MP Materials Will Increase Rare Earth Production in Sino-US Trade War

Reuters reported that after the Sino-US trade war has heated up rapidly, MP Materials, the only rare earth mining company in the United States, said it will double its staffing as one of the strategies to build refining strength. This is part of the American strategy to strengthen refining capacity after the Chinese tariff escalation process has been raised.

MP Materials executives said that by next year, they will be the first US company to refine rare earth since 2015. Molycorp Inc., a former owner of the Mountain Pass mine in California, bankrupted in 2015, since then, the mine has relied on China to carry out refining and processing, which has aggravated US national security concerns. China is the world's 17 largest countries in rare metals processing and production for the manufacture of weapons, consumer electronics and a range of other commodities. There are currently no other known alternatives.

In June this year, the Chinese tariff on imported rare earths from the US doubled to 25% during the Sino-US trade war. Beijing said on Friday that it will start adding another 10% on this tariff starting next month, the latest tit-for-tat exchange rate in the protracted trade dispute between the world's two largest economies.

The Trump administration said that rare metals are vital to national defense and ordered the Pentagon to support domestic mining production. MP Materials Co-Chair James Litinsky said, “China has recognized that this is a strategic industry.”

MP Materials plans to increase the number of employees from 200 to about 400 next year. Compared with the Morley company, the company's rare earth concentrates increased by 68%. But these more than 50,000 tons of rare earth concentrates are shipped to China for processing. To restore refining capacity in California, this privately held company spent $200 million to restart mine-sealed equipment and build a large roaster. “Treaties are very painful, but we can still make profits,” Litinsky said.

MP Materials plans to increase rare earth production during Sino-US trade war image

After processing the concentrates, they must be converted into rare-earth magnets for use in the manufacture of precision missiles, elf bombs, and jet fighters, but China also controls the magnet industry. Litinsky believes that pulling extracts back to the US will encourage other investors to build magnets and related industrial sectors in domestic. He said their company also plans to restart the chlor-alkali facility in Mountain Pass for the separation.

Mark Seddon, an analyst of Args metals, said that he is not optimistic of MP Materials will be able to restart rare earth processing equipment next year, however, once the refining equipment is officially launched, the goal will be to produce 5,000 metric tons of neodymium and praseodymium per year, two of 17 rare elements used in making magnets. This will ease US resource tension during the Sino-US trade war.

 

 

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