Input Stories

The Trump administration is following through on promises to produce more critical minerals domestically and improve access to these resources internationally—but does the U.S. have the needed processing capacity (The Wall Street Journal, subscription)?
 
What’s going on: Earlier this month, President Trump signed an executive order to boost mining of the vital substances here at home. Yet “even if the Trump administration secures more mines for American companies through agreements like the mineral-rights deal being discussed with Ukraine, it may have to send much of the minerals to China—its main geopolitical rival—to be processed,” according to The Wall Street Journal.

• Among these materials are rare earths, a group of minerals used in the manufacture of fighter jets, drones and other defense applications and which the administration hopes to buy from Ukraine.
• The U.S., with significant rare earths supplies, is second only to China when it comes to rare earths production, but in the 1960s, it began to lose processing capability to its rival due to China’s cheaper labor force and less stringent environmental regulations. Today, China is responsible for about 85% of the world’s rare earths refining. 

Why it’s important: “Today, the sheer scale of China’s refining industry makes it difficult for others to compete”—and the U.S. is reliant on “its main geopolitical rival” for processing.  

• “Chinese companies then turn the ore into the final product—rare-earth magnets—and export the magnets back to the U.S.” 
• The U.S. has “substantial supplies of copper” that, with increased processing capacity, could be further developed into an even stronger domestic supply chain.
• The world’s top cobalt refiners are all Chinese, and Chinese companies are the dominant players in nickel processing.  

Overregulation stalls progress: In 2023, an Australian rare earths refiner received $258 million in financing from the U.S. government to build a processing facility in Texas.  

• “Nearly two years later, the project has yet to begin construction, delayed in part by permitting issues related to wastewater treatment.” 

Success story: MP Materials, the Las Vegas, Nevada–based operator of the Mountain Pass Mine in California, is making headway in the U.S. rare earths processing game.  

• The company “is gradually weaning itself off Chinese refining. Over the past few years, [it] has built processing facilities, including a Pentagon-supported plant that does the complex work of sifting out the most valuable minerals to be used in magnets.”
• Earlier this year, it announced that it had begun commercial production of rare earths.
• Next up: manufacturing rare-earth magnets at commercial scale—which it “hopes to do by year’s end.” 

The NAM says: “Mining and minerals processing is a key manufacturing process that creates inputs for numerous other industries—from energy to artificial intelligence to national defense,” said NAM Vice President of Domestic Policy Chris Phalen. 

• “It is imperative that the U.S. addresses much-needed permitting reforms and maintains key strategic manufacturing incentives to ensure strong supply chains and manufacturing capabilities here at home.”