NOVEMBER 19, 2020 – As part of the U.S. government’s strategy to ensure secure and reliable supplies of critical minerals under Executive Order 13817, today the Department of Defense is announcing contracts and agreements with several rare earth element producers which will strengthen the domestic rare earths supply chain. Three of the awards were made under the authorities of Title III of the Defense Production Act (DPA).
MP Materials, who owns the largest rare earth element mining operation outside of China, has been awarded a DPA Title III technology investment agreement to establish domestic processing capabilities for light rare earth elements (LREE). LREEs are critical to numerous defense and commercial applications, including petroleum refining, glass additives, and magnets used in electric vehicle drivetrain motors and precision-guided munitions. Upon successful completion of this project, MP Materials will refine its current mixed rare earth concentrate production, which represents approximately 12 percent of global rare earth oxide content, into separated rare earth products at its site in Mountain Pass, California.
Under the technology investment agreement with MP Materials, the Department of Defense will contribute $9.6M to MP Materials’ effort to add value-add processing and separation capabilities to the Mountain Pass operations. MP Materials has recently announced a definitive agreement to transition to a publicly held company through a merger with Fortress Value Acquisition Corp, a special purpose acquisition company sponsored by an affiliate of Fortress Investment Group LLC.
The Department of Defense also signed DPA Title III agreements with TDA Magnetics of Rancho Dominguez, California and Urban Mining Company of San Marcos, Texas for rare earth element magnet supply chain studies and inventory demonstrations. The Department of Defense funding was $2.3M and $0.86M, respectively.
On Sept. 10, 2020, the Defense Logistics Agency (DLA) increased the scope of its Rare Earth Salts Rapid Innovation Fund (RIF) project to expand production to 20 tonnes per annum of neodymium praseodymium (NdPr). Under their RIF project, Rare Earth Salts has been scaling up capacity of their low capital and operating cost technology at their Beatrice, Nebraska facility. Rare Earth Salts made their first deliveries of high purity refined rare earth elements to an industry partner in 2020.
The DPA Title III awards follow a series of rare earth element actions the Department of Defense has taken in recent years to ensure supply and strengthen defense supply chains. Specific actions include stockpiling, implementing Defense Federal Acquisition Regulation Supplement (DFARS) rules to transition defense supply chains to non-Chinese sources of rare earth element magnets, launching engineering studies with the Industrial Base Analysis and Sustainment program focused on re-establishing domestic heavy rare earth element processing, partnering with industry to re-establish domestic neodymium iron boron magnet production, and leveraging the Small Business Innovative Research and Rapid Innovation Funds to accelerate development of new rare earth element processing technologies.