U.S.-made rare earths will skip China and supply Japan

By Masumi Suga, Bloomberg News (Bloomberg) – The sole U.S. producer of rare earths has reached a deal to ship output from its new processing plant to Japan, a further push by the U.S. and its allies to reduce China’s role in their critical supply chain. part of a wider campaign.

MP Materials Corp., owner of the Mountain Pass mine in California, will sell material produced by its separation unit directly to trading giant Sumitomo Corp. for distribution in Japan. Output from the mine is usually shipped to China for processing, where Japanese companies buy it.

The U.S. and Japanese companies said in a joint statement that the agreement would “stabilize, diversify and strengthen supply chains critical to Japanese manufacturing.” The companies did not disclose details about sales or timing.

U.S.-made rare earths will skip China and supply Japan

U.S.-made rare earths will skip China and supply Japan

Mountain Pass has become a flagship project in U.S. efforts to reshape the flow of critical minerals, accounting for about 15% of global rare earth mined supply in 2021. U.S. President Joe Biden last year signed $35 million in additional funding to advance the U.S. beyond mining.

The United States is leading moves to weaken China’s control over the flow of minerals deemed strategically important. When it comes to rare earths, China has about 85 percent of the world’s refining capacity, according to the White House.

In addition to the separation plant, MP Materials also plans to build a plant in Texas to produce rare earth magnets. Rare earth magnets are critical in everything from smartphones to electric vehicles to military hardware.

In addition to negotiating with the European Union, the U.S. government is also exploring a narrow trade agreement with Japan and Britain on key minerals, Bloomberg News reported on Feb. 11, the latest in U.S. efforts to counter China’s influence in key areas.

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