Breaking News
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

Exclusive: Pentagon halts rare earths funding program pending 'further research'

Commodities May 22, 2020 11:55AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. A view of the MP Materials rare earth open-pit mine in Mountain Pass
 
LYC
-3.94%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
REEMF
+10.50%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Ernest Scheyder

HOUSTON (Reuters) - The U.S. Department of Defense last month reversed its decision to fund two projects to process rare earth minerals for military weapons, one of which has controversial ties to China, according to a government document seen by Reuters and three sources familiar with the matter.

The Pentagon decision is a step backward for President Donald Trump's plan to redevelop the U.S. rare earths supply chain and reduce reliance on China, the world's largest producer of the strategic minerals used to build a range of weapons.

Australia's Lynas Corp (AX:LYC) and privately held U.S. firm MP Materials both said on April 22 they had been awarded funding by the Pentagon for rare earths separation facilities in Texas and California, respectively.

Reuters reported the same day that a Chinese company's minority stake in MP Materials, which owns the only U.S. rare earths mine, has prompted concerns from scientists at the U.S. Department of Energy.

Later that week, U.S. Senator Ted Cruz and five other senators sent a letter to the Pentagon pushing it to only fund U.S. rare earth projects.

On April 29, the Pentagon informed applicants that the decision had been "put on hold until further research can be conducted," according to a document seen by Reuters. Lynas confirmed the Pentagon's move in a statement on Friday.

MP Materials did not respond to requests for comment.

The document added that the Pentagon plans to move forward on the award once the additional research is complete. It was not clear what type of further research the military could conduct.

The U.S. military office overseeing the award said it is still under active solicitation and declined further comment. The Pentagon's headquarters did not respond to requests for comment.

The Pentagon award was designed to support processing of so-called heavy rare earths, a less-common type of the minerals used extensively in weapons.

The mines owned by Lynas in Australia and MP Materials in California have only minor concentrations of heavy rare earths, according to U.S. Geological Survey data, prompting some controversy when the two companies last month said they were chosen.

U.S. Senator Mike Enzi, a vocal supporter of a rare earths project in his home state of Wyoming being developed by Rare Element Resources Ltd (PK:REEMF) and who signed the senators' April letter, said he would prefer Pentagon funding go to U.S. mines that support a new U.S. rare earth supply chain.

Enzi had privately complained to the Pentagon last fall that it was difficult for companies to apply for the award and, once they did, that the application review process was not transparent, according to his spokeswoman. The Pentagon extended the deadline in an attempt to appease Enzi, though his home state's rare earth project was not chosen.

Lynas, the largest producer of rare earths outside China, aims to ship rare earths from its mine in Western Australia for final processing at the Texas facility.

Reuters has reported the Pentagon is also reviewing applications for other rare earth-related funding projects. Applicants have said they expect decisions in the coming months.

The amount awarded was not published by the U.S. government, though the funds were allocated for planning work for the construction of a facility to process the minerals.

Lynas, in a statement on Friday, said it would move forward on its project. It was not immediately clear if MP Materials plan to move forward on design work for its project.

Exclusive: Pentagon halts rare earths funding program pending 'further research'
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (4)
Kaveh Sun
Kaveh Sun May 22, 2020 10:20AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
They r tied to China. It is a right thing to stop the funding.
Silverbug 19
Silverbug 19 May 22, 2020 10:09AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Never wanted to develop, resource anything at home. Now we are going to pay for it.
David David
David9 May 22, 2020 10:03AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Looks like they found out this is not easy and the cost is too much to make it work. We can't produce cheap stuff here.
Kevin Avila
Kevin Avila May 22, 2020 9:57AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
A step backwards? At first maybe? With three leaps forward right after...
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email