The U.S. Department of Defense (DoD) has awarded a $35 million contract to MP Materials Corp. to design and build a facility to process heavy rare earth elements at the company’s Mountain Pass Mine in California.

The contract is part of the Industrial Base Analysis and Sustainment Program that will support the construction of a commercial scale processing facility for heavy rare earth elements (HREE) at Mountain Pass.

On Feb. 22, the Biden administration actions taken by both the federal government and private industry that it says will bolster the critical mineral supply chain.

According to a White House fact sheet in addition to the contract from the DoD, MP Materials will invest $700 million in the magnet supply chain, creating 350 jobs by 2024.

HREEs have higher atomic weights and are generally less abundant than light rare earth elements (LREEs), MP Materials said in a statement. HREEs are essential inputs to many critical defense and commercial technologies, particularly permanent magnets instrumental to the performance of electric vehicles, wind turbines, drones, and missile systems. In a separate contract awarded in December 2020, the DoD committed $9.6 million to MP Materials’ Stage II optimization, a project underway to restore LREE processing capabilities to Mountain Pass. The ability to process HREEs alongside LREEs will enable MP Materials to extract and refine all rare earths required to manufacture high-performance permanent magnets. It will also enable the company to recycle all recoverable rare earths from end-of-life magnets and magnet production scrap, increasing the resiliency and environmental sustainability of the domestic supply base.

“The ability to mine, process, and refine rare earths at Mountain Pass is foundational to a national effort to secure the U.S. rare earth supply chain,” said MP Materials Chairman and CEO, James Litinsky. “We thank the Department of Defense for its confidence and support.”

In addition to its mining and processing operation at Mountain Pass, MP Materials is developing a rare earth metal, alloy and magnet manufacturing facility in Fort Worth, TX. Materials sourced from Mountain Pass will be transformed into manufactured products at this new facility, restoring a wholly domestic and vertically integrated U.S. magnetics supply chain. In December 2021, MP Materials entered into a long-term agreement with General Motors to supply U.S.-sourced and manufactured rare earth materials, alloy, and finished magnets for the electric motors.

“The U.S. needs to continue to push the scientific envelope to develop secure, reliable, and affordable domestic source critical minerals used in defense and commercial manufacturing in order to reduce its dependence on foreign sources in a time of global economic competition,” said Deborah Rosenblum who is performing the duties of Assistant Secretary of Defense for Industrial Base Policy.
In addition to the funding for MP Materials, the Interior Department is expected to launch an interagency group pursuing “legislative and regulatory reform of mine permitting and oversight.”

The Hill reported that the department will also update its list of critical minerals. Meanwhile, other agencies are expected to tout portions of the bipartisan infrastructure law, like the Energy Department, which was given $3 billion for battery recycling facilities and refining battery materials including lithium, cobalt, nickel and graphite.

The administration sought to frame its push as both a boost to sustainability, as well as lessening the nation’s dependence on China, which is a major producer of some minerals.

“As the world transitions to a clean energy economy, global demand for these critical minerals is set to skyrocket by 400-600 percent over the next several decades,” the fact sheet said.

“The U.S. is increasingly dependent on foreign sources for many of the processed versions of these minerals,” it added, particularly referencing China’s dominance on materials like lithium and cobalt.