This week, two rare agricultural remediation companies announced a new joint venture intended to establish a rare ore processing plant in Hondo, Texas.
Lynas Corp., an Australian rare-earth processor, and Blue Line Corp., a Texas-based chemical company, agreed on a partnership to "see US companies still access rare earth products by offering an American ̵[ads1]1; based source. "
Rare earth minerals are found in consumer electronics, military equipment, electric vehicles, windmills and solar panels. China sees rare earth metals as a potential wedge in today's trade negotiations with the United States, because it mines and treats the majority of the rare earths used throughout the world.
Although a Lynas / Blue Line processing plant in Texas could reduce some of the threats associated with China's grip on the rare earth sector, such a plant will probably take a while to recover.
Currently, the only rare earth mine in the United States is in Calypso, Calif. However, Trump management tariffs, designed to protect US miners from competition with cheap Chinese commodities, have actually damaged Mountain Pass because the primary ore processing plants are in China. Mountain Pass must send its ore to China to be processed, open it up to receive Chinese tariffs. According to the Wall Street Journal, Mountain Pass currently pays a 10 percent tariff on rare ore shipments to China, and on June 1, it will increase to 25 percent.
Lynas is one of the largest rare earth miners and processors outside China. However, it has a controversial environmental track record at its processing plant in Malaysia (the country is reluctantly plant licensing renewal conditional on Lynas removing radioactive waste that has accumulated there). In addition, rare earth treatment is generally a rather toxic and resource-intensive experiment. This suggests that a key factor for the Hondo plant to actually realize will be whether the two companies can comply with US environmental standards while keeping the treated minerals less expensive than imported rare earths.
If the Hondo plant is moving forward, the companies expect it to be "the only major manufacturer of discrete medium and heavy rare earth products outside China." The plant will focus on separating dysprosium and terbium, rather than light rare earth products such as neodymium and praseodymium, which are treated at Lynas & # 39; Malaysia plant.