U.S. Army to invest in rare earths industry
U.S. Army to fund rare earths plant for weapons development: Report
According to Reuters, the U.S. Army plans to fund the construction of rare earths processing facilities as part of Washington's urgent efforts to secure domestic supplies of minerals used to make military weapons and electronics..
The move would mark the first financial investment by the American military in the industrial production of rare earths since the first atomic bomb was created by the Manhattan Project during World War II..
This comes after President Donald Trump earlier this year ordered the military to upgrade the supply chain for rare materials, indicating that dependence on other countries for strategic minerals could hinder U.S. defenses..
China, the world leader in the processing of most of the rare earths, has threatened to stop exporting specialized minerals to the United States, using its monopoly as a "cudgels" in the ongoing trade conflict between the world's two largest economies.
«US rare earths industry needs substantial help to compete with the Chinese», – said Jim McKenzie, CEO of UCore Rare Metals Inc, which is developing a rare earths project in Alaska. «This is not only about money, but also about comprehensive broad support from Washington.».
Last month, the Army's munitions oversight unit approached the miners with a request for the cost of a pilot plant for the production of so-called heavy rare earth elements, a rare type of specialized mineral that is in high demand for use in weapons, according to a document provided Reuters.
Replies must be received by December 16, 2019. Expected respondents include UCore, Texas Mineral Resources Corp and a joint venture between Lynas Corp and privately held Blue Line Corp, according to company officials and sources familiar with the matter..
The US Army has said it will fund up to two-thirds of refining costs and at least one project. Potentially, possibly more. Applicants must provide a detailed business plan and indicate the location where they will mine the ore, among other factors.
This recent move by the Army, a division of the Pentagon, follows a military survey earlier this year on the state of the U.S. rare earths supply chain..
Rare earth tensions between the United States and China date back to at least 2010, when China limited its exports to Japan following diplomatic disagreements that spurred prices of niche metals and raised concerns in the US Army about whether that China can do the same to the United States.
US Army Combat Development Center and US Army Headquarters did not respond to requests for comment.
The request does not specify the exact amount that the army could fund, although it is based in part on the Defense Manufacturing Act (DPA), a 1950s American law that gives the Pentagon ample financial capacity to purchase equipment needed for national defense..
Experts say a pilot plant for processing rare earths can cost anywhere from $ 5 to $ 20 million, depending on location, size and other factors, with a full-scale plant could cost over $ 100 million..
«It's nice to see the interest in the financial support of the industry from the Ministry of Defense», – said John Blumenthal, CEO of Blue Line Corp, which earlier this year signed a memorandum of understanding to build a Texas-based rare earths processing plant with Australia-based Lynas Corp.
It is not entirely clear how the Army will assess the respondents' responses, given that most of the experience in the rare earths industry is now in China, although the modern rare earth industry itself originated in the United States decades ago..
«Rather than providing funding for another research, it will provide money to build a supply chain for rare earths in the United States.», – said Anthony Marchese, CEO of Texas Mineral Resources, which develops the Round Top mine in Texas jointly with USA Rare Earth.
However, after processing, rare earth elements must be turned into rare earth magnets, which can be found in high-precision missiles, smart bombs and military aircraft, and China also controls the production of rare earth magnets..
The Pentagon has not yet started funding the production of magnets in the country..
«Bridging the magnetic gap would do more to meet the country's defense needs as well as the needs of electric vehicle manufacturers and others.», – said Ryan Castilla, managing director of research firm Adamas Intelligence, which closely monitors the rare earths industry.