Biden Announces $35 Million Investment in Domestic Rare Earth Elements Supply Chain

The Defense Department will award $35 million to MP Materials, a rare earth elements facility in Mountain Pass, Calif., the president said on Tuesday.

In the midst of an uncertain future for America’s increasingly unstable relationship with Russia and China, some of the world’s largest exporters of rare-earth minerals, President Biden on Tuesday announced a multi-million dollar investment in a California-based rare earth facility, with the aim of creating a fully domestic supply chain for the magnets that power vehicle motors, wind turbines and more.  

Serving as the building blocks for modern technology, rare earth elements, such as lithium and cobalt, are critical components in everything from household appliances to computers to aircraft to electric vehicles. Unfortunately, the bulk of America’s supply of these critical minerals is imported. China produces around 90% of the world’s supply of rare earth elements.  

That’s what makes Tuesday’s announcement important. The Defense Department will invest $35 million into MP Materials, and the company’s Mountain Pass, Calif., facility will use the award to establish a full end-to-end domestic permanent magnet supply chain. In turn, MP Materials committed to investing an additional $700 million and creating more than 350 jobs by 2024.

The investment comes nearly a year after Biden’s executive order mandating a supply chain review with a special focus on semiconductor and electric-vehicle batteries. Unsurprisingly, the assessment revealed America’s over-reliance on imports for critical minerals and materials from foreign nations and adversaries, posing serious national and economic threats.

“When it comes to clean energy, China has spent several years cornering the market on many of the materials that power the technologies that we rely on,” Biden said. “That’s why I committed us to build a clean energy supply chain stamped, ‘Made in America.’ ‘Made in America’ means using products, parts and materials as well as minerals right here… It means betting on American workers, and it takes a federal government that doesn’t just give lip-service to buying America but actually takes action.”

As the United States works to realize a clean energy future, a robust domestic supply chain of rare earth elements will only become more urgent. Global demand for the minerals are projected to surge by 400 to 600% over the coming decades, according to an International Energy Agency report.

America’s auto manufacturers are charging full speed ahead in the development of a nascent electric vehicle industry, but success may well be stymied by supply shortages, like the recent semiconductor crisis, without a strong rare earths domestic supply chain.

“If [the development sponsored by the Biden administration’s investment in MP Materials is] as big as it appears to be, this is a gamechanger in terms of our efforts to transition to low-carbon green growth and to radically change the way we produce and consume energy, and this is a hinge moment in the history that you’re making not just here today, but the work you’ve been doing the last year,” California Gov. Gavin Newsom said during the event.

Domestic mines like MP Materials’ are an essential part of America’s success in the race to lead the global clean energy market, but the path to success is far from easy.

“One thing I’ve learned, Mr. President, is that American manufacturing spirit is second to none when we all work together, but the truth is that multi-billion-dollar supply chains do not move overnight,” MP Materials CEO James Litinsky. “It’s going to require capital. It’s going to require perseverance. It’s going to require strong coordination between the upstream and the downstream. And, most importantly it’s going to require a true commitment from leadership across the board.”

During Tuesday’s virtual event, the Biden administration also spotlighted the employment and environmental stewardship opportunities that mines like MP Materials’ present.

“These new investments will do more than create good paying jobs,” Biden said. “They’re also going to set America up to lead the world in building a clean energy economy and a clean energy future. As we build the economy, we’re going to build it around working Americans. That means making sure that labor is at the table, that tribes and the people from the community are at the table from day one and that environmental protections are paramount. We have to ensure that these resources actually benefit folks in the communities where they live, not just the shareholders. And that’s going to create good paying union jobs and that produces more sustainability, so we can avoid the historical injustices that too many mining operations left behind in American towns.”

Ahead of Biden’s virtual event, the Department of Interior announced a new interagency working group that will focus on reforming mining laws, regulations and permitting policies “to promote the sustainable and responsible production of critical minerals.”