The hunt for U.S.-sourced rare earth elements is on. The industry got its start at the Mountain Pass mine in California. When I visited there nearly two decades ago, it was still kicking but sputtering under the weight of Chinese dominance in the space and costs driven up by U.S. environmental regulations. It declared bankruptcy around 2015 but had an influx of funding around 2017, with about 10 percent owned by China’s Shenghe Resources Holding Co. A significant base of its customers – nearly 90 percent – were also Chinese.
According to their website, “Mountain Pass has one of the world’s highest-grade deposits, averaging approximately 6.0-percent total rare earth oxides (TREO) over life-of-mine.” The ore is the mineral bastnaesite, housed in a 1.4 billion-year-old Precambrian carbonatite intrusion. If I remember the tour correctly, the bit of irony in the story is that Chinese geologists visited decades ago, recognized some features, and found their major deposits following that visit.
Putting the ‘Rare’ in REEs
The rare earth elements are a group of elements (“lanthanides”) from lanthanum to lutetium and are the top row of that pair of rows below the “rest” of the periodic table of elements. “Rare” earth is a bit of a misnomer, as the elements themselves are not actually that rare in the Earth’s crust. The rarity is in the concentration and quality required for commercial extraction and use. Global output of REEs in 2024 was just below 400,000 metric tons, with China producing 270,000 metric tons and the Unites States coming in a far second at 45,000 metric tons.
General Motors took an early step in 2021 when it announced a collaboration with MP Minerals to develop a U.S.-based supply chain for the rare earth magnets and other alloys needed to pump up its EV product lines. On July 10 this year, the Department of Defense purchased a 15-percent ownership in MP Minerals and agreed to a price floor of $110 per kilogram on two of the most popular REEs – nearly twice the going rate on the Chinese market. Such a floor is needed because of costs associated with environmental regulations, employee pay and other logistics surrounding mining in the United States. In addition to the GM investment and the DoD investment, MP is investing $600 million of its own capital to fund expansion projects that include a new rare earth magnet factory slated for 2028, set to improve the company’s output to 10,000 metric tons per year. The DoD is guaranteeing all of the offtake for the next 10 years.
“Any time you have government ownership, that’s a huge vote of confidence,” said Gracelin Baskaran, director of the critical minerals security program at the Center for Strategic and International Studies.
That vote of confidence only snowballed on July 15 when Apple announced a $500-million deal with MP Minerals to supply rare earth magnets for the company’s various product lines. Given the DoD floor at nearly twice the going rate from China, the switch is likely to increase – not reduce – costs, but it represents a fundamental shift in company policy from the most cost-effective supply chain to one with greater resiliency and reliability.
Chinese Competition
That shift was driven in no small part by China’s actions in March, when they halted all exports during a trade dispute with the United States. Last month, there were some signs that dispute might be easing, but there’s a recognition of an overall reluctance to rely mainly on single-sourced supply lines, especially when that single source is China.
“We’re in an era where executives are willing to pay a significant premium for a reliable supply chain. They don’t want stoppage,” added Baskaran.
In a bit of a cup game to keep up with Apple’s goal of ending its reliance on the mining industry, the magnets will be produced at MP’s Fort Worth, Texas facility using recycled materials from MP’s California mining complex.
A High-Stakes Hunt
Rare earth elements are the foundation of the tech revolution. They are used in smart phones, digital cameras, LEDs, magnets, batteries, defense technologies and more. They give color and have special optical properties that make them ideal for use as an additive and polish for many different kinds of glass and lenses. For example, lanthanum makes up as much as 50 percent of digital camera lenses, including cell phone cameras. Neodymium is a very strong magnet (sorry, magnetite), making the neodymium-iron-boron magnet a hot, and useful, commodity when space and weight are limiting factors, such as motors for EVs. They are also used in missile guidance systems, radar and night-vision equipment. Securing a reliable supply chain is of utmost importance, but it’s highly unlikely increased costs will not have trickle-down effects on consumers and taxpayers.
The shift to a domestic focus for rare earths is one that should excite geoscientists, because it means new avenues for exploration. MP is the only operational commercial rare earth mine in the United States, but these recent events could set the stage for that to change.
Accompanying this article is a map of domestic deposits from the US Geological Survey, with Wyoming’s Halleck Creek added. While MP’s mineral deposit is in carbonatite, Halleck is in a monzonite, and other U.S. projects have explored concentrating the elements when they’re found in coal seams. Wyoming has approved its first coal mine, Brook Mine outside Ranchester in northern Wyoming (close to the Bear Lodge Mountains on the map) in nearly 50 years to achieve this end. Most of the coal isn’t slated for burning as an electrical source but as raw materials for carbon fibers and REE source rock.