Rare Earths Production: US Invests Heavily in Local Supply Chain
In a bold move to boost domestic rare earths production, the US government plans to become the largest shareholder in the country’s only active rare earths mine. Located in Mountain Pass, California, the site plays a vital role in securing materials used in electric vehicles, wind turbines, and defense technologies.
The US Department of Defence will give a lot of help to the mine run by MP Materials. The government has promised a minimum price of $110 per kilogramme for two important elements, neodymium and praseodymium, for the next ten years. Permanent magnets used in electric motors, smartphones, and medical devices are made from these minerals.
Challenging China’s Rare Earths Dominance
This choice comes at a time when people are worried about China’s control over the global rare earths market. China makes about 70% of the world’s rare earths and refines more than 90% of them. For years, Beijing’s strict rules and low prices have kept a lot of foreign competitors out of the business.
Previously, MP Materials sent its raw ore to China for processing. The company also counted on Chinese firm Shenghe Resources as its main customer and investor. However, recent trade tensions ended that relationship. The US imposed a 145% tariff on Chinese imports, while China responded with a 125% duty on American goods. These developments made the previous arrangement both costly and politically risky.
Expanding US Refining Capacity
MP Materials is going to open a rare earths processing plant in the US to cut down on its reliance on foreign partners. They haven’t picked the final spot yet. The site will, however, support both the military and business sectors. The Defence Department is spending $400 million to make this happen by buying newly issued company shares.
This step is part of a broader national strategy to rebuild critical supply chains and protect national security. With growing concerns over AI, clean tech, and military readiness, the US sees rare earths as a key to future competitiveness.
Securing the Future of American Innovation
The US wants to control more of its important resources by investing in the production of rare earths. This plan will not only keep important industries safe from problems around the world, but it will also make the country less dependent on its geopolitical rivals in the long term.
Rare earths could be the basis for the next era of growth in energy, technology, and defence as the US works to rebuild its industrial strength.
