“Rare Earth Throne” of MP Materials in US-China Trade War

The “rare earth throne” of MP Materials is the best opportunity for the US in the US-China trade war. Rare earth has become an important bargaining chip in the trade war. MP Material is the only rare earth mining company in America. They own the Mountain Pass mine, which is an open-pit mine of rare-earth elements on the south flank of the Clark Mountain Range, just north of the unincorporated community of Mountain Pass, California, United States. 

The mine once supplied most of the world's rare-earth elements. MP Materials’ co-founder, James Litinsky said: "If the entire US rare earth industry needs to set off, it will be led by us."

Cable News Network (CNN) reported that with the US-China trade war, rare earth has become the key to the trade between the two countries. Rare earths are widely used in different industries, such as iPhones, wind turbines, Tesla cars, even military products and satellites. The Chinese side has also hinted that it can be used as a mean of trade by limiting rare earths.

In this case, Mountain Pass mine is the core of the US rare earth industry, MP Materials said that about 10% of the world's rare earths are supplied by them. The remaining rare earth enterprises are dominated by China because China has the advantage of low labor force and loose environmental standards.

Experts also said that although the Mountain Pass mine has high-quality rare earth materials, it is still impossible to separate the rare earths into the products needed for the technology supply chain, and the end products have to be exported to China for processing. Roderick Eggert, a professor of economics at the Colorado School of Mines, points out that the extraction and concentration of rare earths is often the easiest step, and the real difficulty is separation technology.

A US defense official told CNN that the Pentagon is expected to receive authorization and assistance from the Trump government in the near future to develop rare earth refineries in the American allies. China will no longer be the only option.

Ritinsky expects MP materials to open its own rare earth separation facility next year, capable of producing rare earth oxides and selling directly to global countries. He hopes that MP Materials will be able to complete the entire rare earth supply chain in the future, because almost all rare earth products are now completed in China or Japan.

Ritinsky hopes that the US government will pay attention to MP Materials and recognize the advantages of Chinese rare earth producers. For the Chinese authorities to offer subsidy programs and looser environmental regulations, Ritinsky said: We don't need those help, just ask for a fair competitive environment. The chances for MP materials may come soon, which will bring the best opportunity for American rare earth in the US-China trade war.

• < Prev
• Next >