US-Japan alliance with MP Materials to fight China on rare earths
MP Materials, the only company that mines rare earths in the United States, will sell its metals directly to Japan without going through China. Washington wants to reduce its dependence on Beijing on critical raw materials, and is considering mini-trade deals. All the details
MP Materials, the only producer of rare earths in the United States, announced Wednesday a deal with Japanese conglomerate Sumitomo that symbolizes America's and its allies' attempt to reduce dependence on China for strategically important raw materials.
Rare earths are a group of seventeen metallic elements used to make electronic devices, electric cars, wind turbines and weapon systems. 85 percent of the world's refining capacity for these metals, indispensable for their industrial use, is located in China.
THE AGREEMENT BETWEEN MP MATERIALS AND SUMITOMO
MP Materials owns the only rare earth mine in the US, at Mountain Pass in California. However, since he does not have the capacity to process the raw material, he has to ship it to China to be refined.
However, the company wants to open a rare earth separation plant in California, and has recently made an agreement with Sumitomo to send it the materials processed in the plant (once it is operational), so that the conglomerate can distribute them directly in Japan. no longer having to depend on China. To date, in fact, Japanese companies buy the rare earths extracted by MP Materials from Chinese refiners.
In the joint press release, MP Materials and Sumitomo do not provide details on the volumes covered by the agreement or even on the timing. However, they declare that their agreement will make it possible to "stabilise, diversify and strengthen a supply chain of crucial importance for the Japanese manufacturing sector".
MP MATERIALS (GOVERNMENT FUNDED) PLANS ON RARE EARTHS IN THE UNITED STATES
The document describes the Mountain Pass mine as "the largest source of rare earth production in the Western Hemisphere": in 2021 it alone accounted for 15 percent of the rare earths mined in the world. Given its strategic importance, in 2022 the US Department of Defense awarded MP Materials a $35 million contract to build a rare earth processing plant in Mountain Pass, to boost the domestic supply chain and reduce the exposure to China.
In addition to the Mountain Pass plant, MP Materials' plans also include a factory in Texas dedicated to the manufacture of rare earth magnets: they are present in smartphones, electric vehicles and military devices.
THE USA SEEKS TO AGREE WITH THE EU, UK AND JAPAN
The US government is negotiating with the European Union, the UK and Japan for trade deals limited to critical minerals: rare earths, cobalt and lithium, to name a few. The purpose of this critical minerals buyers club (as a Bloomberg source called it) or "NATO of metals" (because Washington's allied countries are members of it) is to counter Beijing's influence on the ecological transition supply chains.
– Read also: Australia too is preparing for the new NATO of metals
The United States has already formed an alliance on critical minerals – called the Minerals Security Partnership – with some politically related countries, such as the European Union, Canada, the United Kingdom, Australia and South Korea. The group met in early February to discuss the extraction, refining and recycling of these materials with representatives of several African governments .
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/terre-rare-accordo-mp-materials-sumitomo/ on Fri, 24 Feb 2023 08:03:30 +0000.