Lynas Rare Earths and Iluka Resources soar after rival MP Materials strikes Pentagon deal
MP Materials welcomed a new number one shareholder after the United States' Department of Defense agreed to acquire more than $606m of its stock and inked an offtake agreement to buy MP's Californian production of rare earth materials at a set minimum price.
The price floor has been set to break China's near-total control of the supply chain for rare earth elements, which are minerals needed to build the magnets that power military equipment like precision-guided missiles and fighter jets.
As part of the deal, Las Vegas-based MP will also build a second magnet factory in the US, with another currently under construction.
China's market control over the end-product magnets has distorted prices of rare earth elements and given the Middle Kingdom a powerful bargaining chip over its biggest geopolitical rival.
New York-listed MP's stock soared more than 50 per cent on the announcement and it had a ripple effect on local Australian producers and hopefuls during early Friday trade.
Shares in Lynas were up 17 per cent and Iluka's surged stock 25 per cent, with investors seemingly excited Uncle Sam has an appetite to buy rare earth production at a premium price, and that a new magnet factory could potentially take in some of Australia's output.
It is particularly good news for mining billionaire Gina Rinehart, who stands to add more than $500m to her net worth in the space of 24 hours owing to major stakes in MP and Lynas.
Lynas has operations in WA and Malaysia with ambitions to build a rare earths refinery in Texas.
It secured a $US288 million commitment from the US Department of Defense under the Biden Administration, but there has been little progress in developing the refinery.
The Amanada Lacaze-led Lynas has run into wastewater permitting issues at the Texas site and wants the US taxpayer to foot the bill for a cost blowout — the scale of which has not been disclosed.
MP and Lynas were previously in takeover talks but they fizzled out in 2024.
Iluka, meanwhile, is developing the Eneabba rare earths refinery near Kalbarri and as part of its $1.65 billion funding deal with the Australian Government has strict restrictions imposed on Eneabba's future output being sold to China.
A raft of ASX-listed rare earths juniors like Arafura Rare Earths, Hastings Technology Metals and Brazilian Rare Earths, the latter of which Mrs Rinehart also has a chunky stake in, made gains on Friday.
Like the US, Australia is keen to break China's rare earth stranglehold. The Federal Government has plans to build its own critical minerals stockpile centred around rare earth elements.
Speaking on Thursday in the Goldfields, Federal Resources Minister Madeleine King said the plans to build the $1.2 billion stockpile were progressing but details over which minerals will be included have yet to be determined.
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Ms Thomas, an activist and lawyer, was among five people arrested in Sydney on June 27 outside an Australian firm reportedly linked to the manufacture of components for US fighter jets used by the Israeli Defence Force. The arrests are being investigated by police officers from another command, with an internal review by professional standards and external oversight by the police watchdog, the Law Enforcement Conduct Commission. Mr O'Brien has written to NSW Police and the Office of the Director of Public Prosecutions demanding the charges against Ms Thomas, 35, be dropped. He also has instructions to proceed on a civil claim seeking compensation for the actions that led to her injury. "Torts likely to be pursued against the state include assault and battery, false imprisonment, malicious prosecution, misfeasance in public office, and collateral abuse of process," he said in a statement on Monday. "I am satisfied that Ms Thomas was punched in the face by a male police officer, causing extensive and serious injury to her eye ... We are further satisfied that Ms Thomas was an innocent victim of gratuitous police brutality and excessive use of force, actions that were completely and entirely unjustifiable." Her legal team say they have watched all available footage of the incident and object to claims made by senior police officers, which they argue downplay its gravity. NSW Police Assistant Commissioner Brett McFadden has previously said he did not observe any misconduct in the body-worn camera footage of the incident. All officers involved remained on duty. Mr O'Brien noted the incident occurred at the same time state laws strengthening police powers to crack down on protests had been increased. 