Latest news with #Litinsky
CNBC
a day ago
- Business
- CNBC
U.S. moving fast to secure access to critical minerals to counter China's dominance of market, Pentagon says
The Pentagon is taking immediate action to boost critical mineral production in the U.S. and counter China's dominance of the supply chain for rare earth magnets, a defense official told CNBC on Tuesday. The Defense Department last week agreed to buy a direct equity stake in MP Materials, which will make the U.S. government the miner's largest shareholder. MP operates the only rare earth mine in the U.S. located at Mountain Pass, California, and a magnet plant in Forth Worth, Texas. When asked whether the Pentagon is considering similar investments in other U.S. mining companies, the defense official said it is looking at opportunities to strengthen domestic critical mineral production. "Rebuilding the critical minerals and rare earth magnet sectors of the U.S. industrial base won't happen overnight, but DoD is taking immediate action to streamline processes and identify opportunities to strengthen critical minerals production," official said in a statement. Rare earths are used in weapons such as the F-35 warplane, drones and submarines among other other military platforms. The U.S. was almost entirely dependent on foreign countries for rare earths in 2023, with China representing about 70% of imports, according to the U.S. Geological Survey. MP Materials CEO James Litinsky told CNBC last week that he views the public-private partnership with the Defense Department as a model for other companies in industries that are important for national security but struggle to compete against the state-backed enterprises in China. "I'd like to think that this is sort of the first, it's a model," Litinsky told CNBC's "Squawk on the Street" on Thursday. "We have to deliver at MP and show that this is an incredible route to go. But it's a new way forward to accelerate free markets, to get the supply chain on shore that we want." Interior Secretary Doug Burgum said in April that the U.S. government was looking at taking direct equity stakes in critical mineral and rare earth miners to break China's dominance. The Trump administration is also looking at stockpiling critical minerals and creating a sovereign risk insurance fund to protect companies investments' in federally approved projects, Burgum said at an energy conference in Oklahoma City. The Pentagon makes long-term investments in mining, processing and refining critical minerals, the defense official told CNBC. It has invested $540 million so far to support a critical mineral and rare earth supply chain in the U.S. and allied nations, the official said. "That is significant, and DoD will continue to such efforts in accordance with congressional appropriations and statutory authorities," the official said.
CNBC
6 days ago
- Business
- CNBC
Pentagon to become largest shareholder in rare earth miner MP Materials; shares surge 50%
"I want to be very clear, this is not a nationalization," Litinsky told CNBC's " Squawk on the Street" on Thursday. "We remain a thriving public company. We now have a great new partner in our economically largest shareholder, DoD, but we still control our company. We control our destiny. We're shareholder driven." U.S. miners are facing a unique threat from "Chinese mercantilism," Litinsky said. The Pentagon investment in MP could serve as a model for similar deals with other U.S. companies, the CEO said. "It's a new way forward to accelerate free markets, to get the supply chain on shore that we want and make sure that mercantilism is not going to hurt our ability to do so," Litinsky said. Public-private partnership The Pentagon is buying a newly created class of preferred shares convertible into MP Materials' common stock, in addition to a warrant convertible at $30.03 a share for 10 years that allows the U.S. to buy additional common stock. Exercising the convertible preferred shares and the warrant would leave the Pentagon holding about a 15% stake in MP Materials as of July 9, nearly twice the 8.61% held by Litinsky and the 8.27% held by BlackRock Fund Advisors, according to FactSet data. MP Materials will build its second magnet manufacturing facility in the U.S. to serve defense and commercial customers with support from the Pentagon. The facility, whose location wasn't disclosed, is expected to start commissioning in 2028 and will bring MP Materials rare earth magnet manufacturing capacity to 10,000 metric tons annually. This manufacturing capacity is enough to "meaningfully support U.S. defense and commercial needs," Litinsky told investors on a call Thursday morning. The Pentagon has agreed to buy 100% of the magnets made at the new facility, called 10X, for 10 years after the plant is built to support defense needs and the commercial market. JPMorgan and Goldman Sachs are providing $1 billion to help finance the manufacturing facility. The Pentagon is also guaranteeing a minimum price of $110 per kilogram for 10 years for neodymium-praseodymium oxide, orNdPr, that is stockpiled or sold by MP Materials. NdPr is a rare earth compound used to make permanent magnets. If the market price is below $110 per kilogram, the U.S. will pay MP Materials the difference in a quarterly cash payment, Litinsky said. The Pentagon, in turn, will receive 30% of the upside above $110 per kilogram once MP Materials' second magnet facility is operational, the CEO said. The Defense Department negotiated a very tough deal, Litinsky said. "The taxpayers are going to make a lot of money," the CEO said. MP Materials also expects to receive a $150 million loan in 30 days from the Pentagon to expand its rare earth separation capabilities at Mountain Pass.
