US accelerates rare earth production race… "Called Apple & MS too"

Navarro, 'Trump's tariff strategist,' presides over rare earth meeting

Mentions incentives such as expanded minimum price guarantee measures and protective tariffs

MP Materials rare earth mine in California, USA [Reuters Yonhap News file photo. Re-sale and DB prohibited]

(Seoul=) Reporter Jeong Seong-ho = The Donald Trump administration in the United States has decided to expand minimum price guarantee measures for producers to counter China's dominance in the rare earth market, according to Reuters and Bloomberg on the 31st (local time).

Reuters reported, citing officials, that senior White House officials, including Peter Navarro, White House Adviser for Trade and Manufacturing, met with 10 rare earth and recycling companies on the 24th of last month and announced this.

Technology companies such as Apple and Microsoft (MS), which use rare earths in their electronic products, also attended the meeting.

Earlier, on the 15th of last month, there were reports that Apple had signed a rare earth magnet supply contract with US rare earth mining and processing company MP Materials.

The White House explained at the meeting that they are adopting an approach similar to the pandemic period to significantly increase domestic rare earth production by guaranteeing producers a minimum price, thereby curbing China's market dominance.

During his first term, President Trump ordered 'Operation Warp Speed' in 2020 to rapidly develop vaccines as COVID-19 spread uncontrollably, resulting in the development of vaccines in less than a year.

The pandemic-era approach mentioned by the White House is interpreted as an intention to introduce this speed race to building the rare earth supply chain.

Adviser Navarro said at the meeting that the Ministry of Defense's minimum price guarantee measure, which will be applied to MP Materials, is not a one-off and similar contracts are being pursued.

He also stated that they plan to aggressively promote increased domestic rare earth production using various incentives in addition to the minimum price guarantee.

He emphasized that the government is committed to creating an environment where the industry can be commercially fostered, including minimum prices and protective tariffs.

Peter Navarro, White House Adviser for Trade and Manufacturing [AP Yonhap News file photo. Re-sale and DB prohibited]

Previously, the US Department of Defense signed a contract to acquire a 15% stake (preferred stock) in MP Materials for $400 million (approximately 560 billion won), making it the largest shareholder, and agreed to guarantee a minimum price for the rare earths produced by the company.

This is interpreted as an intention to guarantee profitability by purchasing at a price nearly double the market price of Chinese rare earths.

Rare earth companies in the United States have consistently requested government price support measures, stating that it is difficult to make investments in rare earth mining profitable due to China's market dominance driven by price competitiveness.

Adviser Navarro acknowledged the holding of such a meeting in a statement on the 31st of last month, saying, "Our goal is to build our supply chain across the entire rare earth spectrum, from mine to finished product, and the companies gathered at the meeting have the potential to play a crucial role in these efforts."

He added that the US government aims to operate in 'Trump time,' achieving results as quickly as possible while maintaining efficiency.

At the meeting, participants also suggested banning the export of equipment containing rare earth magnets to promote the recycling of rare earths.

However, officials said that Adviser Navarro replied that such measures would only be pursued after the US rare earth industry has further developed, to avoid giving China leverage in the ongoing US-China trade war.

However, Adviser Navarro told Reuters, "All policy options are on the table."

The US government plans to continue meeting with rare earth-related companies every 4-6 weeks. Yonhap News