American Rare Earths gets leg up as US finds new ways to beat China
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The US is so determined to be completely free from its reliance on China for its rare earths that it is now researching ways of using microscopic bugs to extract more of the critical minerals from domestic sources to help secure the nation’s military capabilities.
This is just one in a long line of initiatives the US is rolling out to ensure it never again needs to turn to China for its rare earths, and it is another positive sign for emerging rare earths miners in the country, like American Rare Earths (ASX:ARR).
It also has an ESG advantage, in that “biomining” – as it’s termed – can be used to clean up sites polluted with metals. This means it could be a more environmentally and cost attractive option for US companies.
Rare earths are deemed critical minerals by the US because they are essential to manufacturing strategic products including electric motors, airplanes, and defence equipment.
Legislation is currently being considered to give US rare earth magnet makers tax breaks if they source their supply from domestic rare earths mines.
While the US is desperate to secure its rare earths supply chain, it won’t do it at any cost, with the government remaining steadfast in its strict stance against radioactive materials.
In many rare earths mines around the world, the same rocks that host the extremely valuable rare earths also often contain high concentrations of radioactive elements like uranium and thorium.
That’s where American Rare Earths La Paz project in Arizona is breaking the mould, so to speak, with much lower uranium and thorium grades than most other projects in the market and the lowest thorium levels of any US rare earths mine.
This is a big cost advantage for an emerging producer and is also viewed very favourably by US decision makers.
The La Paz project has already received the backing of government officials at not only a local level, but also a national level.
And American Rare Earths has further executed on its strategy of building scale in the US with the acquisition back in May of a project near the US’ only operating rare earths mine, Mountain Pass, in Nevada.
Mountain Pass is responsible for nearly 16% of global rare earths supply. The key product produced from the operation is NdPr (neodymium and praseodymium) — a critical component of permanent magnets used in electric vehicle motors and offshore wind turbines.
This is the same rare earth product American Rare Earths plans to produce and supply from the La Paz project.
EVs and wind turbine applications are expected to be major growth areas for NdPr supply.
This article was developed in collaboration with American Rare Earths, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.