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Taxpayers Are Backing An Effort To Break China’s Grip On Key Mineral Refining. It Isn’t Working

Reuters reports that taxpayers are funding U.S. government efforts to break China’s hold on rare-earth refining capacity, but efforts backed by the Department of Defense (DOD) have failed.

The Pentagon is investing millions of dollars to support ventures that facilitate U.S. rare earth refining, a critical energy security effort given that China controls 87% of the world’s refining capacity. I have spent tax dollars. according to to Reuters. China has strategically manipulated the rare earth extraction and refining market for the past several years to its advantage, pushing the United States until it manages to build the domestic production capacity needed to procure key components for devices such as smartphones and electric vehicles. puts them in a potentially vulnerable position. (EV) and fighter aircraft.

US-based rare earth mining company MP Materials received $35 million from the Department of Defense in February 2022 to help build a refinery facility for heavy rare earth minerals near its California mines. that’s all U.S. Rare Earth Mineral Mine, Pentagon Says press release. The project has so far failed due to the lingering effects of the pandemic and technical problems, with MP relying on Chinese refining to generate revenue, Reuters reported.

Reuters reports that MP plans to use the particular refinery to source raw materials for another battery plant under construction in Texas that will supply General Motors with batteries for its emerging EV product line. It plans to supply. MP’s second largest shareholder is a Chinese company called Shenghe Resources, the paper reported. (Related: ‘Unacceptable’: Republican Reps and Defense Experts Raise Red Flags on Pentagon’s Dependence on China for Critical Minerals)

“The (rare earth) commissioning process is a painstaking stop-and-start process,” MP CEO and largest shareholder Jim Lichinski told investors in May, according to Reuters. Stated. China took steps in July to restrict exports of key rare earth minerals to the United States amid rising tensions between China and the United States.

Australia-based Lynas Rare Earths and U.S.-based chemical company Blue Line were working with Trump administration officials to build a new refinery near San Antonio, Texas, in 2019, but defense The effort, partly funded by the Ministry of Internal Affairs, has since been derailed for some reason. Unknown, according to Reuters. Lynas also received $30.4 million in support from the Department of Defense in February 2021 to establish refining capabilities outside of China’s control. according to To the Department of Defense press release.

Reuters reports that Lynas plans to build other refineries along the Texas coastline, which will be facilitated by up to $258 million in Pentagon funding. The company also plans to open a new processing facility in Australia later this year, Reuters reports.

Neither the Pentagon nor Blue Line immediately responded to requests for comment. Lynas could not be reached for comment.

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