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Old 01-28-2025, 02:13 AM
Sparty Sparty is offline
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Default What happened to the USA's Mountain Pass rare earths mine and processing?

I asked China's DeepSeek AI: What happened to the USA's Mountain Pass rare earths mine and processing?

Response:

The Mountain Pass Rare Earth Mine in California has a storied history and is central to the U.S. rare earth industry. Once the world's leading source of rare earth elements (REEs), it faced significant challenges in the late 20th and early 21st centuries but has since undergone a revival. Here's an overview of its journey:

1. Early Dominance (1950s–1980s)
Discovery and Development: Mountain Pass was discovered in 1949 and became operational in the 1950s. By the 1960s and 1970s, it was the largest producer of rare earths globally, supplying the majority of the world's rare earth elements.

Strategic Importance: The mine played a critical role in supporting U.S. technological and defense industries, providing materials for applications like color televisions, lasers, and missile guidance systems.

2. Decline (1990s–2000s)
Environmental and Regulatory Issues: In the 1990s, Mountain Pass faced significant environmental challenges. A series of wastewater spills and concerns over radioactive thorium byproducts led to regulatory scrutiny and legal battles. These issues damaged the mine's reputation and increased operational costs.

Competition from China: During the same period, China began ramping up its rare earth production, leveraging lower labor costs, lax environmental regulations, and state subsidies. By the early 2000s, China dominated the global rare earth market, driving prices down and making it difficult for Mountain Pass to compete.

Bankruptcy and Closure: In 2002, the mine's operator at the time, Molycorp, filed for bankruptcy. The mine ceased operations in 2002 and remained dormant for several years.

3. Revival (2010s–Present)
Molycorp's Relaunch: In 2010, Molycorp reopened Mountain Pass, spurred by rising rare earth prices and growing concerns about U.S. dependence on Chinese rare earths. The company invested heavily in modernizing the facility and improving environmental practices.

Financial Struggles and Second Bankruptcy: Despite the initial optimism, Molycorp faced financial difficulties due to falling rare earth prices and high debt levels. In 2015, the company filed for bankruptcy again, and Mountain Pass was put up for sale.

Acquisition by MP Materials: In 2017, a consortium led by MP Materials acquired Mountain Pass. MP Materials has since revitalized the mine, focusing on cost efficiency, environmental sustainability, and strategic partnerships.

4. Current Status (2020s)
Leading U.S. Rare Earth Producer: Today, Mountain Pass is the only active rare earth mine in the U.S. and one of the largest producers outside of China. It supplies about 15% of the world's rare earths, primarily in the form of rare earth concentrates.

Downstream Processing Challenges: While Mountain Pass has successfully resumed mining and initial processing, it still ships its concentrates to China for separation and refining. This highlights the U.S.'s continued reliance on China for downstream processing capabilities.

Strategic Partnerships: MP Materials has formed partnerships with U.S. government agencies and private companies to develop domestic rare earth processing capabilities. For example:

In 2020, the U.S. Department of Defense awarded MP Materials funding to build a rare earth separation facility in the U.S.

The company has also partnered with General Motors to supply rare earth materials for electric vehicle motors.

Environmental Improvements: MP Materials has invested in sustainable practices, including recycling water and reducing waste, to address past environmental concerns.

5. Future Prospects
Domestic Supply Chain Goals: The U.S. government and private sector are working to reduce reliance on China by developing a complete domestic rare earth supply chain. Mountain Pass is central to these efforts, with plans to expand into separation, refining, and magnet production.

Challenges Ahead: Despite progress, significant challenges remain, including high capital costs, technical complexities, and the need for skilled labor. Additionally, competition from China and other global players continues to exert pressure on prices and profitability.

Conclusion
Mountain Pass has undergone a remarkable transformation from its heyday as the world's leading rare earth producer to its decline and subsequent revival. Today, it is a key asset in the U.S. strategy to rebuild its rare earth supply chain and reduce dependence on China. However, achieving full supply chain independence will require significant investment, innovation, and collaboration across the public and private sectors. The mine's future success will depend on its ability to overcome technical, financial, and environmental challenges while remaining competitive in a global market dominated by China.

I then asked Anthropics' Claude AI: The Mountain Pass mine in California has had a complex history. Here are the key events:

Early History:
Discovered in 1949
Became the world's dominant rare earths producer in the 1960s-1980s
Originally operated by Molycorp


First Major Shutdown:
Closed in 2002 due to:

Environmental issues and spills
Chinese competition driving down prices
Environmental cleanup costs
Regulatory challenges



Molycorp Attempt (2010s):

Reopened in 2012 after Molycorp invested about $1.5 billion
Filed for bankruptcy in 2015 due to:

Low rare earth prices
Significant debt from modernization
Operational challenges

Current Operation (as of April 2024):

Owned and operated by MP Materials (NYSE: MP)
Mining and initial processing occurring at the site
Currently ships concentrated rare earth materials to China for final processing
Working on developing full vertical integration with domestic processing capabilities
Received support from U.S. government initiatives focused on securing domestic supply chains

Today's Market Cap : 28/01/2025 - US$3.52b

Lynas ASX: LYC A$6.09

 

Disclaimer: The author of this post, may or may not be a shareholder of any of the companies mentioned in this column. No company mentioned has sponsored or paid for this content.
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