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A new Nature paper outlines the relationship between rising temperatures and the literal rotation of the Earth.
Thinking too hard about time is a little like thinking too hard about blinking; it seems natural and intuitive until suddenly you’re sweating and it makes no sense at all. At least, that’s how I felt when I came across an incredible new study published in Nature this afternoon by Duncan Agnew, a geophysicist at the Scripps Institution of Oceanography, suggesting that climate change might be affecting global timekeeping.
Our internationally agreed-upon clock, Coordinated Universal Time (UTC), consists of two components: the one you’re familiar with, which is the complete rotation of the Earth around its axis, as well as the average taken from 400 atomic clocks around the world. Since the 1970s, UTC has added 27 leap seconds at irregular intervals to keep pace with atomic clocks as the Earth’s rotation has gradually slowed. Then that rotation started to speed up in 2016; June 29, 2022, set a record for the planet’s shortest day, with the Earth completing a full rotation 1.59 milliseconds short of 24 hours. Timekeepers anticipated at that point that we’d need our first-ever negative leap second around 2026 to account for the acceleration.
But such a model doesn’t properly account for the transformative changes the planet is undergoing due to climate change — specifically, the billions of tons of ice melting from Greenland and Antarctica every year.
Using mathematical modeling, Agnew found that the melt-off, as measured by gravity-tracking satellites, has again decreased the Earth’s angular velocity to the extent that a negative leap second will actually be required three years later than estimates, in 2029.
While a second here or there might not seem like much on a cosmic scale, as Agnew explained to me, these kinds of discrepancies throw into question the entire idea of basing our time system on the physical position of the Earth. Even more mind-bogglingly, Agnew’s modeling makes the astonishing case that so long as it is, climate change will be “inextricably linked” to global timekeeping.
Confused? So was I, until Agnew talked me through his research. Our conversation has been edited and condensed for clarity.
How did you get involved in researching this? I’d never have expected there to be a relationship between climate change and timekeeping.
Pure accident. I’m a geophysicist and I have an avocational interest in timekeeping, so I know all about leap seconds and the history of atomic clocks. I thought about writing a paper figuring out statistically what the next century would bring in terms of leap seconds.
When I started working on the paper, I realized there was a signal that I needed to allow for, which was the change induced by melting ice — which has been studied, there are plenty of papers on this satellite gravity signal. But nobody has, as far as I can tell, related it to rotation. Mostly because, from a geophysical standpoint, that’s not very interesting.
Interesting. Or, well, I guess not interesting.
I mean, there is geophysical literature on this, but it’s largely, Okay, we see this signal, and gravity doesn’t mesh with what we think we know about ice melt. Does it measure what we think we know about sea level change? How does the geophysics all fit together? And the fact that it changes Earth’s rotation is kind of a side issue.
I did not know about this when I got started on this project; it appeared as I was working on it. I thought, “Wait, I need to allow for this.” And when I did, it produced the — I don’t want to use the words “more important” because of the climate change part, but it produced a secondary result, which was that this potential for a negative leap second became clear.
Walk me through how the ice melting at the poles changes the Earth’s rotation.
This is the part that’s easy to explain. Ice melts. A lot of water that used to be at the poles is now distributed all over the ocean. Some of it is close to the equator. The standard picture for what’s called change of angular velocity because of moment of inertia — ignore all the verbiage — but the standard picture is of an ice skater who is spinning. She has her arms over her head. When she puts her arms out, she will slow down — like the water going from the poles to the equator. And that’s it. This is the simple part of the problem.
So what’s the hard part?
The hard part is explaining the part about the Earth’s core. If you have two things that are connected to each other and rotating and one of them slows down, the other one has to speed up. I have not been able to think of an ice skater-like-metaphor to go with that, but the simple one is if you were to put a bowl of water on a lazy Susan and you spin the bowl, then the water will start to spin. It won’t spin initially, but then it will start.
If you started stirring the water in the other direction, that would slow the Lazy Susan down. And that’s the interaction between the core and the solid part of the Earth.
And is that causing the negative leap second to move back three years?
