hard while silencing counter-revolution, and that may have contributed to famine if people couldn’t confidently report that things were getting dire without being accused of being a counter-revolutionary. The US has sort of done the same thing with the red scare which has doomed it from sustaining the global empire indefinitely.