Sole Rare Earth Mine in US - MP Materials Blacklisted by DOE

The US wants to curb its reliance on rare earth elements on China used to make weapons and high-tech equipment. The country only has one rare earths mine - MP Materials and government scientists have been told not to work with it because of its Chinese ties.

To blunt dependence on Chinese rare earth production, the US government plans to provide development funds for domestic rare metal projects. MP Materials, the sole rare-earth mine owner in the United States, Even as the U.S. Department of Energy (DOE) has blacklisted the company, is awaiting $40 for development funding from the Department of Defense. China's market and technical knowledge are blacklisted to remind the authorities not to cooperate with them.

Rare-earth elements are widely used in military equipment and high-tech products such as missiles, fighter jets, night vision goggles, and the taptic engine - the core part of the iPhone. China is the world's largest exporter of rare earths, accounting for 80% of U.S. imports. The company, which bought the mine in 2017, describes itself as an American-controlled company with a predominantly U.S. workforce.

The DOE points out MP Materials, which has a conflict of interest with China, reminding scientists not to cooperate with their companies. The company's major shareholder is the Chicago hedge fund JHL Capital Group, which holds 65% of the shares, and Chinese capital Shenghe Resources Holding Co. holds about 10% of the shares.

Beside from shareholder from China, the company's annual revenue is about one hundred million dollars all from Chinese customers. The majority shareholder JHL Capital Group Chief Executive Officer James Litinsky said that without the help of Chinese technology partners it is impossible to re-exploit rare earths. Because of the lack of related technologies, MP Materials exports 50,000 tons of rare earth to China for processing every year.

With the continued trade friction between China and the United States, coupled with the impact of covid-19 pandemic, Western countries are looking at if they are dependent on the Chinese supply chain too much. To get rid of dependence on China, the authorities are trying to revitalize the domestic refined rare earth processing industry.

Despite its close relationship with China, given that MP Materials is the only leader in the US rare earth industry, it has a clear advantage in competing for funding from the Ministry of Defense. The company plans to spend another 200 million dollars to restart the sealed equipment and restore the refining capacity in the United States. The goal is to produce about 5,000 tonnes per year of the two most common rare metals, more than enough for U.S. military needs.

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