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"We owe it to Palestinians to escalate, to keep targeting companies like SEC Plating, which play a role in the F-35 global supply chain and enable genocide against the Palestinian people," she said. "This company does not deserve to profit from the genocide." Ms Thomas, who ran second to Prime Minister Anthony Albanese in the inner-west Sydney seat of Grayndler in the federal election in May, was charged with hindering or resisting police and not following a move-on direction. Lawyers for a one-time Greens candidate who suffered a serious eye injury while being arrested at an anti-Israel protest say they are ready to sue the state of NSW. Hannah Thomas was allegedly punched in the face by a male NSW Police officer in an act of "gratuitous police brutality and excessive use of force", her lawyer Peter O'Brien says. 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"We owe it to Palestinians to escalate, to keep targeting companies like SEC Plating, which play a role in the F-35 global supply chain and enable genocide against the Palestinian people," she said. "This company does not deserve to profit from the genocide." Ms Thomas, who ran second to Prime Minister Anthony Albanese in the inner-west Sydney seat of Grayndler in the federal election in May, was charged with hindering or resisting police and not following a move-on direction. Lawyers for a one-time Greens candidate who suffered a serious eye injury while being arrested at an anti-Israel protest say they are ready to sue the state of NSW. Hannah Thomas was allegedly punched in the face by a male NSW Police officer in an act of "gratuitous police brutality and excessive use of force", her lawyer Peter O'Brien says. 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The report did not say how the switches could have flipped during the flight. The US Federal Aviation Administration and Boeing have privately issued notifications that the fuel switch locks on Boeing planes are safe, a document seen by Reuters shows. The FAA's Continued Airworthiness Notification on July 11 came after a preliminary report into Air India's Boeing 787-8 crash, which killed 260 people last month, raised questions over engine fuel cutoff switches. The FAA's notification to Civil Aviation Authorities, seen by Reuters, said: "although the fuel control switch design, including the locking feature, is similar on various Boeing airplane models, the FAA does not consider this issue to be an unsafe condition that would warrant an Airworthiness Directive on any Boeing airplane models, including the Model 787." The FAA said it did not have anything to add beyond the notification. Boeing also referred to the FAA notification in a Multi-Operator-Message sent to the airlines in the past few days, which said the planemaker is not recommending any action, two of the sources with direct knowledge said. When asked for comment, Boeing referred Reuters' questions to the FAA. The preliminary investigation report into the crash by India's Aircraft Accident Investigation Bureau (AAIB), referred to a 2018 FAA advisory, which recommended, but did not mandate, operators of several Boeing models, including the 787, to inspect the locking feature of the fuel cutoff switches to ensure it couldn't be moved accidentally. The report said Air India had said it had not carried out the FAA's suggested inspections as the FAA 2018 advisory was not a mandate. But it also said maintenance records showed that the throttle control module, which includes the fuel switches, was replaced in 2019 and 2023 on the plane involved in the crash. The report noted "all applicable airworthiness directives and alert service bulletins were complied on the aircraft as well as engines". ALPA India, which represents Indian pilots at the Montreal-based International Federation of Air Line Pilots' Associations, in a statement on Saturday rejected the presumption of pilot error and called for a "fair, fact-based inquiry". "The pilots body must now be made part of the probe, at least as observers," ALPA India President Sam Thomas told Reuters on Sunday. ALPA India, in a letter posted on X, said the preliminary investigation report referred to the 2018 FAA advisory "concerning the fuel control switch gates, which indicates a potential equipment malfunction". In the flight's final moments, one pilot was heard on the cockpit voice recorder asking the other why he cut off the fuel. "The other pilot responded that he did not do so," the report said. It said fuel switches had almost simultaneously flipped from run to cutoff just after takeoff. The report did not say how the switches could have flipped during the flight. The US Federal Aviation Administration and Boeing have privately issued notifications that the fuel switch locks on Boeing planes are safe, a document seen by Reuters shows. The FAA's Continued Airworthiness Notification on July 11 came after a preliminary report into Air India's Boeing 787-8 crash, which killed 260 people last month, raised questions over engine fuel cutoff switches. The FAA's notification to Civil Aviation Authorities, seen by Reuters, said: "although the fuel control switch design, including the locking feature, is similar on various Boeing airplane models, the FAA does not consider this issue to be an unsafe condition