About a decade after he purchased a shuttered rare earths mine that was, actually, partially underwater, MP Materials CEO James Litinsky has reworked his enterprise into a pivotal participant in America’s nationwide safety.
Since taking on the rare earth trade from the United States in the Nineties, China has dominated the whole provide chain. That consists of the mining, processing and particularly the making of super-powered magnets utilizing these elemental metals, that are important parts inside smartphones, robotics, fighter jets and drones. When President Trump enacted his tariff plans in April 2025, China responded by limiting gross sales of some rare earth components and magnets to the U.S. – and requiring firms to file detailed disclosures for a way they might be used.
“As it stands today, we need permission from the Chinese government to make things. We need permission from the Chinese government to make military things,” Litinsky stated. “The practical reality is, that is not an acceptable condition.”
What are rare earths and the place are they in the U.S.
Despite the identify, rare earths aren’t rare; what’s truly rare are websites with excessive sufficient concentrations of rare earths, and accessible sufficient areas, to make extraction worthwhile. In all, there are 17 rare earth components, each an elemental steel on the periodic desk.
These usually are not well-known metals like iron, copper and aluminum. There’s europium, which enhanced the shade purple in early tv units, and neodymium, which strengthens and miniaturizes magnets. These so-called “rare earth permanent magnets” are used in all the things from high-speed rail and electrical automobiles to the tiny motors that make iPhones buzz, in response to Julie Klinger, a professor of environmental research at the University of Wisconsin-Madison and a rare earths professional.
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“The thing that distinguishes rare earth elements are their fantastic magnetic, conductive and optical properties,” Klinger stated. “So they’re used often the way you might use spices in cooking, because if you add just a little bit of a certain rare earth element, say, to a magnet, that enables that magnet to be both very small and very powerful.”
Geologists discovered rare earths at Mountain Pass, California, in 1949. By the 60s, particular person rare earths have been being mined, separated and utilized. Mountain Pass was thought of the world’s major rare earth mine for many years.
But the course of finally moved offshore as a result of China might do it cheaper.
“It’s a dirty business. It’s a risky business,” Klinger stated. “It’s a difficult business to really break even.”
Mountain Pass fell sufferer to globalization, and additionally to U.S. environmental regulators in the Nineties after low ranges of radioactive water and residue leaked into the Mojave Desert. The mine languished for a decade till a new firm, Molycorp, tried, unsuccessfully, to compete with China and revive the enterprise. Molycorp filed for chapter in 2015.
What China’s rare earth dominance means for the U.S.
Right now, China holds a near-monopoly over the strategic metals that go into so-called rare earth everlasting magnets, key parts in a lot that makes the fashionable world go, in response to Secretary of the Interior Doug Burgum. But, he added, China hasn’t simply cornered the market.
“They also weaponize it, because if anybody in the rest of the free world said, ‘Hey, we’re going to start mining and we’re going to start refining,’ then they would target that particular mineral, dump a quantity onto the market, drive the price down. And companies, including U.S. companies that were profitable, suddenly became unprofitable,” Burgum stated.
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At the second, “well north of 90%” of the world’s rare earth magnets are made in China, MP Materials CEO James Litinsky stated.
Last April, Mr. Trump unveiled his international tariffs plan on what he referred to as Liberation Day. China retaliated to devastating impact, briefly choking off rare earths to the U.S.; Ford Motor Company, all of a sudden with out a dependable supply of magnets, needed to pause manufacturing on Explorer SUVs. After a collection of commerce truces, China resumed sending rare earth magnets to the U.S., with sure restrictions.
In November, after reaching a take care of China, Mr. Trump told 60 Minutes China had been “very strongly threatening” the U.S. with its management over rare earths.
The present U.S.-China commerce truce is set to expire in eight months. Absent a new deal, the nation’s rare earth provide, no less than in the short-term, stays weak.
