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Trump’s leadership is encouraging the progression of a domestic industry to produce critical metals now governed through Chinese companies, but few players have a transparent long-term promise.
By Zach Montague
WASHINGTON – A Trump administration effort to break China’s control over generating coveted metals important to national security and many industries has waged war between domestic mining corporations and their political allies to earn millions of dollars in federal aid.
Metals, called rare land, are used in products as varied as smartphones, electric cars and wind turbines, as well as in military equipment. Fear of insuring has intensified since the U.S.-China industrial dispute that dominates world production intensified.
The administration’s eagerness to develop national capacity has led to an avalanche towards small industry, attracting a number of corporations with no history of mining or infrequent land refining, some of which have a reputation for being tough friends in Congress.
With China sending about 80% of the rare land to the United States as of 2018, the Trump administration has set itself the purpose of moving the entire chain of rare land metals to U.S. soil. And as political interest in the industry has increased, so has Wall Street interest.
There is the view that creating a national industry is an ambitious undertaking. The United States has only one infrequently operational landmine in Mountain Pass, California.
The site acquired after a bankruptcy in 2017 through MP Materials, an American company that deals with the renovation of a processing plant dating back to the 1950s. As the facility is still modernizing, the company is recently shipping the minerals it mines to China for processing.
MP Materials announced an agreement to be made public in July, merging with a blank corporate check and opening to foreign investments. MP Materials expects to raise approximately $490 million through this agreement. The company also faced scrutiny from one of its investors, a Chinese company that owned approximately 10% of MP Materials before the agreement diluted its stake.
For years, several start-ups have been running to expand sites in other states. They come with Ucore in Alaska, Texas Mineral Resources Corporation in Texas and Rare Element Resources in Wyoming. Although in rare earth deposits for years, none have innovated or started processing metals in significant quantities.
In April, MP Materials, one of two corporations that decided on a Pentagon award, aimed to generate a narrow elegance of rare ground metals, essential for many army devices. The investment was also awarded to Lynas Corporation, an Australian company that already mines minerals from a mine in Australia, which submitted its offering in partnership with Blue Line Corporation, a Texas-based processing company. The amount of praise not disclosed.
A Cruz spokesman said the senator was only interested in building a chain of national sources and was not pushing on behalf of a specific company. “The government never chooses winners and losers, which is a market task,” he said in an email.
Industry experts have warned that the few other corporations that are likely to achieve the purely national production ideal are almost many years away from this level and face abundant demanding situations to achieve this.
“We take into account that it takes almost a decade to bring a rare land allocation from the first mineral identity to production, and that’s really keeping in mind that everything is going relatively well,” said David Merriman, director of Roskill, a London-based commodity research company. “For the U.S. He can’t really wait for assignments that will take six, seven, eight, maybe up to 10 years.”
To spur industry’s progress in the United States, President Trump issued rules a year ago authorizing financing for domestic corporations running in five other stages of rare land production, adding finished refining and production products.
According to a Department of Defense proposal received through the New York Times, the Pentagon has already allocated at least $125 million under the Defense Production Act to fund rare land projects this year. According to the law, the branch can spend $50 million on the five known categories through the White House, up to $250 million. Management has suggested to Congress, unlucky so far, ask for more.
The Department of Energy is also offering nearly $160 million this year for rare land studies and development.
Last month, the Pentagon invoked the Defense Production Act to grant about $30 million to Urban Mining Company, a small Texas company, which said it could manufacture rare earth products by recycling metals from discarded electronics that contained them.
According to the Urban Mining Company website, it employs about 25 people. Since 2018, he has donated at least $240,000 to a lobthroughing company run by Jeffrey A. Green, a rare land specialist who has represented Ucore since at least 2011, according to the Center for Responsive Politics.
A spokesperson for Urban Mining Company did not respond to requests for comment.