that would warrant an Airworthiness Directive on any Boeing airplane models, including the Model 787." The FAA said it did not have anything to add beyond the notification. Boeing also referred to the FAA notification in a Multi-Operator-Message sent to the airlines in the past few days, which said the planemaker is not recommending any action, two of the sources with direct knowledge said. When asked for comment, Boeing referred Reuters' questions to the FAA. The preliminary investigation report into the crash by India's Aircraft Accident Investigation Bureau (AAIB), referred to a 2018 FAA advisory, which recommended, but did not mandate, operators of several Boeing models, including the 787, to inspect the locking feature of the fuel cutoff switches to ensure it couldn't be moved accidentally. The report said Air India had said it had not carried out the FAA's suggested inspections as the FAA 2018 advisory was not a mandate. But it also said maintenance records showed that the throttle control module, which includes the fuel switches, was replaced in 2019 and 2023 on the plane involved in the crash. The report noted "all applicable airworthiness directives and alert service bulletins were complied on the aircraft as well as engines". ALPA India, which represents Indian pilots at the Montreal-based International Federation of Air Line Pilots' Associations, in a statement on Saturday rejected the presumption of pilot error and called for a "fair, fact-based inquiry". "The pilots body must now be made part of the probe, at least as observers," ALPA India President Sam Thomas told Reuters on Sunday. ALPA India, in a letter posted on X, said the preliminary investigation report referred to the 2018 FAA advisory "concerning the fuel control switch gates, which indicates a potential equipment malfunction". In the flight's final moments, one pilot was heard on the cockpit voice recorder asking the other why he cut off the fuel. "The other pilot responded that he did not do so," the report said. It said fuel switches had almost simultaneously flipped from run to cutoff just after takeoff. The report did not say how the switches could have flipped during the flight. The US Federal Aviation Administration and Boeing have privately issued notifications that the fuel switch locks on Boeing planes are safe, a document seen by Reuters shows. The FAA's Continued Airworthiness Notification on July 11 came after a preliminary report into Air India's Boeing 787-8 crash, which killed 260 people last month, raised questions over engine fuel cutoff switches. The FAA's notification to Civil Aviation Authorities, seen by Reuters, said: "although the fuel control switch design, including the locking feature, is similar on various Boeing airplane models, the FAA does not consider this issue to be an unsafe condition that would warrant an Airworthiness Directive on any Boeing airplane models, including the Model 787." The FAA said it did not have anything to add beyond the notification. Boeing also referred to the FAA notification in a Multi-Operator-Message sent to the airlines in the past few days, which said the planemaker is not recommending any action, two of the sources with direct knowledge said. When asked for comment, Boeing referred Reuters' questions to the FAA. The preliminary investigation report into the crash by India's Aircraft Accident Investigation Bureau (AAIB), referred to a 2018 FAA advisory, which recommended, but did not mandate, operators of several Boeing models, including the 787, to inspect the locking feature of the fuel cutoff switches to ensure it couldn't be moved accidentally. The report said Air India had said it had not carried out the FAA's suggested inspections as the FAA 2018 advisory was not a mandate. But it also said maintenance records showed that the throttle control module, which includes the fuel switches, was replaced in 2019 and 2023 on the plane involved in the crash. The report noted "all applicable airworthiness directives and alert service bulletins were complied on the aircraft as well as engines". ALPA India, which represents Indian pilots at the Montreal-based International Federation of Air Line Pilots' Associations, in a statement on Saturday rejected the presumption of pilot error and called for a "fair, fact-based inquiry". "The pilots body must now be made part of the probe, at least as observers," ALPA India President Sam Thomas told Reuters on Sunday. ALPA India, in a letter posted on X, said the preliminary investigation report referred to the 2018 FAA advisory "concerning the fuel control switch gates, which indicates a potential equipment malfunction". In the flight's final moments, one pilot was heard on the cockpit voice recorder asking the other why he cut off the fuel. "The other pilot responded that he did not do so," the report said. It said fuel switches had almost simultaneously flipped from run to cutoff just after takeoff. The report did not say how the switches could have flipped during the flight.
