Australian iron ore billionaire Gina Rinehart has recently disclosed a 5.82% stake in Lynas Rare Earths, a move that hints at her ambition to play a key role in reducing China’s dominance in technology metals. This announcement follows her earlier revelation of a 5.3% holding in the U.S. rare earth miner, MP Materials. These strategic investments signal Rinehart’s interest in leading a joint Australia/U.S. effort to challenge China’s control over rare earths production.
The disclosure of Rinehart’s stake in Lynas was made to the Australian stock exchange in an initial substantial shareholder notice. Her family company, Hancock Prospecting, had started acquiring Lynas shares just before Christmas, with an initial investment of $1.6 million. The latest investment of $26 million has raised her Lynas position above the 5% substantial shareholder reporting threshold. MP Materials and Lynas are significant suppliers of metals such as Neodymium and Praseodymium to the global rare earth supply chain, collectively supplying over 25% of the market.
The potential combination of MP Materials and Lynas would create a strong entity capable of supplying a significant portion of the global rare earth market. Talks were held earlier this year regarding a merger between the two companies, although no agreement was reached. Given Rinehart’s interest in developing a substantial rare earth business to complement her iron ore operations, negotiations could be revived in the future. The move reflects Rinehart’s commitment to diversifying her investment portfolio beyond iron ore, which contributes to her $30 billion fortune.
Rinehart’s specific plans for her rare earth interests have not been fully detailed, but her investments in companies involved in rare earth production or exploration indicate a broader strategy in the sector. In addition to Lynas and MP Materials, Rinehart holds a 10% interest in Arafura Rare Earths, which is developing the Nolans project in Northern Territory, and a 5.8% stake in a Brazilian rare earth company. Notably, both Lynas and MP Materials are establishing rare earth processing facilities in Texas with the aim of reducing reliance on Chinese finished products in the supply chain.
Both MP Materials and Lynas have faced challenges in the past due to fluctuating rare earth prices and Chinese overproduction tactics aimed at stifling competition. MP Materials was rescued from insolvency in 2018, while Lynas received a financial injection in 2017 from entities allied with the Japanese government. Rinehart’s reportedly positive relationship with Lynas CEO Amanda Lacaze could pave the way for further collaboration between the companies. With significant holdings in the western world’s major rare earth miners and explorers, Rinehart is well positioned to drive potential mining mergers in the rare earth industry.
As the global demand for rare earths, essential in electric vehicles and aerospace technology, continues to grow, Rinehart’s strategic investments in this sector highlight her proactive approach to securing a competitive position in critical technology metals. By fostering partnerships and potentially consolidating assets in the rare earth market, Rinehart seeks to make a substantial impact on reducing China’s dominance in this crucial industry. With her established track record in the mining sector, Rinehart’s foray into rare earths underscores her commitment to diversification and innovation in her business endeavors.
