BUSINESS

US Takes Big Step to Control Rare Earth Metals

Mountain Pass, USAThu Jul 10 2025
The US is stepping up its game in the rare earth metals industry. It's investing heavily in the only operational rare earth mine in the country, located in Mountain Pass, California. This move is a big deal because rare earth metals are super important for modern tech like electric cars and wind turbines. China has been the boss in this industry for a long time, controlling about 90% of global mining capacity. That's why the US is taking action to reduce its dependency on imports. The US Department of Defense has made a deal with MP Materials, the company that owns the mine. For the next 10 years, the government will guarantee a minimum price of $110 per kg for neodymium and praseodymium, two of the most sought-after rare earth metals. These metals are crucial for making permanent magnets used in everything from smartphones to electric motors. The US is also funding a new facility to refine these metals right here in America. This means the US won't have to rely on China for refining anymore. The Department of Defense is buying $400 million worth of shares in MP Materials to make this happen. This is a big shift because until now, a Chinese company called Shenghe Resources has been one of MP Materials' largest shareholders. But with the new tariffs, sending rare earth metals to China for refining is no longer practical or in America's best interest. This move is all about making the US less dependent on China for these crucial metals. It's a strategic step to secure the supply chain and boost American independence in this critical industry.

questions

    What are the long-term implications of the US government's investment in rare earths for global trade and geopolitical relations?
    How will the US government's investment in rare earths production impact global market prices and competition?
    How might the US government's investment in rare earths production affect the balance of power between the US and China in the technology sector?

actions