That’s why the leap second might happen at all. On a very long timescale, what’s happening is that the tides are slowing the Earth down. The Earth being slower than an atomic clock means that you need a positive leap second every so often. That was the case in 1972, when they started using leap seconds. The assumption was that the Earth would just keep slowing down and so there would be more positive leap seconds over time.
Instead, the Earth has sped up, entirely because of the core, and that’s not something that people necessarily anticipated. When you take the effect of melting ice out, it becomes clear there’s this steady deceleration of the core; the core is rotating more and more slowly. If you extrapolate that — which is a somewhat risky thing to do, you can’t really predict what the core is going to do — then you discover that there is a leap second, in 2029. The ice melting is going in the other direction; if the ice melting hadn’t occurred, then the leap second would come even earlier. Is this all making sense?
I think I’m grasping it.
Just so you know, one of the two reviewers of this paper was someone in geophysics who said, “I know all this stuff. I wasn’t familiar with the rotation part. This paper has an awful lot of moving parts.”
So, it’s just a difference of a second. Why does this even matter?
We are all familiar with the problem of not being synchronized — we just went through it. If you forget that we did Daylight Savings Time, then you’re an hour off from everybody else and it’s bewildering and a nuisance.
Same problem with leap seconds, except for us, a second is not a big deal. For a computer network, though, a second is a big deal. And why is that? Well, for example, in the United States, the rules for stock markets say that everything that is done has to be accurately timed to a 20th of a second. In Europe, it’s actually to the nearest 1,000th of a second. If we were all just farmers or something, it wouldn’t be a problem, but there’s this whole infrastructure that’s invisible to us that tells our phones what time it is, and allows GPS to work, and everything else.
The easiest thing to do would be to not have a negative leap second. Indeed, there are plans not to have leap seconds anymore because for computer networks, they’re an enormous problem. They arrive at irregular intervals; some human being has to put the information into the computer; the computer has to have a program that tells it when the leap seconds are; and most computer programs can’t tell whether it’s a plus or minus second because there’s never been a minus before. From the computer network standpoint, it would be simplest to just not do this.
So, you ask, why are we doing this? In 1972, when leap seconds were instituted, there were two communities that cared about precise time. One was the people who cared about the frequency of your radio station and other kinds of telecommunications. They wanted to use atomic clocks with frequencies that didn’t change, but that didn’t mesh with what the Earth was doing.
Who cares about time telling you how the Earth is rotating? Well, the answer then was that there were people who used the stars for celestial navigation. Back then, celestial navigation was used not just for ships, but for airplanes — if you flew across the ocean, there was a guy in the cockpit, an actual navigator, who would use a periscope to look at the stars and locate the plane, if only as sort of a backup system. That community is now gone. Almost nobody uses celestial navigation as a primary, or even a secondary, way of finding out where they are anymore because of GPS.
My own personal view — and I can warn you, there’s a huge amount of dispute about this — is that we’d be fine if we just stopped having leap seconds at all.
Is there a … governing body of time? That forces us to do leap seconds?
There’s a giant tangle of international organizations that deal with this, but the rules were set by the people in charge of keeping radio stations aligned because radio broadcasts were how time signals were distributed back in 1972. So the rule was created. Who makes that decision is something called the International Earth Rotation and Reference Systems Service, which uses astronomy to monitor what the Earth is doing. They can predict a little bit in advance where things are going to be, and if within six months things are going to be more than half a second out, they will announce there will be a leap second.
Back to climate change: It seems pretty amazing that something like melting ice can throw things off so much.
All the stuff about negative seconds is important, but it’s only important because of this infrastructure, because we have all these rules. Strip all of that away and the most important result becomes the fact that climate change has caused an amount of ice melt that is enough to change the rotation rate of the entire Earth in a way that’s visible.
How do you talk to people about the gigatons of ice that Greenland loses every year? Do you talk about “water that could cover the entire United States to the depth of X” to get it into people’s minds? Yes, these are small changes in the rotation rate, but just the fact that we can say, “Look, this is slowing down the entire Earth” seems like another way of saying that climate change is unprecedented and important.
How do we proceed, then, if climate change is messing with our system?
