China accounts for over 95% of the world’s production of rare earths, giving it the ability to place US industry and defence in a stranglehold, should it choose. It’s been a significant concern for President Trump’s administration, who have sought avenues to boost domestic production of rare earths. In 2019, the US Commerce Department recommended the US should take urgent steps to boost domestic rare earth production, and recommend stockpiling as a short-term measure, combined with longer-term measures to explore, develop and process more rare earth minerals.
MP Material’s Mountain Pass mine in California is the only operating rare earths mine in the US and has been the subject of much interest from the federal government for that reason. The listing will be a boon to the US government and US industry as a major step in reducing the reliance on China for rare earths.
MP Materials will net around $489m from the merger and a separate stock offering with other investors. The company will use the funds to upgrade outdated processing equipment at Mountain Pass, which has held over from the Molycorp era. Currently, MP Material’s lack of processing equipment means it has to ship over 50,000 tonnes of concentrated rare earths to China each year for processing. $fvac
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