The U.S. government is planning to fund domestic rare earths projects in an attempt to reduce its reliance on China, the global leader of the specialized sector.
Rare earths are a group of 17 minerals used in a plethora of military equipment and consumer electronics. There are no known substitutes. Apple Inc (AAPL.O), for instance, uses rare earths in its iPhone’s taptic engine, which makes the phone vibrate.
While the modern rare earths industry had its genesis in World War Two’s Manhattan Project to develop the atomic bomb, China has spent the last 30 years building a monopoly over the sector. Rare earths are no longer processed in the United States.
In an attempt to change that, the Pentagon last year said it would fund mines and processors via the Defense Production Act, which gives the military wide berth to procure certain equipment. U.S. President Donald Trump has recently considered using the same law to boost medical supply manufacturing.
Here are rare earths projects under development in the United States:
Energy Fuels Inc (UUUU.A)
The uranium producer said in early April it was considering ways to retool some of its equipment to process rare earths. The company does not plan to become a rare earths miner. Rather, it said it was looking at opportunities to process rock for others in order to extract the strategic minerals.
No final decision has been made, and Energy Fuels said it expects uranium to remain its main focus.
Lynas Corp (LYC.AX) and privately-held Blue Line Corp
Australia-based Lynas is largest producer of rare earths outside China. The company extracts rare earths from a mine in western Australia and ships the ore to Malaysia for processing, though its Malaysian operations have come under increased government scrutiny in recent years.
Lynas inked a deal with Blue Line in 2019 to build rare earths processing plants in Texas. Lynas will be the majority owner. The companies last December jointly applied for Pentagon funding for processing of so-called heavy rare earths, a less-common type of the specialized minerals that are highly sought after for use in weaponry, part of the reason why Lynas sought a U.S.-based partner.
On Wednesday, Lynas and Blue Line said they were chosen by the Pentagon, though they did not say how much funding they would get, nor did they list any conditions associated with the award.
The privately held company owns California’s Mountain Pass mine, the only rare earths mine in the United States. China’s Shenghe Resources Holding Co (600392.SS) owns about 10% of the company, and Chinese customers account for all its annual revenue of about $100 million.
MP Materials ships more than 50,000 tonnes of concentrated rare earths per year to China for processing. It is spending $200 million to restart mothballed equipment and aims to be processing at the mine site by the end of the year, though some industry analysts have said the goal may be overly optimistic.
Once the refining equipment does switch online, the goal is to use that material on site to make more than 5,000 tonnes per year of neodymium and praseodymium (NdPr), two of the 17 types of rare earths that are used to make magnets.
NioCorp Developments Ltd (NB.TO)
The company, led by former Molycorp executives, is developing the Elk Creek mine in Nebraska. The deposit will primarily produce niobium, which is used to harden steel and is not a rare earth. But it also will produce the rare earth scandium.
The company is in the process of obtaining permits and is looking for financing.
Rare Element Resources Ltd (REEMF.PK)
The company has been developing the Bear Lodge rare earths mine in Wyoming since 1999. In recent years, the company has run into delays in obtaining permits and faced other challenges, hindering its ability to secure financing.
Texas Mineral Resources Corp (TMRC.PK) and privately held USA Rare Earth
The companies are developing the Round Top rare earths project in the western corner of Texas and hope to have it operational by 2023. In the meantime, the partners are building a pilot plant in Colorado to process rare earths.
The companies hope to be producing small amounts of processed rare earths by the middle of 2020 – roughly 100 kg (220 pounds) annually. This would help them finalize supply deals with potential customers and secure financing for a full-scale plant near their Texas mine site.
UCore Rare Metals Inc (UCU.V)
The company is developing the Bokan mine in Alaska and building rare earths processing equipment. Alaska’s state government has pledged $145 million to support the project.
UCore has said it plans to focus first on building the processor and then develop the mine. The company teamed up with manufacturer Materion Corp (MTRN.N) to apply for Pentagon funding for the processing plant.
Materion has previously received financial support from the U.S. military to produce beryllium, a mineral used as a hardening agent for weapons. The beryllium production process has similarities to rare earths processing.