In May, Cruz filed an invoice that would set aside $50 million for the Pentagon to finance infrequent land projects until 2024, and use tax incentives to allow brands to deduct twice the charge of all rare domestic lands they purchased. Another bill brought in 2019 through Florida Sen. Marco Rubio would create a rare land cooperative that would act as a monopoly.
While the proposed amounts of federal aid are modest according to the Pentagon’s procurement criteria (a single F-35 fighter jet costs about $80 million), they are a significant condiment for new companies that have not yet innovated.
Companies such as Ucore and USA Rare Earths, which has a 70% stake in texas Mineral Resources Corporation, have aggressively emphasized the option of turning their mines into good luck stories. Both have promoted complex processing technologies and fixed lobbying efforts, but have still gone beyond the exploratory stage.
From 2019 to early this year, USA Rare Earth was represented through Jeff Miller, a prominent Republican supporter who served on Trump’s inaugural committee and also helped lead Rick Perry’s 2016 presidential campaign. A July lobthrough report indicates that USA Rare Earth in particular lobbied in favor of Cruz’s bill.
In June, Ucore CEO Jim McKenzie, who had run the company since 2007, resigned two months after the company lost to MP Materials and Lynas for the grant they had won. Ucore has not extracted or generated significant profits since its founding in 2006, according to its monetary documents.
While new financing of rare land production is strongly related to national security interests, the military accounts for only a fraction of the market. To be economically viable in the long run, rare land corporations largely have the demand for advertising, which has grown slowly over time.
While the United States was once a world leader in rare land production in the mid-20th century, it gradually ceded its dominance to China, where lax environmental regulations facilitate highly polluting mining activities. Since then, Chinese corporations have also governed the mineral metal separation sector.
After China caused an increase in in infrequent land costs by restricting the source in 2010, a multitude of investors and corporations emerged with commercially viable tactics to create a rare land business in the United States. But China temporarily reversed its course, causing lower costs and undervaluation of efforts to build a U.S. industry.
Rare earth corporations face many other barriers in the United States. Separating and marketing the unique mixture of steel compounds at a given site requires technical expertise and strategy, and new mines face a long environmental approval process, in component due to radioactive mineral waste requiring disposal.
“In a sense, the first steps are simple and well-understood, however, the real challenge to make effective is to make separation,” said Eric J. Schelter, professor of chemistry at the University of Pennsylvania.
Pini Althaus, managing director of USA Rare Earths, said the company had achieved promising effects by processing minerals in small quantities as a component of a pilot program and that it hoped to have its Round Top mine near El Paso in service until 2023.
The Round Top mine has yet to prove economically viable. In component due to low concentrations of rare terrestrial minerals on the site, the company plans to process and market a dozen other local substances, such as lithium, which in combination account for more than two-thirds of its sales.
Other ingredients that the company has claimed to produce, such as uranium and beryllium “yellow cake”, are known carcinogens and require costly and complex procedures to be treated safely.
“No one has noticed a task like this in the world,” said David R. Henderson, president of Rittenhouse International Resources, a special fabric marketing company.
According to experts, if the existing political dynamics continue, one or more new sites in the United States may still begin to produce, with sufficient time, effective and tolerance to pollutants.
“If you put enough cash, anything will come out the other side, it’s just not a smart investment,” said Eugene Gholz, a professor of political science at the University of Notre Dame. “You can pass and get cash from investors and threat investors, but it’s even bigger if you can approve and get cash from the government, in terms of accumulating cash in favor of your own profitability.”
But given the existing global call for rare land, doubts remain about whether the market is in a position to absorb any other mining business and whether a company can do so in the long run without extended government investment.
“The government wants, at best, to replace the game regulations for those new producers, give them a better chance, and maybe it will work,” Schelter said.
“Perhaps some of them are to identify themselves and have a long-term support process, either in economic and environmental terms,” he said. “But at this point, it’s too early and too complicated to say which, or none, of these.”
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