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Officials are discussing using the Defense Production Act to tap financing, loans and other means for rare earths element-related projects, including mining, processing and other downstream technologies to bolster the US's capability to build a domestic supply chain, the people said. A specific course of action or a timeline have yet to be finalized, the people said.
MP Materials Corp., the sole domestic producer of rare earths, would be a prime beneficiary. Deputy Defense Secretary Steve Feinberg is working to line up funding for the company, people familiar with that matter said. The Nevada-based mineral processor has received millions in funding from the Defense Department.
MP Materials rose as much as 17% to $29.96 at 3:45 pm in New York, the highest on an intraday level since March 14.
A spokesman for MP Materials declined to comment. Representatives for the White House and the Pentagon didn't immediately respond to requests for comment.
Defense Secretary Pete Hegseth in a congressional hearing this week said that MP Materials 'is a great example of a place where we can partner with industry' and that Feinberg is focused on sourcing rare earth supply.
The US currently lacks the so-called mine-to-magnet capability at scale, and invoking the emergency authority will give the Defense Department and other agencies tools to speed up sourcing that severely lags China's dominance in the industry. The urgency has only increased since Beijing flexed its rare earths capacity as leverage in trade talks with Washington over the past month.
Beijing's decision to block exports of rare earths focused Trump administration attention on China's dominance in processing the materials used in semiconductors, jet engines and other technology, and it's stoked a surge of interest in rapidly developing US supply chains.
'This is a wake-up call for America,' Interior Secretary and National Energy Dominance Council Chairman Doug Burgum told Bloomberg News in a June 1 interview. 'We are so exposed, right now — precariously exposed — to China's grip on not just the mining, but the processing. They're mining all over the world, but they control 85% of the processing.'
An existing US stockpile is 'massively insufficient' Burgum said, adding that billions of dollars could be needed to build a bigger mineral reserve.
The latest discussions come more than two months after President Donald Trump signed an executive order to boost production of critical minerals that encouraged faster permitting for mining and processing projects.
White House Efforts
While that order encompassed rare earths, one of the people familiar with the matter said issuing a new directive is essentially a chance for Trump to publicly message that he's countering Beijing on a US vulnerability that's inflamed trade tensions between the world's largest economies.
At the National Energy Dominance Council, David Copley is leading work on the rare-earths issue and has been tasked with coordinating most efforts related to critical minerals, people familiar with the matter said.
Copley, a former executive with the mining company Newmont Corp., has been receiving proposals for how the US can quickly build out its own critical minerals supply chains and lists of potential shovel-ready projects the government can quickly invest in through DPA and other funding avenues.
Copley's role has taken on new prominence as a result of Elon Musk's efforts to downsize the federal bureaucracy that have led to a wave of buyouts, resignations and retirements at key federal offices working on supply chain issues.
The Trump administration revived Biden-era efforts to create a domestic supply chain for rare-earth magnets after China in April clamped down on exports of the materials, Bloomberg News reported last week.
As part of the effort, officials solicited proposals to bolster domestic supplies of the magnets within the next six to 12 months as pressure mounted that China's recent retaliation was putting serious pressure on the Pentagon's stockpiles, as well as the inventories of US automakers and some aerospace-related companies.
--With assistance from Courtney McBride, Yvonne Yue Li and Jeran Wittenstein.
(Updates to add share moves in the fourth paragraph)
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