US Pushes Domestic Production: Rare earth elements are crucial components in various high-tech products, including electric vehicles, powerful magnets, advanced fighter jets, submarines, smartphones, and television screens. The 17 elements, despite their name, are not actually rare, but finding them in high enough concentrations to make mining economically viable is a challenge.
Impact of Chinese Export Restrictions
The recent export restrictions imposed by China on rare earth elements have significant implications for the global supply chain. MP Materials, which operates the Mountain Pass mine in California, has announced that it will stop sending its ore to China for processing due to the export restrictions and 125% tariffs on US imports. Instead, the company will process nearly half of its ore on-site and store the rest while it expands its processing capability.
US Rare Earths Production
The US currently has only one operational rare earths mine, the Mountain Pass site in California, which yields neodymium and praseodymium. These light rare earths are essential components of permanent rare earth magnets used in electric vehicles and wind turbines. However, the mine does not currently have the capability to process heavy rare earths, such as terbium and dysprosium, which are also crucial for the production of high-performance magnets.
Price Increases and Supply Chain Disruptions
The export restrictions have already led to price increases for some rare earth elements. The price of terbium has jumped 24% since the end of March to reach $933 per kilogram. Experts warn that manufacturers that rely on rare earth elements may see further price increases, although there is currently enough global supply to meet demand.
Efforts to Develop New Mines
Two companies, NioCorp and US Critical Materials, are working to develop new rare earths mines in the US. NioCorp is seeking to build a mine in Nebraska, while US Critical Materials is exploring a site in Montana. Both companies hope that the push from the White House will help them secure funding and approvals to start production.
Challenges and Opportunities
Developing new rare earths mines in the US is a complex and challenging process. However, with the increasing demand for rare earth elements driven by the growth of electric vehicles, wind turbines, and other clean energy technologies, there is a significant opportunity for US companies to reduce their reliance on Chinese imports and establish a more secure and sustainable supply chain.
Industry Response
Major defense contractors and automakers have declined to comment on the impact of China’s export restrictions on their businesses. However, some industry experts warn that manufacturers may need to absorb price increases in the short term, although this may not be sustainable if the restrictions remain in place.
Still on US Pushes Domestic Production
Government Action
President Trump has issued an executive order calling for an investigation into the national security implications of relying on China for rare earth elements. The US government is also providing support for companies like MP Materials, which is working to expand its processing capability with the help of a $45 million grant.
Timeline for New Mines
A new rare earths mine in the US is likely to take several years to become operational. NioCorp estimates that its proposed mine in Nebraska could start production by the end of Trump’s presidency, although this is contingent on securing funding and approvals. US Critical Materials is also working to develop its site in Montana, although it is still in the early stages of development.
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