There was a lot of resistance to even introducing atomic time. Time was thought of as being about Earth’s rotation and the astronomers didn’t want to give it up. In fact, in the 19th century, observatories would make money by selling time signals to the rest of the community. Then, in the 1950s, the physicists showed up, ran atomic clocks, never looked at the stars, and said, “We can do time better.” The physicists were right. But it took the astronomical community a while to come around to accepting that was how time was going to be defined.
If we get rid of leap seconds then we’d really have cut the connection between the way in which human beings have always thought of time as being, say, from noon to noon, or from sunrise to sunset, and we’d be replacing it with some bunch of guys in a laboratory somewhere running a machine. For some people, it’s very troubling to think of severing the keeping of time from the Earth’s rotation.
You lose a bit of the romance, I think. But clearly, tying our way of describing the linear passage of sequential events to the Earth’s rotation is going to be messy.
Exactly right. There’s a quote from, of all people, St. Augustine, saying, “I know what time is, but if somebody asked me, I can’t tell them.”
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A new report from the American Council for an Energy-Efficient Economy has some exciting data for anyone attempting to retrofit a multifamily building.
By now there’s plenty of evidence showing why heat pumps are such a promising solution for getting buildings off fossil fuels. But most of that research has focused on single-family homes. Larger apartment buildings with steam or hot water heating systems — i.e. most of the apartment buildings in the Northeast — are more difficult and expensive to retrofit.
A new report from the nonprofit American Council for an Energy-Efficient Economy, however, assesses a handful of new technologies designed to make that transition easier and finds they have the potential to significantly lower the cost of decarbonizing large buildings.
“Several new options make decarbonizing existing commercial and multifamily buildings much more feasible than a few years ago,” Steven Nadel, ACEEE’s executive director and one of the authors, told me. “The best option may vary from building to building, but there are some exciting new options.”
To date, big, multifamily buildings have generally had two flavors of heat pumps to consider. They can install a large central heat pump system that delivers heating and cooling throughout the structure, or they can go with a series of “mini-split” systems designed to serve each apartment individually. (Yes, there are geothermal heat pumps, too, but those are often even more expensive and complicated to install, especially in urban areas.)
While these options have proven to work, they often require a fair amount of construction work, including upgrading electrical systems, mounting equipment on interior and exterior walls, and running new refrigerant lines throughout the building. That means they cost a lot more than a simple boiler replacement, and that the retrofit process can be disruptive to residents.
In 2022, the New York City Housing Authority launched a contest to try and solve these problems by challenging manufacturers to develop heat pumps that can sit in a window just like an air conditioner. New designs from the two winners, Gradient Comfort and Midea, are just starting to come to market. But another emerging solution, central air-to-water heat pumps, also presents an appealing alternative. These systems avoid major construction because they can integrate with existing radiators or baseboard heaters in buildings that currently use hot water boilers. Instead of burning natural gas or oil to produce hot water, the heat pump warms the water using electricity.
The ACEEE report takes the cost and performance data for these emerging solutions and compares it to results from mini-splits, central heat pumps, geothermal heat pumps, packaged terminal heat pumps — all-in-one devices that sit inside a sleeve in the wall, commonly used in hotels — and traditional boilers fed by biogas or biodiesel.
While data on the newer technologies is limited, so far the results are extremely promising. The report found that window heat pumps are the most cost-effective of the bunch to fully decarbonize large apartment buildings, with an average installation cost of $9,300 per apartment. That’s significantly higher than the estimated $1,200 per apartment cost of a new boiler, but much lower than the $14,000 to $20,000 per apartment price tag of the other heat pump variations, although air-to-water heat pumps came in second. The report also found that window heat pumps could turn out to be the cheapest to operate, with a life cycle cost of about $14,500, compared to $22,000 to $30,000 for boilers using biodiesel or biogas or other heat pump options.
As someone who has followed this industry for several years with a keen interest in new solutions for boiler-heated buildings in the Northeast — where I grew up and currently reside — I was especially wowed by how well the new window heat pumps have performed. New York City installed units from both Midea and Gradient in 24 public housing apartments, placing one in each bedroom and living room, and monitored the results for a full heating season.
Preliminary data shows the units performed swimmingly on every metric.
