Biden makes strategic investment to counter China’s dominance of rare earths

0

The US federal government has allocated $35 million to a company that plans to develop a rare earth metal processing plant in California. The investment is part of nascent efforts to reduce U.S. dependence on Chinese rare earths.

By a Bloomberg reportNevada-based MP Materials Corp will invest $700 million of its own money in the project, which will not only focus on rare earth mining and processing, but will seek to build an entire supply chain for permanent magnets, which are a key component of electric vehicles and wind turbines.

“We cannot build a made-in-America future if we ourselves depend on China for the materials that power the products of today and tomorrow,” President Biden said this week, as cited by Reuters.

However, the issue of opening new mines in the country is sensitive and could hamper efforts to strengthen the independence of states in importing metals and minerals.

According to Biden, the federal government would not authorize new mines unless “the historic injustices that too many mining operations have left behind” can be averted.

In addition, he said, “Environmental protection is paramount. We need to ensure that these resources actually benefit the people of the communities where they live, not just shareholders.”

Currently, the United States imports 80% of the rare earths it needs come from China. It’s an uncomfortable position for Washington, given the complicated relationship between the two nations.

Changing the situation, however, would take quite some time: China has built its dominant position in the production and processing of rare earths for decades, after the United States and Europe decided that they had no no need to develop local supply.

Currently, there is only one rare earth mine in the United States, the one operated by MP Materials Inc. However, the company sends the mined production to China for processing.

By Irina Slav for Oilprice.com

More reading on Oilprice.com:

Share.

About Author

Comments are closed.