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The only rare earth metals-producing mine in the U.S. is facing short-term refining challenges as the nation to looks to reduce its reliance on China for the materials due to the trade war.

China dominates the refining and mining of rare earth minerals, which are key to the making of everything from iPhones to rechargeable batteries to military weapons.

“We’re it,” James Litinsky, co-chairman of MP Materials, which owns the Mountain Pass mine, said Thursday on CNBC’s “Squawk Box. ” “If we can’t be economic, there’s no hope for the U.S. industry.”

Mountain Pass, located in California, ships nearly 50,000 tons of rare earth concentrate to China each year for processing, according to a Reuters report.

“There’s no refining capacity in the world outside of China,” said Litinsky.

China has imposed a 25% tariff on rare earth imports during the trade war, making the operator of the Mountain Pass mine the only U.S. company affected by this specific retaliation.

Meanwhile, China threatened this week to cut off rare earth mineral sales to the U.S., after President Donald Trump blacklisted Chinese telecom giant Huawei. Speculation about payback first surfaced when Chinese President Xi Jinping visited rare earth mining and processing facilities during a domestic tour last week.

The Pentagon, according to Reuters, recently presented a report to Congress on the rare earths market and how to find alternative sources from China.

A move by Beijing to follow through on its threat would be a “major escalation” of the trade war, Ray Dalio, co-founder of the world’s largest hedge fund, wrote in a LinkedIn post Wednesday. Bridgewater Associates’ Dalio also called the materials a “critical import that American companies don’t produce and need to get from China.”

Litinsky estimated that Mountain Pass should be self-sufficient from China by next year and produce its own separated rare earth products.

But for now, Litinsky said, China is it when it comes to processing. “We’re talking to the [U.S.] government and hoping they’ll help us, but we’re not counting on it.”

— Reuters contributed to this report.