Reports say Pentagon has halted rare earths funding program

May 22, 2020

According to reporting from Reuters, funding from the U.S. Department of Defense for two projects to process rare earth materials has been put on hold until further research is completed.

In April, Lynas Corp. of Australia and the privately held U.S. firm MP Materials said they had been awarded funding by the Pentagon for rare earths separation facilities in Texas and California, respectively.

However, a government document seen by Reuters and three sources familiar with the matter said that on April 29, one week after the initial reports of the funding, the Pentagon informed applicants that the decision had been “put on hold until further research can be conducted.”

The Pentagon decision is a step backward for President Donald Trump’s plan to redevelop the U.S. rare earths supply chain and reduce reliance on China, the world’s largest producer of the strategic minerals used to build a range of weapons.

Lynas confirmed the Pentagon’s move in a statement.

MP Materials did not respond to requests for comment.

The document added that the Pentagon plans to move forward on the award once the additional research is complete. It was not clear what type of further research the military could conduct.

The U.S. military office overseeing the award said it is still under active solicitation and declined further comment.

The mines owned by Lynas in Australia and MP Materials in California have only minor concentrations of heavy rare earths, according to U.S. Geological Survey data, prompting some controversy when the two companies last month said they were chosen.

U.S. Senator Mike Enzi, a vocal supporter of a rare earths project in his home state of Wyoming being developed by Rare Element Resources Ltd and who signed the senators’ April letter, said he would prefer Pentagon funding go to U.S. mines that support a new U.S. rare earth supply chain.

Enzi had privately complained to the Pentagon last fall that it was difficult for companies to apply for the award and, once they did, that the application review process was not transparent, according to his spokeswoman. The Pentagon extended the deadline in an attempt to appease Enzi, though his home state’s rare earth project was not chosen.

Lynas, the largest producer of rare earths outside China, aims to ship rare earths from its mine in Western Australia for final processing at the Texas facility.

 

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