Economic Times
6 days ago
- Business
- Economic Times
Magnets, Missiles and Mines: How MP Materials became the Pentagon's secret rare earths weapon for next-gen arms
The US government is stepping in to stop a quiet but serious chokehold: China controls about 70% of the world's rare earth mining and 90% of the refining capacity. These minerals — like neodymium and praseodymium — sit inside the permanent magnets that make electric cars move, phones buzz, and fighter jets fly. Without them, the modern world jams up. MP Materials runs the only operational rare earths mine in America, at Mountain Pass, California. To keep it alive and expanding, the Department of Defense will spend $400 million on new preferred shares, giving it around a 15% stake in the company. JPMorgan and Goldman Sachs are adding $1 billion more to help build the next phase. The real kicker is the safety net. For the next decade, the US government guarantees MP Materials at least $110 per kilogram for its neodymium and praseodymium output. If prices sink below that, taxpayers cover the gap. If prices rise above, the government gets 30% of the profit. As CEO James Litinsky put it, 'The taxpayers are going to make a lot of money.'It's a tough deal. But without it, the whole operation risks collapse under China's low-cost competition. The Pentagon also gets every magnet MP's new plant makes for 10 years — enough to feed both military and commercial Pass alone can't do it all. So MP Materials will build a second magnet factory, the '10X Facility,' alongside its existing Texas project. Once the new site starts running in 2028, America's home-grown magnet output should hit 10,000 metric tons a year. The goal is clear: end the need to ship mined ore to China just to buy it back as finished magnets. Litinsky called it a 'public-private partnership' that ties national security to business survival. He told investors, 'We understand that this partnership is ultimately on behalf of the taxpayers and our national security, and with that comes a great responsibility to get this done right.'This isn't just about economics. It's a strategic fight. China's near-total control of rare earths lets it squeeze supply at will. Last year, Beijing slapped new export rules on these critical minerals, just as tariffs rose on both sides of the Pacific. MP used to ship its entire output to Shenghe Resources, a Chinese company partly owned by the state. But tariffs as high as 125% killed that deal. Now, the US is forcing a break from that Burgum, US Interior Secretary, summed up the stakes in April: America must 'break dependence on China' for materials that end up in F-35s, drones and not just the US feeling the heat. The European Parliament branded China's export controls 'unjustified' and 'intended to be coercive.' They want the EU to speed up its Critical Raw Materials Act to slash dependence on foreign imports. China's foreign minister brushed off the backlash, saying it's China's 'sovereign right' to control materials with both civilian and military get this over the line, the Pentagon will also loan MP Materials $150 million to expand heavy rare earth separation at Mountain Pass. Together with the new plants, this should help the US make everything from wind turbines to MRI scanners without relying on a single foreign one's pretending it's cheap or quick. Rare earth prices don't make new mines profitable on their own. Government support makes the risk worth it. MP Materials' shares shot up over 50% after the deal, adding to an already impressive 92% gain this is about turning American rocks into American jobs and resilience. It's about building a full supply chain that can fuel clean energy, advanced tech and national defence — without strings pulled in real value here isn't just the minerals buried under Mountain Pass. It's the bet that a strategic resource can stay American, even when the global market wants the cheapest bidder. If it works, the magnets spinning inside future Teslas, wind turbines and fighter jets will come with a stamp that says: Made in the USA.
Time of India
7 days ago
- Business
- Time of India
Magnets, Missiles and Mines: How MP Materials became the Pentagon's secret rare earths weapon for next-gen arms
The US government is stepping in to stop a quiet but serious chokehold: China controls about 70% of the world's rare earth mining and 90% of the refining capacity. These minerals — like neodymium and praseodymium — sit inside the permanent magnets that make electric cars move, phones buzz, and fighter jets fly. Without them, the modern world jams up. MP Materials runs the only operational rare earths mine in America, at Mountain Pass, California. To keep it alive and expanding, the Department of Defense will spend $400 million on new preferred shares, giving it around a 15% stake in the company. JPMorgan and Goldman Sachs are adding $1 billion more to help build the next phase. A guaranteed market for a fragile industry The real kicker is the safety net. For the next decade, the US government guarantees MP Materials at least $110 per kilogram for its neodymium and praseodymium output. If prices sink below that, taxpayers cover the gap. If prices rise above, the government gets 30% of the profit. As CEO James Litinsky put it, 'The taxpayers are going to make a lot of money.' It's a tough deal. But without it, the whole operation risks collapse under China's low-cost competition. The Pentagon also gets every magnet MP's new plant makes for 10 years — enough to feed both military and commercial demand. A second Magnet plant on the way Mountain Pass alone can't do it all. So MP Materials will build a second magnet factory, the '10X Facility,' alongside its existing Texas project. Once the new site starts running in 2028, America's home-grown magnet output should hit 10,000 metric tons a year. The goal is clear: end the need to ship mined ore to China just to