America’s only rare-earths producer has agreed a deal to ship output from its new processing plant to Japan, as part of a broader move by the United States and allies to reduce China’s role in their critical supply chains.
MP Materials, owner of the Mountain Pass mine in California, will sell material from its separation unit direct to trading giant Sumitomo for distribution in Japan. The mine’s output has typically gone to China for processing, with Japanese companies purchasing from there.
The agreement will "stabilize, diversify, and strengthen a supply chain of critical importance to Japan’s manufacturing sector,” the U.S. and Japanese companies said in a joint statement. The companies gave no details about volumes or timing.
Mountain Pass has emerged as a flagship operation for the U.S. push to reshape flows of critical minerals. It accounted for about 15% of the world’s mined rare earths supply in 2021, and U.S. President Joe Biden last year signed off on $35 million in extra funding for its push beyond just mining.
The U.S. is spearheading a drive to reduce China’s stranglehold over flows of minerals deemed to be of strategic importance. For rare earths, China hosts some 85% of global refining capacity, according to the White House.
As well as the separation plant, MP Materials is also planning a factory in Texas to make rare-earth magnets, which are vital in everything from smartphones to electric vehicles and military hardware.
The U.S. government is exploring narrowly-focused trade pacts on critical minerals with Japan and the United Kingdom, in addition to talks with the European Union — the latest salvo in its push to counter Chinese influence in key sectors, according to an earlier report.