Trump Issues Directive To Increase US Production Of Rare Earths

Rare Earth Supply
Heavy mining equipment hauls overburden material across Molycorp's Mountain Pass Rare Earth facility in Mountain Pass, California (Photo: Reuters / David Becker)

US President Donald Trump has issued a directive for the country to bolster its production of rare earth as a precautionary measure. The move is meant to cut the country's reliance on imports of rare earth minerals from China amid its ongoing trade dispute.

The directive itself has now opened the doors for US mining companies to seek additional funding from the government to bolster their production. With the additional support and funding from the US government, the country could re-establish its own integrated supply chain for rare earth metals.

From the mid-1960s to the mid-1990s, the US was the world's largest producer of rare earth minerals. Unfortunately, China overtook the US when it ramped up its production of lucrative minerals, which then flooded the international market.

The US slowed down its production and acquired most of its rare earth need by importing the materials from China. Last year, China had produced 70 percent of the world's rare-earth.  Around 80 percent of the US' rare earth needs were supplied by China.

In July, Trump had invoked the Defense Production Act to prompt the Department of Defense to implement different measures to increase the country's production of rare earth minerals. The move was apparently a necessary countermeasure to China's threats of weaponizing its rare earth exports.

As the trade dispute between the two of the world's largest economies continued, China had threatened to reduce its supply of rare earth to the US as a direct response to Trump's imposed tariffs on Chinese imports.

Trump specifically asked for the increase in the production of rare-earth that are used to make magnets. These magnets are typically used to make different military and commercial equipment ranging from tanks and fighter jets to electric vehicles and electronic gadgets.

According to the head of government affairs for USA Rare Earth, Dan McGroarty, the US does have a sufficient amount of deposits to meet the needs of the country for defense and commercial purposes. USA Rare Earth is one of the firms that are currently vying for increased government orders.

If USA Rare Earth is granted additional funding, the company will reportedly be using the additional capital to accelerate its development of a new mining and ore processing system called Round Top.

If successful, the project will enable the company to produce 15 out of the 17 rare earth elements on top of its massive lithium production capacity. Apart from USA Rare Earth, other US mining companies are also vying for the government's bolstered funding. 

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