President Biden on Tuesday outlined plans to ramp up domestic mining, saying U.S. tech industries are too dependent on China for cobalt, lithium and other critical rare earth minerals.
Mr. Biden said the industrial-based arm of the Defense Department will award $35 million to MP Materials to separate and process heavy rare earth elements at its facility in Mountain Pass, California — one year after the White House ordered a review of ways to promote homegrown projects to compete with Beijing.
MP Materials, a mining company, is also investing $700 million to create 350 jobs in the sector developing permanent magnets, which are used in electric-vehicle motors, defense systems, electronics and wind turbines.
“To build a truly strong economy we need a future that’s made in America,” Mr. Biden told California Gov. Gavin Newsom, a Democrat, and other guests in a virtual meeting at the White House. “China has spent several years cornering the market on many of the materials that power technologies we rely on.”
China controls up to 85% of the world’s rare earth oxides and about 90% of rare earth metals alloys, and permanent magnets, according to the Center for Strategic and International Studies.
Mr. Biden’s announcement came as U.S. allies in Europe learned a hard lesson this week about depending on adversaries to power their economies.
Germany responded to the Russian invasion of Ukraine by halting the Nord Stream 2 gas pipeline project.
The pipeline would have doubled the flow of Russian gas to Germany and eased soaring energy costs for European customers. The situation is offering a real life example of what happens when a country becomes overly reliant on a rival.
“Welcome to a new world where Europeans will soon pay 2,000 euros for a thousand cubic meters of gas!” tweeted former Russian President Dmitry Medvedev, who is deputy chairman of the Security Council of Russia.
The Biden administration expects demand for critical minerals, meanwhile, to jump by 400% to 600% and by 6,000% for minerals used in electric vehicles, specifically, over the next several decades.
“China controls most of the global market in these minerals,” Mr. Biden said. “The fact is we can’t build a future that’s made in America if we ourselves are dependent on China.”
China has significant rare earth deposits like the U.S., Canada and others, though Chinese state-owned companies also partner with foreign firms that do the “dirty work” of mining and extraction elsewhere before production and refinement is performed in China, said Chris J. Dolan, a political science and global studies professor at Lebanon Valley College.
China controls 101 of the 136 lithium battery plants and, while it does not have much of its own cobalt, the Chinese own eight of the 14 cobalt mines in the Democratic Republic of Congo.
“China knows very well that mining rare earths is tricky business, and also the backbone of advanced technologies,” Mr. Dolan said. “The U.S. sat back and did little to nothing over the course of Republican and Democratic administrations to counterbalance this. Biden is now playing catch-up.”
China’s control of minerals and the Russia-Ukraine crisis underscore the consequences and trade-offs involved in maintaining relations with China and Russia.
“The West is in a race with these two maligned actors who pledged ‘no limits’ to their partnership. If any U.S. ally trades in dual-use technologies based on rare earths with China and/or Russia, then the U.S. cannot tolerate that,” Mr. Dolan said, referring to technology that can be used for both peaceful and military aims.
“NATO members need to make a choice between the U.S. or Russia and China on these issues because rare earths will determine who wins the competition of emerging and disruptive technologies,” he said, citing examples like artificial intelligence, quantum computing, batteries, electric vehicles and hypersonic weapons.
Besides the MP Materials investment, the White House highlighted these projects Tuesday:
• Berkshire Hathaway Energy Renewables (BHE Renewables) said it will break ground this spring on a project in Imperial County, California, to test the commercial viability of their sustainable lithium extraction process. The plan is to produce battery-grade lithium hydroxide and lithium carbonate by 2026.
• Redwood Materials is pushing a pilot program with Ford and Volvo to collect and recycle end-of-life lithium-ion batteries at Nevada-based facilities.
• Energy Secretary Jennifer Granholm outlined how a $140 million project funded by bipartisan infrastructure law will recover rare earth elements and critical minerals from coal ash and other mine waste, reducing the need for new mining. Also, she said $3 million in infrastructure funding will be invested in refining battery materials such as lithium, cobalt, nickel and graphite.
Yet the U.S. may have fumbled a chance to secure minerals in Afghanistan last year, even as China looks to cash in.
A 2010 Department of Defense report priced Afghanistan’s untapped mineral wealth — which includes copper, iron, gold and lithium — at roughly $1 trillion. In 2019, an Afghan government official estimated the value as high as $3 trillion.
While the U.S. raced to evacuate citizens and debate recognition of the Taliban government, China opened talks with the Taliban to gain access to the mineral mines.
• Jeff Mordock contributed to this report.