AUTONEWS

Trump Ignites A Fight Over Seabed Mining

In his first 100 days as president, Donald Trump’s executive orders have triggered no end of controversy and concern. One of his latest, aimed at encouraging and potentially mining valuable minerals from seabeds, puts the administration on a collision course with both environmentalists and other nations concerned about risks to aquatic life.

Trump’s April 24 order calls for “American dominance in offshore critical mineral resources,” not just within the country’s territorial waters but “beyond national jurisdiction.” The order calls on the National Oceanic and Atmospheric Administration to set up a process for issuing permits to companies and overseeing a plan to map seabeds where the concentration of valuable materials is likely to be the greatest.

Scientists and private companies have been studying the potential to harvest small rock-like nodules resting deep below the surface on the ocean floor because they contain high-value minerals including manganese, nickel, copper, zinc and cobalt–used in batteries, military hardware and advanced electronics. No company currently mines them, but startups like The Metals Company say they’re ready to. Most coastal nations joined the International Seabed Authority in the 1990s to determine if and how that might happen, but the U.S. isn’t part of that group.

The problem is those nodules, formed over millions of years, have laid undisturbed, serving as a home for sensitive forms of aquatic life. Removing them would destroy that unique environment and potentially create sediment plumes that are broadly harmful to sea life.

“Scientists agree that deep-sea mining is a deeply dangerous endeavor for our ocean and all of us who depend on it,” said Jeff Watters, a vice president with the Ocean Conservancy. “Areas of the U.S. seafloor where test mining took place over 50 years ago still haven’t fully recovered. The harm caused by deep-sea mining isn’t restricted to the ocean floor: it will impact the entire water column, top to bottom, and everyone and everything relying on it.”

And it’s not just environmentalists who don’t like Trump’s order. It “violates international law and harms the overall interests of the international community," said Guo Jiakun, a spokesman for China’s foreign ministry.

Trump’s obsession with critical minerals isn’t new and the seabed mining push is of a piece with his fixation on Greenland and Canada as additional suppliers of those resources. Meanwhile, many startups and materials companies think recycling, tapping existing resources and developing alternative materials are a faster, less controversial alternative to scraping up the sea floor.

Since China retaliated against President Trump’s tariffs by restricting exports of rare earth minerals — crucial to making the magnets that go into electric motors, used for cars, electronics, robots and wind turbines — MP Materials founder and CEO Jim Litinsky’s phone has been ringing off the hook from companies desperate for new suppliers.

“The sense of urgency, I've never seen anything like it,” he told Forbes. “It's pretty wild and exciting–and daunting.”

Litinsky runs the only U.S. rare earths mine, Mountain Pass in California’s Mojave Desert, supplying elements like neodymium and praseodymium that industries like defense, automotive and electronics rely on to build efficient electric motors. Once Litinsky’s staff of over 800 engineers, technicians and miners harvest the minerals from the earth, MP refines them, turning them into metals, which companies like General Motors need for EV motors. Starting this year, MP will also make high-powered magnets with those metals at a new plant in Texas, a market China currently dominates.

Ninety percent of all rare earth metals are processed in China. The country produces nearly 95% of all rare earth magnets–prized for their strength and long-term retention of magnetic properties–and virtually all of the 7,000 tons the U.S. imports each year came from China — a clear vulnerability in American companies’ supply chains that rely on them for their products. As Trump’s tariff war escalated, China on April 4 announced it was restricting U.S.-bound exports of “heavy” rare earths, shutting down imports of magnets made with them.

“The problem for almost every industry that uses a motor that requires magnets is that China has this massive strategic flex on rare earth minerals,” said a board member for a U.S.-based carmaker who asked not to be publicly named. “The stuff China just put export controls on is a freaking big deal. We won’t be able to make motors anymore or anything that has a spinning magnet in it. Game over.”

Startup Rivals...MP may have the only active rare earth mine, but it’s hardly the only U.S. firm angling to offset at-risk Chinese supplies. Noveon Magnetics, based in San Marcos, Texas, has also opened a factory to eventually make up to 2,000 tons of rare earth magnets, relying on a combination of scrap material, minerals imported from Australia and Southeast Asia and some recycled metals from recovered motors. USA Rare Earth is building a magnet plant in Stillwater, Oklahoma, that it hopes will one day produce up to 5,000 tons of magnets a year.

Meanwhile, Niron, a startup in Minneapolis, is trying to get rid of rare earths entirely by developing powerful magnets that use iron nitride, made with readily available and cheap raw materials.

For the moment, however, MP has an early lead. It will start shipping magnets to GM this year, Litinsky says, and it also has new supply contracts with two other automakers which it’s not yet naming but “are among the world’s five biggest.” Given that the company is exporting its NdPr metal to Japan and South Korea, those customers are likely Toyota and Hyundai (the carmakers declined to comment; Ford and Tesla, the country’s largest EV maker, also declined to comment on the impact of the rare earth restrictions).

In addition to cutting off rare earth magnet shipments, China explicitly identified “heavy” rare earths that would be restricted, including samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium. Trace amounts of those minerals are used for magnets but are also needed for a range of products including medical devices, lighting and military hardware.

MP’s mine has those minerals as well and it has “begun stockpiling concentrates of those ores,” said spokesman Matt Sloustcher.

It’s incredible timing for Litinksy.

“That's really been the vision of the company from the beginning, that a single point of failure in a supply chain is a major risk–and particularly a single point of failure that is a geopolitical adversary. It’s a national security risk,” he said. “This is exactly what we've been screaming from the rooftops about for a number of years.”

by: Alan Ohnsman