Biden administration announces plans to secure rare earth element supply chain

September 21, 2022

The Biden administration announced that it will implement recommendations from the Department of Commerce to secure the rare earth element supply chain. These efforts include bolstering domestic production throughout the supply chain, promoting demand for magnets produced in the United States, engaging with allies and partners on supply chain resilience, supporting the development of a skilled workforce and supporting research to mitigate supply chain vulnerabilities.

The administration decided against restricting imports of neodymium magnets that come primarily from China, the White House said. 

Politico reported that the decision to not restrict imports likely avoids a trade fight with China and others that export the magnets. The decision could also ease the concerns of U.S. automakers who rely on imports of magnets for finished products.

Biden’s decision is based on the results of a 270-day Commerce Department investigation which found that U.S. reliance on imports of the powerful magnets are a threat to U.S. national security and recommended a number of steps to increase domestic production.

Commerce’s suggestions included making investments in key segments of the magnet supply chain; incentivizing domestic production; working with allies and partners on supply chain resilience; supporting the development of a skilled workforce to produce neodymium magnets in the United States; and supporting ongoing research to mitigate supply chain vulnerabilities, the administration said.

“Today’s report affirms the single point-of-failure risk we face and the importance of MP Materials’ mission to restore the full rare earth supply chain to American shores. At Mountain Pass, our team is working urgently to create a sustainable supply base for all rare earth materials needed to produce magnets. And, in Fort Worth, we are expeditiously building a state-of-the-art facility to transform these materials into alloys and finished magnets. While it will take years to reinvigorate America’s industrial leadership, we are making steady and unwavering progress each day.”

The Biden administration already has used the Defense Production Act and other authorities to invest nearly $200 million with three companies — MP Materials, Lynas Rare Earths, and Noveon Magnetics — to increase the U.S. capacity to process rare earth elements, such as neodymium, and to boost U.S. production of neodymium magnets from current negligible levels.

“According to the Commerce Department’s findings, the efforts we’ve already taken, as well as the efforts that we’re directing coming out of this report, could lead to a significant decline in import penetration by 2026,” the senior administration official told Politico.

The administration expects that its efforts to boost U.S. production will reduce imports from China more than from the other suppliers, the senior administration official said.

U.S. automobile and wind tower manufacturers already rely heavily on the magnets, which GM helped develop in the early 1980s. However, demand for the magnets is expected to spike in the coming years, leading to a potential global shortage. That’s because electric vehicles use about 10 times as much of the magnets as conventional gasoline-powered cars.

Photo: MP Materials’ Mountain Pass Mine in California.


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