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The US Department of Defense is about to establish itself as the largest shareholder of MP Materials. A few hours ago has announced who will buy shares of this mining company for A value of 400 million dollars. And, in addition, it will provide additional 150 million to help this company Extract and process rare earths which contains its Mountain Pass site, which is in California, although it resides very close to the border with the Nevada state.
This mine is the only US site that contains some of the rare earths that are necessary to manufacture high -power industrial magnets, so it has become a very valuable strategic resource for the country led by Donald Trump. The US plan pursues Develop your own supply chain of rare earths with the purpose of eliminating any dependence on the global market of these chemical elements, which is controlled by China.
The entry of the Department of Defense in the MP Materials shareholders reflects with absolute how important this mine for the US is from the point of view of national security. What is not yet clear is if it contains the rare earth range and in the right amount to meet the needs of US companies. In any case, with its investment the Pentagon intends to ensure the supply of rare earths to manufacture High power magnets for military applications For at least ten years.
Why are rare earths so important to the US and its allies
On April 4, just 24 hours after Donald Trump announced the taxes that he was going to apply to the importation of most products from abroad, The administration led by Xi Jinping responded. And he did it forcefully. In early December 2024 He chose to prohibit The export of some critical minerals to the US, among which were three essential metals for the chips industry: Gallium, Germanio and Antimony.
Shortly after the Chinese government added two more critical metals to its list of export restrictions: the Scandio and the Disposio. These chemical elements are probably less known than metals prohibited by China previously, such as Gallium or Germanio, but are at least as important as the latter because They have a fundamental role In the industries of integrated circuits, telecommunications and the manufacture of storage devices.
Chinese authorities are retaining in ports throughout the country not only rare earths, but also high -power magnets
The ability to put pressure from China had not yet been extinguished. Just ten days later, on April 14, the Administration did not hesitate take another step forward With the purpose of putting in check, in addition to the industries that I just mentioned, those of electric cars, aeronautics and advanced armament. To achieve this, it effectively suspended, in addition to the export of the most valuable rare earths, that of high -power magnets that have a critical role in the industries that I have cited in this same paragraph.
The Chinese authorities are retaining in the ports throughout the country not only the rare earths, but also the high -power magnets acquired by the electric cars manufacturers of the entire planet, the aerospace companies, the chip factories and Armament companies. Many of these organizations have high -power magnet reserves made with rare earths, but possibly only allow them to subsist a few months.
Europe in particular is in an extremely delicate position. China’s export controls are directed mainly to the US, but the old continent It does not remain unscathed. At least for the moment. In fact, in Germany, which as we all know is the heart of the European car industry, There are already experts who assure that if China continues to retain rare earths and electric motors some essential parts of the electric cars production chain will stop in a few weeks. For the European car industry this blow would be very difficult to fit.
European companies that are dedicated to the manufacture of semiconductors are also in a very compromised situation. According to Reuters Many European chip production lines They will stop very soon Due to the shortage of crucial supplies, which has led the European Chamber of Commerce to meet with officials of the Ministry of Commerce of China to ask them to allow rare earth supply to European companies that are dedicated to the production of integrated circuits.
Image | The Pentagon
More information | The Washington Post
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