On ease of installation: It took a total of eight days for maintenance workers to install the units in all 24 apartments, compared to about 10 days per apartment when the Housing Authority put split heat pump systems in another building.
On performance: During the winter, while other apartments in the building were baking in 90-degree Fahrenheit heat from the steam system, the window unit-heated apartments maintained a comfortable 75 to 80 degree range, even as outdoor temperatures dropped to as low as 20 degrees.
On energy and cost: The window unit-heated apartments used a whopping 87% less energy than the rest of the building’s steam-heated apartments did, cutting energy costs per household in half.
On customer satisfaction: A survey of 72 residents returned overwhelmingly positive feedback, with 93% reporting that the temperature was “just right” and 100% reporting they were either “neutral” or “satisfied” with the new units.
The Housing Authority found that the units also lowered energy used for cooling in peak summer since they were more efficient than the older window ACs residents had been using. Next, the agency plans to expand the pilot to two full buildings before deploying the units across its portfolio. The pilot was so successful that utilities in Massachusetts, Vermont, and elsewhere are purchasing units to do their own testing.
The ACEEE report looked at a handful of air-to-water heat pump projects in New York and Massachusetts, as well, only two of which have been completed. The average installation cost per apartment was around $13,500, with each of the buildings retaining a natural gas boiler as a backup, but none had published performance data yet.
Air-to-water heat pumps have only recently come to market in the U.S. after having taken off in Europe, and they don’t yet fit seamlessly into the housing stock here. Existing technology can only heat water to 130 to 140 degrees, which is hot enough for the more efficient hot water radiators common in Europe but too cold for the U.S. market, where hot water systems are designed to carry 160- to 180-degree water, or even steam.
These heat pumps can still work in U.S. buildings, but they require either new radiators to be installed or supplemental heat from a conventional boiler or electric resistance unit. The other downside to an air-to-water system is that it can’t provide cooling unless the building is already equipped with compatible air conditioning units.
One strength of these systems over the window units, however, is that they don’t push costs onto tenants in buildings where the landlord has historically paid for heat. They also may be cheaper to operate than more traditional heat pump options, although data is still extremely limited and depends on the use of supplemental heat.
It’s probably too soon to draw any major conclusions about air-to-water systems, anyway, because new, potentially more effective options are on the way. In 2023, New York State launched a contest challenging manufacturers to develop new decarbonized heating solutions for large buildings. Among the finalists announced last year, six companies were developing heat pumps that could generate higher-temperature hot water and/or steam. One of them is now installing its first demonstration system in an apartment building in Harlem, and two others have similar demonstrations in the works.
The ACEEE report also mentions a few other promising new heat pump formats, such as an all-in-one wall-mounted heat pump from Italian company Ephoca. It’s similar to the window heat pump in that it’s contained in a single device rather than split into an indoor and outdoor unit, so it doesn’t require mounting anything to the outside of the building or worrying about refrigerant lines, although it does require drilling two six-inch holes in the wall for vents. These may be a good option for those whose windows won’t accommodate a window heat pump or who don’t like the aesthetics. New York State is also funding product development for better packaged terminal heat pumps that could slot into wall cavities occupied by less-efficient packaged terminal air conditioners and heat pumps today.
Gradient and Midea are not yet selling their cold-climate window heat pumps to the general public. Gradient brought a version of its technology for more moderate climates to market in 2023, which was only suitable for heating at outdoor temperatures of 40 degrees and higher. But the company has discontinued that model and is focusing on an “all-weather” version designed for cold climates, which is the one that has been installed in the New York City apartments. Neither company responded to my inquiry about when their heat pumps would be available to consumers.
One big takeaway is that even the new school heat pumps designed to be easier and cheaper to install have higher capital costs than buying a boiler and air conditioners — a stubborn facet of many climate solutions, even when they save money in the long run. Canary Media previously reported that the Gradient product would start at $3,800 per unit and the Midea at $3,000. Experts expect the cost to come down as adoption and demand pick up, but the ACEEE report recommends that states develop incentives and financing to help with up-front costs.
“These are not just going to happen on their own. We do need some policy support for them,” Nadel said. In addition to incentives and building decarbonization standards, Nadel raised the idea of discounted electric rates for heat pump users, an idea that has started to gain traction among climate advocates that a few utilities have piloted.
