US has one rare earths mine. Chinese export limits spur push for more

Trump Tariffs on Rare Earths Cause Concern for U.S. Companies

By JOSH FUNK, AP Business Writer

OMAHA, Neb. (AP) — The impact of China’s response to President Donald Trump’s tariffs on rare earth minerals is being felt by America’s only rare earths mine. Companies are anxious as China has limited exports of these critical minerals used in military applications and high-tech devices.

According to Matt Sloustcher, a spokesperson for MP Materials, the company running the Mountain Pass mine in California, the immediate effects of the export restrictions are evident as they receive numerous phone calls from concerned parties.

The trade war between the U.S. and China could lead to a shortage of rare earth elements if China continues its export controls or expands them in trade negotiations. The California mine, although unable to meet all U.S. demand for rare earths, is working to increase processing capacity.

Tariffs Impacting Ore Supply and Costs

MP Materials has decided to halt sending its ore to China for processing due to the export restrictions and 125% tariffs imposed by China. The company plans to process nearly half of its mined ore on-site and store the rest while expanding processing capabilities.

Experts predict that manufacturers relying on rare earth elements will experience price increases, but global supply may be sufficient for the time being to keep factories running.

Rare earth elements are vital components in various products such as electric vehicles, smartphones, and fighter jets. While the California mine produces light rare earths like neodymium and praseodymium, heavy rare earths like terbium and dysprosium, crucial for certain applications, are in short supply due to China’s restrictions.

China’s dominance in the rare earths market poses challenges for the U.S., prompting efforts to develop new mines domestically. Trump’s executive order aims to streamline permit approvals for new mines and reduce dependence on Chinese supply.

China’s Market Power and U.S. Response

China, with its significant rare earths production and processing capacity, controls nearly 90% of the global market. The recent export restrictions from China have underscored the urgency for the U.S. to develop its rare earths resources.

Efforts are underway to establish new mines in Nebraska and Montana to enhance domestic production. Companies like NioCorp and U.S. Critical Materials are working towards this goal, supported by the government’s push for self-sufficiency in critical minerals.

While challenges lie ahead in reducing reliance on Chinese rare earths, U.S. companies are determined to secure a stable supply chain and protect national security interests.

Preparing for Price Increases and Future Developments

Manufacturers are bracing for price hikes as supply chain disruptions continue. Battery makers, in particular, may face shortages of key elements, impacting production costs.

As the U.S. aims to revitalize its rare earths mining industry, developments in Nebraska and Montana offer hope for increased domestic production. However, the road to self-sufficiency in rare earths remains a long-term endeavor.

Despite the challenges posed by China’s export controls, U.S. companies are adapting to ensure a stable supply of critical minerals for various industries.

Originally Published: April 18, 2025 at 12:01 PM MDT