U.S. Boosts Rare Earths Production to Counter China’s Grip

The US government is making huge investments in domestic rare soil production to reduce dependence on China, whose global mining is 90% and 90% in refinement. Due to being a rare soil significant for electric vehicles, wind turbines and defense technology, this step will help to overcome business stress and supply chain risks.

U.S. boosts rare earth production at Mountain Pass mine.

Key Developments

• Major Investment: Defense Department (DOD) is investing $ 400 million in the MP Materials of America's sole rare soil mine in the Mountain pass in California, so that the government became the largest shareholder with 15% stake Will be

• Price Guarantee: The 10-year Defense Department contract MP Materials ensures the price of minimum $ 110 per kg for neodymium and praseodymium (NDPR), which is the key elements for magnets in smartphones, EV and military devices.

• New Facilities: MP Materials will build a new magnet in America and build a rare earth separation feature, which will get a financing of $ 1 billion, whose goal is to create a completely domestic supply chain by the end of 2025.

U.S.-China Trade Tensions

• China's Export Control: In April 2025, China banned the export of seven rare soil elements and magnets by citing tariff up to 145%. Only 25% export licenses have been approved, due to which the US supply chains have been disrupted.

• Progress of business negotiations: In May 2025, the US tariff under 30% and Chinese tariff decreased by 10%. In June, the framework of resume in the talks in London was fixed, but the US officials reported slow implementation.

• Strategic Makeover: MP Materials stopped shipment to China for refining due to high tariff, so that the rare soil was coordinated with American national interests to process at home.

Why Rare Earths Are Critical

Rare soil elements like NDPR and SERIM are important for the following:

• Defense: F-35 jet (900 pounds), submarine (9,200 lbs), and destroyer (5,200 lbs).

• Technology: EV, wind turbine, smartphone and MRI The scanner.

• Global Competitiveness: China's dominance based on subsidy has been carried out by the competitors, due to which the US and European countries have inspired action.

What’s Next?

• Domestic Development: The target of MP Materials is to produce 1,000 tonnes of NDFEB magnets per year until 2025, which will increase to 3,000 tonnes, although it is a fraction of China's 2018 production (138,000 tonnes).

• Global Alliance: America is partnering with Australia, Brazil and Saudi Arabia to diversify the supply. Europe is also implementing its important raw material act faster.

• Challenges: The interval of environmental concerns and technical expertise can slow progress, while the fully integrated American supply chain has been set up by 2027.

The Bigger Picture

Investment Department indicates an adventure step for the freedom of supply chain under Trump Administration. Domestic production is important for the safety of the US technical and defense areas, with the continuation of trade negotiations and continuing the control of China.