“To oversimplify,” Nadel said, “in many jurisdictions, heat pumps subsidize other customers, and that probably needs to change if this is going to be viable.”
Current conditions: Two people are missing after torrential rains in Catalonia • The daily high will be over 115 degrees Fahrenheit every day this week in Baghdad, Iraq • The search for victims of the Texas floods is paused due to a new round of rains and flooding in the Hill Country.
Homeland Security Secretary Kristi Noem defended the Federal Emergency Management Agency after The New York Times reported it failed to answer nearly two-thirds of the calls placed to its disaster assistance line by victims of the Central Texas floods. Speaking on NBC’s Meet the Press on Sunday, Noem repudiated reports by the Times and Reuters that her requirement that she personally approve expenses over $100,000, as well as the deployment of other critical resources, created bottlenecks during the crucial hours after the floodwaters receded. “Those claims are absolutely false,” she said.
Noem additionally denied reports that FEMA’s failure to renew the contracts of call-center contractors created a slowdown at the agency. Per the Times’ reporting, FEMA allowed its call center contract extension to expire on the night of July 5, in the midst of the unfolding disaster. During the day on July 5, FEMA answered the calls of 99.7% of survivors seeking one-time assistance for their immediate needs, the Times’ reporting shows; after FEMA failed to renew the contracts and hundreds of contractors were fired, the answer rate dropped to just 35.8% on July 6, and 15.9% on July 7. “Those contracts were in place, no employees were off of work,” Noem told Meet the Press. (Reuters reports that an internal FEMA document shows Noem approved the call center contracts as of July 10.)
At least 120 people died in the flash floods in Texas’ Hill Country over the Fourth of July weekend, with more than 160 people still missing. FEMA has fired or bought out at least 2,000 full-time employees since the start of the year, though since the floods, the Trump administration has reframed its push to “abolish” FEMA as “rebranding” FEMA, instead.
The Trump administration last week fired the final handful of employees who worked at the Office of Global Change, the division of the State Department that focused on global climate negotiations. Per The Washington Post, the employees were the final group at the department working on issues of international climate policy, and were part of bigger cuts to the agency that will see nearly 3,000 staffers out of work. “The Department is undertaking a significant and historic reorganization to better align our workforce activities and programs with the America First foreign policy priorities,” the State Department told the Post in a statement about the shuttering of the office.
Grand Canyon Lodge employees pictured on July 20, 1930. NPS/George Grant
The historic Grand Canyon Lodge burned down in the nearly 6,000-acre Dragon Bravo Fire in Arizona over the weekend. The rustic lodge, located on the Canyon’s remote North Rim, had stood since 1937, when it was rebuilt after a kitchen fire, and was the only hotel located inside the boundaries of the national park.
Arizona Governor Katie Hobbs called for an investigation into the National Park Service’s handling of the fire, which destroyed an additional 50 to 80 structures on the park’s North Rim. “An incident of this magnitude demands intense oversight and scrutiny into the federal government’s emergency response,” she said, adding that “Arizonans deserve answers for how this fire was allowed to decimate the Grand Canyon National Park.” The Dragon Bravo Fire is one of two wildfires burning on the park’s north side and began after a lightning strike on July 4. The famous Phantom Ranch, located inside the canyon, and popular Bright Angel Trail and Havasupai Gardens, were also closed to hikers as of Sunday due to the fires.
Late last week, the local government of Nantucket reached a settlement with GE Vernova for $10.5 million to compensate for the tourism and business losses that resulted from the July 2024 turbine failure at Vineyard Wind 1. The town will use the money to establish a Community Claims Fund to provide compensation to affected parties.
The incident involved a 350-foot blade from a GE Vernova turbine that split off and fell into the water during construction of Vineyard Wind. Debris washed up onshore, temporarily closing some of the Massachusetts island’s iconic beaches during the height of tourist season. “The backlash was swift,” my colleague Emily Pontecorvo reported at the time. “Nantucket residents immediately wrote to Nantucket’s Select Board to ask the town to stop the construction of any additional offshore wind turbines.” Though significant errors like blade failures are incredibly rare, as my colleague Jael Holzman has also reported, the disaster could not have come at a worse time for Vineyard Wind, which subsequently saw its expansion efforts stymied by the Trump administration.
