US Companies Ramp Up Domestic Production of Critical Minerals for Defense

• The US military's reliance on China for critical minerals has become a pressing concern due to renewed fighting with Iran.
• The Pentagon has backed several companies, including Phoenix Tailings, to ramp up domestic production of critical minerals.
• Industry experts warn that it will take years for companies across the sector to build new mines and boost production of high-powered magnets.
• The US defense sector is particularly reliant on critical minerals such as samarium and neodymium, which play an outsized role in defense systems.

A $150 million weapons system won’t work if it’s missing critical minerals that may be worth only $20,000 to $30,000.

The US military's reliance on China for critical minerals has become a pressing concern, particularly in the wake of renewed fighting with Iran. The conflict has dug into the already diminished stockpiles of advanced missile interceptors, prompting the White House to demand that military contractors speed up production and adhere to stricter rules banning sourcing from China.

The Pentagon has backed several companies, including Phoenix Tailings, which recently received a $500 million loan to ramp up its work. The company's refinery in New Hampshire uses electricity to extract critical minerals from mining waste, aiming to help the US break China's chokehold on processing these essential materials.

While progress is being made, industry experts warn that it will take years for companies across the sector to build new mines and boost production of high-powered magnets. Extracting hard-to-pronounce elements from existing mine waste can help satisfy growing demand in the meantime, but several companies will need to contribute to this effort.

The US defense sector is particularly reliant on critical minerals such as samarium and neodymium, which play an outsized role in defense systems. However, the country's capacity to produce these metals is severely limited, with Phoenix Tailings being one of the few companies capable of producing the final metal.

The company's chief commercial officer, Anthony Balladon, notes that a $150 million weapons system won't function without critical minerals worth only $20,000 to $30,000. He emphasizes the need for regular audits and supply chain risk assessments to ensure compliance with regulations banning sourcing from China.

As the US seeks to reduce its reliance on China in processing critical minerals, it will be essential to address the complex web of dependencies within the supply chain.

The renewed focus on domestic production of critical minerals has significant implications for the US defense sector. By reducing its dependence on China, the country can mitigate the risks associated with a vulnerable supply chain and ensure the free flow of essential materials.

Phoenix Tailings' plans to build a bigger facility to extract and produce critical metals needed in not only defense but also the aerospace and automotive industries demonstrate the potential for domestic production to benefit multiple sectors. The company's goal of 120-ton capacity is ambitious, but it highlights the need for increased investment in domestic production facilities.

Ultimately, the success of this effort will depend on the ability of companies like Phoenix Tailings to scale up their operations while adhering to regulations and ensuring compliance with industry standards.

The renewed focus on domestic production of critical minerals may lead to increased scrutiny of military contractors' compliance with regulations banning sourcing from China, highlighting the importance of regular audits and supply chain risk assessments for companies operating in this sector.

Source: Original reporting via Associated Press