The United States government is set to become the largest shareholder in the country’s only active rare earths mine, located in Mountain Pass, California. This marks a significant move to secure critical mineral resources necessary for modern technologies such as electric vehicles, wind turbines, and defense systems. The US is taking several steps to ensure the long-term viability and independence of this strategic resource, highlighting the growing geopolitical and economic importance of rare earth elements.
Decade-Long Deal Secures Rare Earth Prices, Reduces Risk of Chinese Dependence
MP Materials, the company that owns the Mountain Pass mine, has entered into a decade-long agreement with the US Department of Defense. Under this arrangement, the government will guarantee a minimum purchase price of $110 per kilogram for two key rare earth elements—neodymium and praseodymium.
These metals are vital for manufacturing permanent magnets used in essential devices ranging from smartphones to electric motors. The guaranteed pricing is intended to protect the domestic supply chain from foreign market manipulation and economic pressure, especially from China.
U.S. Becomes Top Shareholder in Rare Earth Mine to Cut China Ties and Secure Tech FutureThis initiative comes amid ongoing tensions with China, which dominates global rare earth production and refining, controlling approximately 90% of the refining capacity. Historically, MP Materials sold its output to Shenghe Resources, a Chinese company that also held a significant ownership stake.
However, due to escalating tariffs between the US and China—some reaching up to 145%—MP Materials decided to halt exports to China, aligning its operations more closely with US national interests and reducing dependency on foreign refining capabilities.
$400 Million Boost for New Refining Facility to Ensure Rare Earth Independence
To further strengthen domestic production, MP Materials plans to construct a new US-based facility capable of refining the mined rare earth materials into commercially and militarily usable products. The precise location has not yet been determined, but the plant will cater to both defense and commercial needs.
This effort will be backed financially through a $400 million investment by the Department of Defense in newly issued shares, underlining the federal government’s commitment to reshaping the rare earth supply chain within the US.
Rare earth elements remain central to the broader US-China trade conflict, with both nations leveraging tariffs and export controls as strategic tools. Despite recent trade talks aiming to ease restrictions, the US has criticized China for the slow implementation of agreements.
Meanwhile, the European Union has also expressed frustration over China’s export policies, pushing for the faster rollout of its own Critical Raw Materials Act. As global reliance on rare earths continues to grow, the US is betting on self-sufficiency to fuel its economic and manufacturing ambitions, particularly under the renewed Trump administration.
