The United States government has invested $ 400 million in MP materials, a rare company of land mining. Interests criticize this step, and compare it to China’s approach to market control.
The United States government faces a violent reaction to investing $ 400 million in a rare local land company. Investment includes guaranteeing prices, which almost doubles the market price, which raises concerns about market abnormalities.
The rare land deal raises fears
Critics of the US Department of Defense claim to invest $ 400 million in MP materials, which is the only rare land mining company in the country, that this step is similar to China’s intervention style and can distort the global market for rare ground elements.
The deal was announced last week, making the Pentagon the largest contributor to MP materials. It also guarantees the price of the price that lasted for a decade for the company’s main product for NDPR, which is $ 110 per kilogram, or nearly twice the current market price is about $ 60.
The United States government has committed to buying about 7,000 tons of magnets annually from MP. The company will also stop selling to its best former customer, Shenghe Resources, a Chinese company that is still a shareholder of the minority.
The Trump administration believes that this intervention is a necessary step in breaking America’s dependence on rare Chinese land supply chains and promoting local production.
Fears of distorting the market will not disappear
One of the biggest concerns about this deal is the impact of the guaranteed basic floor on the competition. By adhering to paying $ 110/kg for NDPR, the Pentagon created what some critics call an artificial market, allowing MP materials to work with a large financial pillow.
David Abraham, a former White House professor and the current subordinate professor at the University of Boys State, indicated that the United States government is now playing a major role in the NDPR market, which is relatively small. He described the size of the deal as “strange” and perhaps destabilizing.
The level of government intervention reflects a kind of control over the usual prices in China. She added that the price floor may allow MP to reduce competitors in the commercial market, the company is protected from real market pressure.
A former Pentagon official agreed, indicating that MP can “reduce commercial tenders” with little financial risks.
Although MP materials have not yet started to produce magnets on a large scale, potential production of 7,000 tons for a decade has led to criticism.
Despite fears, the deal is supported in Washington. The legislators support the agreement, and considered it a step to secure local supply chains.
This step indicates a shift in the Pentagon strategy.
He said: “Leaders with commercial backgrounds are looking for new ways to get results.”
The Ministry of Defense official supported the approach, describing it as a solution designed for the challenges of building a rare sustainable ground industry. The official said: “We have chosen a unique model that balances national security needs with the risks of the commercially dominated market,” the official said.
Main difference wire: Secret encryption projects for the tool are used to obtain guaranteed media coverage
Source: https://www.cryptopolitan.com/us-gvernment-reare-eart-china-comparison/