As a part of the nationwide technique to counter China’s rare earths’ dominance, senior Trump administration officers summoned Litinsky and Michael Rosenthal, the males operating America’s solely lively rare earth mine, and who have been then constructing a rare earth everlasting magnet manufacturing facility, to Washington in April 2025.
Reviving the U.S. rare earth trade
Litinsky acquired his begin in rare earths a decade ago. He was operating a Chicago hedge fund when he noticed a 60 Minutes report on rare earths, which helped inform his consciousness of the mine at Mountain Pass and China’s dominance of the trade. Then, whereas searching for worth in distressed firms, Litinsky heard about Molycorp — the firm that had unsuccessfully tried to revive Mountain Pass — struggling, and finally submitting for chapter. He wound up proudly owning the mine and refinery and turned to Rosenthal, a good friend who additionally labored in hedge funds to assist restart it
When they took cost in 2017, it was underwater, financially and actually: China had flooded the rare earth market driving down costs, and 30 million gallons of groundwater had pooled at the backside of the mine, forcing it to close down regardless of the reality Molycorp had invested $2 billion upgrading the website and making it extra environmentally-friendly.
There have been solely eight staff when Litinsky and Rosenthal launched MP Materials. Today, there are greater than 700 staff, simply at Mountain Pass.
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The mining is the simple half, Rosenthal stated. The onerous half is separating the rare earths from the rock, and then from one another.
In 2023, MP reached a milestone: After investing almost a billion {dollars} extra into the website, it was in a position to refine neodymium and praseodymium to 99.9% purity.
But MP Materials wanted one final hyperlink to bypass China and safe the full provide chain: the capability to fabricate their ultimate product, these high-powered rare earth magnets so essential to the fashionable world. So, in Fort Worth, Texas, they constructed a facility the place pure rare earth oxide from Mountain Pass will get melted, cooled, compressed, diced and finally become magnets. This meant MP was the solely firm, wherever, to regulate the whole rare earth magnet provide chain, from mine to magnet, which means independence from Beijing. They hope to quickly be producing a million magnets a day as they scale up. Litinsky says their first buyer, General Motors, will start utilizing rare earth magnets from MP Materials in automobiles later this 12 months.
A name from Washington
But final spring issues weren’t so rosy. After Mr. Trump introduced tariffs in April 2025, main producers and the U.S. authorities discovered themselves confronting China because it restricted the movement of rare earths and supermagnets. As the house owners of America’s solely “one-stop” rare earth mine, refinery, and magnet-making firm, Litinsky and Rosenthal have been referred to as to the Pentagon.
“The Pentagon wanted a Manhattan-style project to accelerate the entire supply chain of rare earth magnetics in the country,” Litinsky stated.
Litinsky and Rosenthal have been requested to scale up all the things as rapidly as doable, and an unusual deal was brokered. The Pentagon agreed to inject $400 million into MP Materials (plus one other $150 million to develop a refinery to course of so-called “heavy” rare earths) and the U.S. authorities took a 15% possession stake. Critically, the deal got here with a assured 10-year worth flooring for MP’s rare earth oxide, $110,000 a kilogram, and promised to make up the distinction to the firm if costs drop beneath that. So, even when China tries to flood the market once more, MP is coated. If rare earth oxide costs rise above that flooring, the U.S. authorities shares the income.
The authorities additionally requested MP Materials to ramp up rare earth magnet manufacturing, tenfold. To do it, Litinsky is constructing an excellent greater rare earth magnet factory in Northvale, Texas. The firm says it might produce sufficient to satisfy the nation’s most important rare earth magnet wants. That plant, additionally in Texas and referred to as “10X,” is anticipated to be full by 2028.
Burgum, who’s been a vocal supporter of public-private partnerships and reviving U.S. industrial coverage, defends the MP deal, even when it strays from strict rules of market capitalism.
“I’d certainly call it pragmatism,” Burgum stated, “because free markets work, but they don’t work if you have an adversary that controls a monopoly that control[s] the prices.”
