US Rare Earths Supply Chain Momentum Builds with Federal Support and Project Milestones

The US is stepping up efforts to reduce its reliance on China for rare earth elements, with landmark deals and federal support signaling a decisive shift towards building domestic supply chains for critical minerals. The Pentagon finalized a multibillion-dollar equity deal with MP Materials, becoming the largest shareholder in the only major US producer of rare earth elements. The White House signaled its intent to expand price support mechanisms for US rare earth producers. Several emerging companies also reported progress in building a self-sufficient US rare earths industry.

The United States is intensifying its efforts to decrease its dependence on China for rare earth elements (REEs) through strategic deals and federal support. The Pentagon has finalized a multibillion-dollar equity agreement with MP Materials, making it the largest shareholder in the only major US producer of REEs. Simultaneously, the White House has indicated plans to expand price support mechanisms for domestic REE producers, signaling a significant shift towards building self-sufficient supply chains for critical minerals.

On July 10, 2025, the Pentagon announced a "transformational public-private partnership" with MP Materials, a vertically integrated company capable of mining, processing, and manufacturing REEs and magnets. The agreement includes a $400 million equity investment, making the Department of Defense (DOD) MP Materials' largest shareholder with a 15% stake. The investment aims to bolster the domestic supply chain for REEs, crucial for energy and defense applications [3].

China's dominance in the REE market, controlling 77% of global production, has underscored the US's vulnerability. The Pentagon's move follows a meeting on July 24, 2025, where officials discussed potential price floors for REE producers. This strategy aims to increase domestic output and counter China's market dominance [2].

MP Materials, headquartered in Las Vegas, operates the only active rare earth mine in the US. The company's Mountain Pass Mine in California is the second-largest rare earth mine globally. The Pentagon's investment is part of a broader effort to onshore the critical minerals supply chain, reducing dependence on foreign sources [3].

The White House's plans to expand price support mechanisms for US REE producers reflect a growing recognition of the strategic importance of these minerals. The US is exploring various initiatives to promote a more resilient industrial base, including the Resilient Resource Reserve proposal to kickstart domestic investment in the critical minerals processing sector [3].

Several emerging companies have also reported progress in building a self-sufficient US REE industry. Momentum Technologies, Phoenix Tailings, and Vulcan Elements, among others, are contributing to this effort by developing recycling systems and exploring new mining technologies [2].

The US's strategic shift towards domestic REE production is driven by the need to secure critical minerals essential for technological advancements, clean energy, and national security. By reducing dependence on China and diversifying its supply chains, the US aims to strengthen its economic and industrial resilience.

References:
[1] https://economictimes.indiatimes.com/opinion/et-commentary/indias-critical-minerals-push-gathers-steam/articleshow/123044938.cms
[2] https://www.mining.com/us-mulls-ree-price-floor-to-lift-output-reuters/
[3] https://bipartisanpolicy.org/blog/dod-bets-big-on-rare-earth-elements/