US mulls REE price floor to lift output: Reuters

[Ben Graham]

United States government officials are ready to guarantee critical minerals producers a minimum price for their product in a bid to raise domestic output and reduce China’s market dominance, Reuters reported, citing unidentified people familiar with the matter.

The strategy would build on a recent public-private partnership between the US Department of Defense and MP Materials (NYSE: MP) to establish a domestic supply chain for rare earth magnets. The deal – announced July 10 – included a 10-year off-take deal that sets a price floor of $110 per kilogram for neodymium-praseodymium materials.

In a previously unreported July 24 meeting, US trade advisor Peter Navarro and National Security Council official David Copley told representatives of 10 rare earths producers – plus tech giants Apple, Microsoft and Corning, which rely on critical minerals to make their products – that the deal with MP Materials was “not a one-off” and that similar agreements were also in the works, Reuters said.

Apple invests $500M in Pentagon-backed MP Materials

China’s decision in April to restrict exports of rare earths highlighted US vulnerabilities and intensified calls in Washington for a more resilient industrial base.

Sole US producer

MP Materials is the only domestic producer of rare earth elements – vital components for the making of smartphones, jet engines, electric vehicles and defence systems.

Other companies taking part in last week’s meeting included rare earths refiner Phoenix Tailings; Momentum Technologies, which developed a battery and magnet recycling system; and Vulcan Elements, Reuters said.

President Donald Trump is keen to expand US rare earths output in a manner replicating the speed of Operation Warp Speed, the pandemic-era strategy that helped scientists develop the Covid-19 vaccine in less than a year, Reuters added.

Navarro confirmed the meeting to the news agency, adding that the Trump Administration aims to move as fast as efficiently possible to address perceived vulnerabilities in the US critical minerals industry. He didn’t say whether the price floor was mentioned during the meeting, according to Reuters.