Nineteen states and the territory of Guam moved last week to intervene in a May lawsuit claiming the Trump administration has violated young people’s right to good health and a stable environment. The original complaint was filed in May by 22 plaintiffs represented by Our Children’s Trust — the same Oregon group that brought Held v. Montana, which successfully argued that the state violated young people’s constitutional right to a clean and healthful environment, as well as the groundbreaking climate case Juliana v. United States, which the Supreme Court declined to hear this spring.
In the new Montana-led move, the coalition of states represented by their respective attorneys general is seeking to join the lawsuit as defendants. Per Our Children’s Trust, the plaintiffs will file a formal response to the motion to intervene in the coming weeks.
More than half of all the soybean oil produced in the United States next year will be used to make biofuel, according to a new outlook by the U.S. Department of Agriculture.
Editor’s note: This story has been updated to reflect the current state of the youth climate lawsuit.
The multi-faceted investment is defense-oriented, but could also support domestic clean energy.
MP Materials is the national champion of American rare earths, and now the federal government is taking a stake.
The complex deal, announced Thursday, involves the federal government acting as a guaranteed purchaser of MP Materials’ output, a lender, and also an investor in the company. In addition, the Department of Defense agreed to a price floor for neodymium-praseodymium products of $110 per kilogram, about $50 above its current spot price.
MP Materials owns a rare earths mine and processing facility near the California-Nevada border on the edges of the Mojave National Preserve. It claims to be “the largest producer of rare earth materials in the Western Hemisphere,” with “the only rare earth mining and processing site of scale in North America.”
As part of the deal, the company will build a “10X Facility” to produce magnets, which the DOD has guaranteed will be able to sell 100% of its output to some combination of the Pentagon and commercial customers. The DOD is also kicking in $150 million worth of financing for MP Materials’ existing processing efforts in California, alongside $1 billion from Wall Street — specifically JPMorgan Chase and Goldman Sachs — for the new magnet facility. The company described the deal in total as “a multi-billion-dollar commitment to accelerate American rare earth supply chain independence.”
Finally, the DOD will buy $400 million worth of newly issued stock in MP Materials, giving it a stake in the future production that it’s also underwriting.
Between the equity investment, the lending, and the guaranteed purchasing, the Pentagon, and by extension the federal government, has taken on considerable financial risk in casting its lot with a company whose primary asset’s previous owner went bankrupt a decade ago. But at least so far, Wall Street is happy with the deal: MP Materials’ market capitalization soared to over $7 billion on Thursday after its share price jumped over 40%, from a market capitalization of around $5 billion on Wednesday and the company is valued at around $7.5 billion as of Friday afternoon.
Despite the risk, former Biden administration officials told me they would have loved to make a deal like this.
When I asked Alex Jacquez, who worked on industrial policy for the National Economic Council in the Biden White House, whether he wished he could’ve overseen something like the DOD deal with MP Materials, he replied, “100%.” I put the same question to Ashley Zumwalt-Forbes, a former Department of Energy official who is now an investor; she said, “Absolutely.”
Rare earths and critical minerals were of intense interest to the Biden administration because of their use in renewable energy and energy storage. Magnets made with neodymium-praseodymium oxide are used in the electric motors found in EVs and wind turbines, as well as for various applications in the defense industry.
MP Materials will likely have to continue to rely on both sets of customers. Building up a real domestic market for the China-dominated industry will likely require both sets of buyers. According to a Commerce Department report issued in 2022, “despite their importance to national security, defense demand for … magnets is only a small portion of overall demand and insufficient to support an economically viable domestic industry.”
The Biden administration previously awarded MP Materials $58.5 million in 2024 through the Inflation Reduction Act’s 48C Advanced Energy Project tax credit to support the construction of a magnet facility in Fort Worth. While the deal did not come with the price guarantees and advanced commitment to purchase the facility’s output of the new agreement, GM agreed to come on as an initial buyer.
