Semiconductors, electric vehicles, 5G, fighter jets and magnets all require rare earth minerals for production. One American mining association is raising a red flag that China’s too involved in the industry, putting national security at risk.
"Minority ownership is one thing, controlling is what we certainly are concerned about," National Mining Association CEO Rich Nolan told FOX Business White House correspondent Edward Lawrence Friday. "What gives me greater pause is that the processing is happening overseas."
In February, President Biden announced from the White House briefing room that MP Materials was awarded a $35 million federal grant to produce critical rare earth minerals, start to finish, in the USA.
"China controls most of the global market of these minerals," Biden said, "and the fact that we can't build a future that's made in America if we ourselves are dependent on China for the materials that power the products of today and tomorrow."
Documents show that before going public, MP Materials had an exclusive contract with Shenghe Holding Company to have 100% of the rare earth mined in its California operation sent to China under its control. Today, the Chinese company still holds an 8% stake in MP Materials.
The CEO of the National Mining Association argued better investment is needed to make sure processing happens in this country.
"It needs to happen here," Nolan said. "I think MP Materials is trying to build that out. Other companies are trying to build that out. Certainly, the Defense Department is now tasked with building that out."
The White House responded to FOX Business' request for comment on the administration’s efforts to separate China from American-made operations stating: "It is well-known that China dominates the rare earth supply chain and market, from mining to value-added manufacturing of magnets. Breaking this cycle will require consistent and long-term engagement with the private sector to build a domestic industrial ecosystem surrounding rare earth mining and manufacturing."