The only operating rare earths mine in the U.S. – and once the world’s biggest — is caught up in the crossfire of the Trump administration’s trade war with China.
Rare earths, an esoteric group of materials used in everything from Tesla Inc. automobiles to high-tech military equipment, were dropped this week from the U.S.’s final $200 billion catalog of tariffs on Chinese goods, but China didn’t reciprocate on its own hit list.
For MP Mine Operations LLC, the U.S. consortium that owns the Mountain Pass mine in California, that’s a problem because it ships semi-processed output for refining in China, which plans a 10-percent tariff on these imports, rising to 25 percent next year.
“The ten-percent tariffs provide a real challenge, and the prospect of 25 percent is daunting,” James Litinsky, chief executive officer of JHL Capital Group LLC, the majority owner of the Mountain Pass consortium, said by email. “We believe that we can compete without tariffs, and we don’t understand why there would be tariffs on us, when there are no tariffs on Chinese producers.”
The rare earths trade between the world’s top two economies is largely one-way, with America reliant on China for about 80 percent of its supply, according to the U.S. Geological Survey.
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