Biden seeks to boost rare earth element extraction in U.S.

Lithium mine

President Joe Biden announced the U.S. will give $35 million to MP Materials Corp. to process heavy rare earth elements at a facility in Southern California as part of a bigger push to challenge foreign dominance in a critical field.

The U.S. has lagged far behind countries like China and Canada in extracting lithium, cobalt, and rare-earth elements that are crucial to the manufacture of modern electronics. Officials say that dependence on foreign trade has created national security and economic vulnerabilities.

“This isn’t anti-China or anything else,” Biden said at a White House event Tuesday. “This is pro-America.”

Last year, Biden signed an executive order to strengthen American supply chains, including for semiconductors and rare earths. He said the government review of vulnerabilities showed dependence on China and other nations for materials necessary to make everything from household appliances to wind turbines in the U.S.

Results of a one-year supply chain study, conducted by various government agencies, are expected later this week.

Tuesday’s announcement comes amid a drive by the White House to shore up supply chains and domestic manufacturing, including on semiconductors. Shortages and bottlenecks during the coronavirus pandemic have crippled manufacturing in key industries and driven inflation to its highest level since the early 1980s.

Biden said the investment in rare earth elements is needed to ensure the creation of high paying union jobs and provide materials to produce clean energy.

“We know that when the federal government invests in innovation, it powers up the private sector to do what they do best,” he said.

Las Vegas-based MP Materials said it will invest an additional $700 million and create more than 350 jobs in the magnet supply chain by 2024, the White House said. The aim is to establish for the first time a full domestic supply chain for permanent magnets, a key component of motors for electric vehicles, wind turbines and missile guidance systems.

The president also said Berkshire Hathaway Energy Co. would build a new facility near the U.S-Mexico border to test the viability of a new sustainable lithium extraction process. If successful, the company could accelerate efforts to harvest lithium from the Imperial Valley, which holds large deposits of a key component of advanced batteries and electronics.

© 2022 Bloomberg L.P.

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