U.S. Senators Markwayne Mullin (R-OK) and Catherine Cortez Masto (D-NV) introduced legislation to strengthen the domestic supply chain for rare-earth magnets, which are critical components of cell phones, computers, defense systems, and electric vehicles but are almost exclusively made in China. This legislation will help build the U.S. supply chain for these minerals by creating a tax credit for companies processing these rare earth oxides and manufacturing the magnets necessary to power American technology.
China controls 90% of the world’s manufacturing of these materials into magnets, which are critical to national defense and the U.S. economy. Last year, the Department of Commerce released a report warning that overreliance on China threatened U.S. national security and recommended passage of this bill.
“There is no reason for the United States to remain largely dependent on China for rare-earth minerals we have under our feet,” said Senator Mullin. “American energy independence brings global stabilization, and that starts with strengthening the domestic supply chain. Thank you to Senator Cortez Masto for joining me on this legislation.”
“We can’t keep relying on China for components we need to power our defense systems and drive our clean-energy economy,” said Senator Cortez Masto. “Over 600 Nevadans already work in the rare-earth mining industry, and my commonsense legislation will help build a domestic supply chain for the recycling and manufacturing of rare-earth magnets, protecting our national security and creating thousands more jobs right here in the U.S.”
“Mining and processing rare earths domestically is important, but that alone still leaves our supply chain vulnerable. American industry must convert these essential materials into the permanent magnets that are utilized in components across our economy, including for national security applications,” said James Litinsky, Chairman and CEO of MP Materials. “This bipartisan legislation is a crucial step towards leveling the competitive playing field. It will catalyze private investment to address the very critical gap in our supply chain that previous policies have overlooked.”
The Rare Earth Magnet Production Tax Credit Act would provide a $20 per kilogram production tax credit for magnets that are manufactured in the U.S. and increase the credit to $30 per kilogram for magnets manufactured in the U.S. whose components are produced, recycled, or reclaimed domestically. Companion legislation introduced in the U.S. House of Representatives by Congressmen Guy Reschenthaler (R-Penn.-14) and Eric Swalwell (D-Calif.-15) was included in the House Select Committee on China’s report on how to counter the influence of the Chinese Communist Party.
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