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| Cleveland Cliffs rare earths |
Strategic Shift Signals U.S. Commitment to Critical Minerals Independence
Cleveland-Cliffs has announced its entry into rare earths production in the US, targeting deposits discovered in Michigan and Minnesota. This move marks a strategic expansion beyond its traditional iron ore and steel operations. CEO Lourenco Goncalves emphasized that these developments could enhance U.S. self-reliance in sourcing critical minerals vital for electronics and clean energy.
The deposits are still under geological evaluation, but Goncalves expressed confidence. “We are a mining company; this isn’t new territory for us,” he stated during the Q3 earnings call. As a result, Cleveland-Cliffs' stock surged 23% to $16.68, reflecting market optimism about the diversification and its potential impact on national resource security.
Aligning with National Policy on Resource Security
The decision aligns with U.S. policy to reduce reliance on Chinese rare earths, currently dominating the global supply chain. Goncalves highlighted the strategic importance of critical materials independence, comparing it to Cliffs’ past efforts in securing domestic steel supply chains.
This pivot also follows recent federal actions, such as the U.S. Department of Defense’s investment in MP Materials—currently the nation’s only operating commercial rare earth mine. The government’s willingness to establish price floors and offtake agreements signals broader institutional support for reshoring rare earth capabilities.
Industry Implications and Competitive Positioning
Cleveland-Cliffs' move into rare earths production in the US positions the company to compete in a sector with significant geopolitical and industrial implications. If commercially viable, the Michigan and Minnesota sites could reduce U.S. vulnerability to foreign supply disruptions.
Meanwhile, Cliffs signed a memorandum of understanding with an unnamed steel producer, leveraging its U.S.-based, trade-compliant assets. This partnership could support vertically integrated supply chains for both steel and critical minerals—an attractive proposition for OEMs under growing regulatory pressure to localize sourcing.
ScrapInsight Commentary
Cleveland-Cliffs’ potential entry into rare earths marks a pivotal moment in U.S. critical mineral strategy. If deposits prove viable, it could reshape domestic supply dynamics and attract federal incentives similar to those granted to MP Materials. For traders, Cliffs’ diversification may foreshadow rising U.S. demand for rare earth processing infrastructure and a gradual decoupling from Asian supply chains.
