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Pentagon to Rebuild US Rare Earth Production Chain

Posted by: Chris Na 2021-11-12 Comments Off on Pentagon to Rebuild US Rare Earth Production Chain

Pentagon to Rebuild US Rare Earth Production Chain

Category: tungsten’s News
Published on Sunday, 29 November 2020 21:09

Under the guidance of Trump’s order to expand US rare earth production and support the domestic supply chain, the Pentagon announced that it will allocate approximately $13 million (about NT$370 million) to three rare earth mining companies to help them rebuild the U.S. rare earth production chain for getting rid of dependence on rare earths in mainland China.

The National Defense Magazine issued by the National Defense Industry Association (NDIA) reported that MP Materials, the largest rare earth mining company in the Western Hemisphere, has received a grant of $9.6 million from the US Department of Defense under the National Defense Production Act. The Mountain Pass mine refines important strategic rare earths. In addition to MP materials companies, California "TDA Magnetics" and Texas "Urban Mining Company" also received $2.3 million and $860,000 in funding.

With three grants, the Pentagon intends to rebuild U.S. rare earth production in response to Trump's Executive Order No. 13817 signed on September 30, calling for the important strategic rare earth production chain to return to the United States, to get rid of its dependence on China's rare earths, and to avoid the CCP To ban the export of rare earths, threaten the United States.

Litinsky noted that while the Pentagon and its contractors will be customers for the magnets – as they don’t want to depend on China for critical parts – defense-related technology will only make up 1 percent of the demand. That could not sustain a domestic industry. Instead, the majority of business will come from a burgeoning demand for electronic vehicles, wind turbines and other emerging technologies, he said.

After separating the 17 elements needed to create magnets from the Mountain Pass ore, MP Material currently sends the raw material to China for refinement. Litinsky said the company’s goal is to do the refinement on site by 2022 and eventually cut China out of the supply chain for the production of high-end magnets entirely by manufacturing them in the United States.

While the US Pentagon grant is “humbling,” Litinsky noted that the company is profitable, has some $500 million of cash on hand and there is $1.7 billion of capital already invested on the site by the previous owner for the rare earth production.

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