Matt Sloustcher, an MP Materials spokesperson, confirmed to me that the Texas magnet facility is on track to be fully up and running by the end of this year, and that other electric vehicle manufacturers could be customers of the new facility announced on Thursday.
At the time MP Materials received that tax credit award, the federal government was putting immense resources behind electric vehicles, which bolstered the overall supply supply chain and specifically demand for components like magnets. That support is now being slashed, however, thanks to the One Big Beautiful Bill Act, which will cancel consumer-side subsidies for electric vehicle purchases.
While the Biden tax credit deal and the DOD investment have different emphases, they both follow on years of bipartisan support for MP Materials. In 2020, the DOD used its authority under the Defense Production Act to award almost $10 million to MP Materials to support its investments in mineral refining. At the time, the company had been ailing in part due to retaliatory tariffs from China, cutting off the main market for its rare earths. The company was shipping its mined product to China to be refined, processed, and then used as a component in manufacturing.
“Currently, the Company sells the vast majority of its rare earth concentrate to Shenghe Resources,” MP Materials the company said in its 2024 annual report, referring to a Chinese rare earths company.
The Biden administration continued and deepened the federal government’s relationship with MP Materials, this time complementing the defense investments with climate-related projects. In 2022, the DOD awarded a contract worth $35 million to MP Materials for its processing project in order to “enable integration of [heavy rare earth elements] products into DoD and civilian applications, ensuring downstream [heavy rare earth elements] industries have access to a reliable feedstock supplier.”
While the DOD deal does not mean MP Materials is abandoning its energy customers or focus, the company does appear to be to the new political environment. In its February earnings release, the company mentioned “automaker” or “automotive-grade magnets” four times; in its May earnings release, that fell to zero times.
Former Biden administration officials who worked on critical minerals and energy policy are still impressed.
The deal is “a big win for the U.S. rare earths supply chain and an extremely sophisticated public-private structure giving not just capital, but strategic certainty. All the right levers are here: equity, debt, price floor, and offtake. A full-stack solution to scale a startup facility against a monopoly,” Zumwalt-Forbes, the former Department of Energy official, wrote on LinkedIn.
While the U.S. has plentiful access to rare earths in the ground, Zumwalt-Forbes told me, it has “a very underdeveloped ability to take that concentrate away from mine sites and make useful materials out of them. What this deal does is it effectively bridges that gap.”
The issue with developing that “midstream” industry, Jacquez told me, is that China’s world-leading mining, processing, and refining capacity allows it to essentially crash the price of rare earths to see off foreign competitors and make future investment in non-Chinese mining or processing unprofitable. While rare earths are valuable strategically, China’s whip hand over the market makes them less financially valuable and deters investment.
“When they see a threat — and MP is a good example — they start ramping up production,” he said. Jacquez pointed to neodymium prices spiking in early 2022, right around when the Pentagon threw itself behind MP Materials’ processing efforts. At almost exactly the same time, several state-owned Chinese rare earth companies merged. Neodymium-praseodymium oxide prices fell throughout 2022 thanks to higher Chinese production quotas — and continued to fall for several years.
While the U.S. has plentiful access to rare earths in the ground, Zumwalt-Forbes told me, it has “a very underdeveloped ability to take that concentrate out away from mine sites and make useful materials out of them. What this deal does is it effectively bridges that gap.”
The combination of whipsawing prices and monopolistic Chinese capacity to process and refine rare earths makes the U.S.’s existing large rare earth reserves less commercially viable.
“In order to compete against that monopoly, the government needed to be fairly heavy handed in structuring a deal that would both get a magnet facility up and running and ensure that that magnet facility stays in operation and weathers the storm of Chinese price manipulation,” Zumwalt-Forbes said.
Beyond simply throwing money around, the federal government can also make long-term commitments that private companies and investors may not be willing or able to make.
“What this Department of Defense deal did is, yes, it provided much-needed cash. But it also gave them strategic certainty around getting that facility off the ground, which is almost more important,” Zumwalt-Forbes said.
“I think this won’t be the last creative critical mineral deal that we see coming out of the Department of Defense,” Zumwalt-Forbes added. They certainly are in pole position here, as opposed to the other agencies and prior administrations.”