buy it back as finished magnets. Live Events Litinsky called it a 'public-private partnership' that ties national security to business survival. He told investors, 'We understand that this partnership is ultimately on behalf of the taxpayers and our national security, and with that comes a great responsibility to get this done right.' Trade wars and tariffs: How we got here This isn't just about economics. It's a strategic fight. China's near-total control of rare earths lets it squeeze supply at will. Last year, Beijing slapped new export rules on these critical minerals, just as tariffs rose on both sides of the Pacific. MP used to ship its entire output to Shenghe Resources, a Chinese company partly owned by the state. But tariffs as high as 125% killed that deal. Now, the US is forcing a break from that loop. Doug Burgum, US Interior Secretary, summed up the stakes in April: America must 'break dependence on China' for materials that end up in F-35s, drones and submarines. Europe's parallel push It's not just the US feeling the heat. The European Parliament branded China's export controls 'unjustified' and 'intended to be coercive.' They want the EU to speed up its Critical Raw Materials Act to slash dependence on foreign imports. China's foreign minister brushed off the backlash, saying it's China's 'sovereign right' to control materials with both civilian and military uses. Big plans, big bets To get this over the line, the Pentagon will also loan MP Materials $150 million to expand heavy rare earth separation at Mountain Pass. Together with the new plants, this should help the US make everything from wind turbines to MRI scanners without relying on a single foreign refiner. No one's pretending it's cheap or quick. Rare earth prices don't make new mines profitable on their own. Government support makes the risk worth it. MP Materials' shares shot up over 50% after the deal, adding to an already impressive 92% gain this year. This is about turning American rocks into American jobs and resilience. It's about building a full supply chain that can fuel clean energy, advanced tech and national defence — without strings pulled in Beijing. The real value here isn't just the minerals buried under Mountain Pass. It's the bet that a strategic resource can stay American, even when the global market wants the cheapest bidder. If it works, the magnets spinning inside future Teslas, wind turbines and fighter jets will come with a stamp that says: Made in the USA.
Yahoo
15-05-2025
- Politics
- Yahoo
Trump Argues Immunity in Fight With Truth Social Co-Founders
(Bloomberg) — Lawyers for President Donald Trump argued to a Delaware judge that a suit against him by the co-founders of his Truth Social platform should be dismissed or put on hold because he has immunity from such litigation while in office. As Coastline Erodes, One California City Considers 'Retreat Now' How a Highway Became San Francisco's Newest Park Maryland's Credit Rating Gets Downgraded as Governor Blames Trump Power-Hungry Data Centers Are Warming Homes in the Nordics NYC Commuters Brace for Chaos as NJ Transit Strike Looms Delaware Chancery Court Judge Lori Will heard arguments Thursday in the case brought last year by Andy Litinsky and Wes Moss, two ex-contestants on The Apprentice who partnered with Trump to launch Truth Social but say he later tried to unfairly dilute their 8.6% stake in the company and cut them out of its initial public offering. Though the US Supreme Court last year said presidents have presumptive immunity from criminal prosecution over officials acts, it has also previously ruled that sitting presidents are not shielded from civil suits in federal court over acts that predate their time in office. Trump has frequently argued, though, that he is immune from lawsuits in state courts. 'Delaware should not open the door' to allowing Trump's political opponents to ensnare him in state-court suits, John Reed, one of Trump's lawyers, told Will at the hearing. He noted Trump has been personally named as a defendant in 14 suits during the first five months of his term. Litinsky and Moss were present in the Wilmington, Delaware, courtroom to hear arguments in their case. Lawyers for the pair have countered in filings that the Supreme Court never concluded presidents must be shielded from civil suits while in office and called Trump's assertion of immunity a bid to 'obfuscate and delay' the case. They also noted that Trump is currently countersuing Litinsky and Moss in Florida. 'Trump is actively litigating claims as a plaintiff in state and federal court without raising presidential immunity,' the lawyers said. 'He should not be permitted to use this (non-existent) immunity as both a sword and a shield.' Though judges were largely skeptical of Trump's claims of civil immunity during his first term, they frequently deferred to his busy schedule as president in delaying cases against him. Litinsky and Moss' suit also names as defendants Truth Social directors Donald Trump Jr., FBI Director Kash Patel and ex-Congressman Devin Nunes. Litinsky and Moss sold about 11 million shares in Truth Social last year — worth around $150 million at the time — after a lock-up on the stock expired. They claim in the suit that they deserve more for shepherding the platform's going public. Trump vowed not to sell any of his 60% stake in the platform, which lost billions in value after it went public, but shot up after his election. The Delaware case is United Atlantic Ventures v. Trump Media, 2024-0184, Delaware Chancery Court (Wilmington). Cartoon Network's Last Gasp DeepSeek's 'Tech Madman' Founder Is Threatening US Dominance in AI Race As Nuclear Power Makes a Comeback, South Korea Emerges a Winner Why Obesity Drugs Are Getting Cheaper — and Also More Expensive Tariffs Won't Reindustrialize America. Here's What Will ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
