Gina Rinehart, Australia’s wealthiest individual and iron ore magnate, has made a significant move into the U.S. rare earths sector by purchasing a 5.3% stake in MP Materials, the owner of the Mountain Pass rare earths mine in California. This decision comes amidst increasing competition with China for these high-tech materials, as well as a potential mega mining merger on the horizon. Rinehart’s investment has had a positive impact on MP’s stock price, which has seen a 20% increase over the past five days.
While Rinehart has already made a profit on her investment in MP, it is unlikely that short-term gain is her primary objective. She also holds stakes in other rare earth companies, including a 10% interest in Arafura Resources, an emerging Australian producer, and a 5.8% ownership in a Brazilian rare earth firm. With her substantial financial resources and growing cash reserves from iron ore, Rinehart is in a position to influence the western world’s rare earths industry.
The rise of non-Chinese rare earth suppliers has been fueled by concerns over China’s dominance and potential threats to restrict supply. MP, with its ties to the U.S. Government, is at the forefront of efforts to develop alternative sources of crucial metals like neodymium and praseodymium. Speculation about a merger between MP and Lynas Rare Earths, Australia’s top rare earth producer, has been circulating, with talks held earlier this year but no deal reached. Rinehart’s involvement in MP could push the companies towards a merger, creating a major non-Chinese rare earth source.
A potential combination of Lynas and MP would not only establish the largest non-Chinese rare earth supplier but also open up opportunities for further growth and integration, including potentially bringing in Arafura Resources’ Nolans project and the Brazilian Rare Earths project in Bahia State, in which Rinehart also has a stake. Collaboration between the U.S. and Australian governments on critical metals production, as well as technical developments in rare earth separation plants in Texas, further highlight the interconnectedness of the two countries’ efforts in the sector.
Rinehart’s investment in MP has also generated interest in Lynas on the Australian stock exchange, with the company’s stock price rising by 7.5% over the past three days. The alignment of interests among the various companies involved in the rare earth industry, as well as the shared goals of the U.S. and Australian governments, indicates a growing synergy and collaboration in the pursuit of diversified and secure rare earth supplies. The strategic moves made by Rinehart and other key players in the industry suggest a shifting landscape with potential implications for the global rare earth market.
