There is a single rare earth mine in the United States. China's export restrictions are stimulating more driving force

OMAHA, Nevada (AP) – The only rare earth in the United States responded to Donald Trump's tariffs this month by restricting the export of minerals used in military applications and many high-tech equipment.

“Based on the number of calls we get, the effect is immediately generated,” said Matt Sloustcher, a company that runs Mountain Pass Inle in the Mojave Desert, California.

If China maintains its export control over a long period of time or expands it seeks an advantage in any trade negotiations, a trade war between the world’s two largest economies could lead to a serious shortage of rare earth factors. California mines can’t meet all U.S. demand for rare earths, which is why Trump is trying to clear the way for new mines.

Rare earth elements are an important ingredient in electric cars, powerful magnets, advanced fighter jets, submarines, smartphones, TV screens and many other products. Despite their names, 17 elements are not uncommon, but it is difficult to find a high enough concentration to make my investment worth investing.

Tariffs will affect ore supply and costs

MP Materials, which acquired the idle mountain pass location in 2017, said Thursday it will stop sending its ore to China for processing due to export restrictions and import restrictions imposed on U.S. imports to China. The company said it will continue to process nearly half of the on-site mines and store the rest as it works to expand its processing capacity.

“Selling our valuable key minerals under a 125% tariff is neither commercial rationality nor aligned with the national interests of the United States,” Congressman's material said in a statement.

Experts say manufacturers that rely on rare earth elements and other key minerals will see prices rising, but there may be enough global supply to keep the plant running at the moment.

California mines produce neon bugs and praseodymium, the main component of permanent rare earth magnets in electric vehicles and wind turbines. However, some heavy rare earths restricted by China, such as terbium and dosprosium, are key to helping magnets withstand high temperatures.

Since the end of March, the price of Terbium has risen 24% to $933 per kilogram.

“Our estimates show that there is enough inventory in the market to sustain demand,” said Neha Mukherjee, an analyst at Benchmark Mineral Intelligence Rare Earths, adding that shortages may occur later this year.

China owns a market

China has great power in the rare earth market. The country has the largest mine, producing 270,000 metric tons (297,624 tons) of minerals last year, while the 45,000 metric tons (40,823 metric tons) mined by the United States China provides nearly 90% of the world's rare earth, as it is also home to most processing power.

The restrictions imposed by Beijing on April 4 require Chinese exporters to have seven heavy rare earths and some magnet exporters to obtain special licenses. Retaliatory controls strengthen what the Trump administration and manufacturers think is terrible, requiring additional U.S. mines and reducing the country's dependence on China.

So far, Trump's attempts have failed to make Greenland and Ukraine provide the United States with more rare earths and other key materials to the United States. Last month, he signed an executive order calling on the federal government to simplify licensing approvals for new mines and encourage investment in these projects.

The two companies are trying to develop mines in Nebraska and Montana. Officials at Niocorp and key U.S. minerals said they hope the White House push will help them raise funds and get the necessary recognition to start digging. Niocorp worked for many years, raised $1.1 billion to build a mine in southeastern Nebraska.

“When I sat down, I thought about how we deal with the huge leverage of China on these minerals that don't even know how to pronounce for most of the time, and we have to deal with this leverage situation,” said Mark Smith, CEO of Niocorp. “I think the best way is that we need to make our own heavy rare earths here in the United States. We can do that.”

MP Materials is working to rapidly expand its processing capacity, partly with the help of the first Trump administration received by the company. However, after investing nearly $1 billion since 2020, the company currently has no ability to deal with the rare planet China is restricting. Members of Congress said that quick efforts are being made to change this.

Large U.S. automakers declined to comment on their reliance on rare earths and the impact of China's export routes. The restrictions on major defense contractors such as Boeing and Lockheed Martin, as well as more than a dozen other defense and aerospace companies are restricted against China.

Military technology is a smaller but important user of the rare earth. Trump issued an executive order on Tuesday calling for an investigation into the impact of national security, namely relying on China so relies on these elements.

A spokesperson for Lockheed is the spokesperson for the manufacture of F-22 fighter jets, which continuously evaluates “a global rare earth supply chain to ensure access to critical materials that support customer missions.”

Manufacturers prepare for price increases

Steve Christensen, executive director of the Battery Alliance, said some battery manufacturers may start to touch on key elements within weeks, an association representing battery, automakers and battery sellers.

Manufacturers have seen prices for antimony, an element used to extend the life of traditional lead-acid batteries, more than doubled since China restricted exports last year. The element is not 17 rare earths, but one of the key minerals Trump hopes to produce at home.

Initially, automakers may try to absorb any increase in battery costs without raising vehicle prices, but if Chinese restrictions remain, that may be unsustainable. Trump's 25% charge for all imported cars and auto parts cars is expected to increase costs, although the president this week hinted that he could give the industry a temporary probation.

Until the late 1990s, the United States met its rare earth needs. Production ended largely after low-cost Chinese ore flooded the global market. Robots, drones and other new technologies have rapidly increased demand for raw materials.

Niocorp recently signed a contract to conduct more exploratory drilling on its website this summer to help export Import Bank prove enough rare earth minerals to rest underground near Elk Creek, Nebraska to justify the $800 million loan to help fund the project.

But a new rare earth mine is years away from operations in Niocorp, and if everything is well integrated with fundraising, it is hoped to run at the end of Trump’s presidency, hoping to mine and process Niocorp, scandium, titanium and a wide variety of rare earths.

The U.S. key minerals plan to dig several tons of ore in Montana this summer so it can test the treatment it is developing. The Sheep Creek project is not as far away as the Nebraska project, but the U.S. Director of Key Minerals Harvey Kaye said the site has promising deposits and the rare earth is high.