A couple of hours outside Houston, in a remote field near a Dow Chemical Co. plant, America’s bid to undercut China’s grip on the global supply of rare earth minerals critical to high technology has yet to break ground.
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Even when it does, China’s dominance of the market – it controls about 70 per cent of output and more than 90 per cent of refining – means that goal is likely to remain out of reach.
The Texas plant, to be built by Australia-based Lynas Rare Earths Ltd., represents a fraction of billions of dollars in subsidies and loans promised for the production and refining of the minerals in the US and its key allies. For the 149-acre (60 hectares) site, Lynas won more than US$300 million in Pentagon contracts. If all goes to plan, it will be operating a plant to process rare earths there in two years.
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But while national security is a primary driver of the programmes in the US and elsewhere, a slump in prices since 2022 is undermining the business case for those projects. That’s raising questions about whether this and similar efforts can develop into a supply chain to rival Chinese firms protected by their government.
“These market conditions have now destroyed most of the hoped-for projects from just a couple [of] years back,” said James Litinsky, the CEO of MP Materials Corp., which owns the only rare earths mine in the US and is building a factory to manufacture magnets in Texas.