Latest news with #MPMaterials
Yahoo
16 hours ago
- Business
- Yahoo
Rare Earths Rally After the Pentagon Picks a Winner
Shares of rare earths companies have exploded higher since MP Materials (NYSE:MP) unveiled a game-changing deal with the U.S. Department of Defense that marks the most aggressive federal intervention in the rare earths space in decades. The DoD-backed investment package will see the Nevada-based producer build out a fully domestic magnet supply chain and lock in long-term pricing support for neodymium-praseodymium, the critical alloy used in everything from fighter jets to iPhones. MP shares have doubled in just days, taking year-to-date gains north of 275% and re-rating the entire Western rare earths complex. The deal isn't just about cash; it's about control. Under the agreement, the Pentagon will take a 15% equity stake in MP through a $400 million preferred share issuance and secure warrants for additional common stock down the road. The government is also extending a $150 million loan, while JPMorgan and Goldman Sachs are syndicating $1 billion in private financing to bring MP's so-called '10X Facility' online. Construction is already underway, with commissioning slated for 2028. The real deal sweetener is a $110/kg floor price guarantee for NdPr magnets, nearly double today's spot price of $63. That pricing mechanism, backed by the full faith and credit of the U.S. government, creates a bulletproof margin environment for domestic producers and resets the cost basis for long-term buyers across defense, autos, and consumer electronics, according to Reuters. Analysts say it's the rare earths equivalent of a strategic petroleum reserve, but for permanent magnets. MP's planned capacity of 10,000 metric tons per year will cover a significant chunk of U.S. magnet demand and more than double current domestic output. For defense planners, the numbers are even more compelling: that volume would be enough to secure magnet supply for the entire F-35 fleet, major missile systems, and naval sonar applications—all without touching Chinese exports. The move immediately drew follow-on activity. Apple Inc. said it would invest $500 million to source NdFeB magnets from MP made entirely from recycled feedstock. The tech giant, which has faced mounting scrutiny over its reliance on Chinese rare earths, said production would begin in 2027 and ramp up to cover 'hundreds of millions' of devices per year. Apple will source from MP's upgraded facility in Mountain Pass, California, and its soon-to-be-operational Texas plant, using material pulled from discarded devices and scrap. The Apple deal adds enormous commercial legitimacy to MP's scale-up and underscores the trend toward localization at the OEM level. Recycled magnet manufacturing has long been viewed as a technical curiosity. Now it's a $500 million line item on Apple's strategic sourcing agenda. Meanwhile, rare earth equities have gone vertical. Lynas Rare Earths (OTCPK:LYSDY) surged to a two-year high after Jefferies hiked its price target from A$6.40 to A$10, calling the company 'the next logical beneficiary' of U.S.-led reshoring. Iluka Resources exploded 30% in a single session—its biggest one-day gain on record—as investors rotated into any name with near-term capacity outside China. Australian juniors like Liontown and Sayona also caught a bid. MP added to the frenzy by announcing a $500 million common stock offering to fund continued expansion and working capital—triggering a minor pullback in the stock but doing little to dent the broader narrative. Capital is pouring into rare earths like it's 2011. Defense contractors were quick to endorse the move. Lockheed Martin, prime contractor for the F-35, said it welcomed efforts to 'strengthen secure, resilient supply chains.' Analysts say the move will de-risk magnet inputs for THAAD batteries, Virginia-class submarines, and next-gen missile systems. At the industrial level, General Motors and Stellantis are evaluating new sourcing options for permanent magnet EV motors as they accelerate domestic platform rollouts. What sets this deal apart is its structure. Rather than handing out tax credits or indirect subsidies, the U.S. government is writing equity checks, underwriting price floors, and letting commercial lenders come in behind. The structure resembles the CHIPS Act, but more serious. Analysts say this model could be replicated for battery anodes, graphite, and even gallium. Still, execution risks loom. MP will need a reliable pipeline of rare earth oxide feedstock, and while it has upstream capability at Mountain Pass, questions remain about whether that will scale fast enough. Labor and permitting hurdles in both California and Texas could delay full ramp-up. And there's the broader question of how quickly defense and OEM contracts can be converted into long-term offtake agreements. As of mid-July 2025, Beijing has remained quiet. No official response from the Chinese government or state media has been issued in response to the Pentagon-MP announcement. That silence is notable. In 2024, Chinese officials warned against 'artificially constructing supply chains' without China. That language has not been repeated publicly this year. But observers note that China's influence remains concentrated in refining, oxide conversion, and separation, areas where Western capacity still lags. Any serious U.S. effort to localize rare earths will inevitably collide with these structural realities, and Beijing may yet respond through informal levers like export permit delays or price manipulation. By Alex Kimani for More Top Reads From this article on 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
Canada News.Net
18 hours ago
- Business
- Canada News.Net
Apple signs major US rare earth magnet deal with MP Materials
CUPERTINO, California: Apple has signed a US$500 million supply agreement with MP Materials for rare earth magnets, a strategic move to secure critical components for its devices and reduce reliance on China-based supply chains. The multi-year deal includes a $200 million prepayment to MP Materials. Starting in 2027, MP Materials will supply Apple with magnets produced at its Fort Worth, Texas, facility. The magnets will be manufactured using materials recycled from MP's Mountain Pass mining site in California. "Rare earth materials are essential for making advanced technology, and this partnership will help strengthen the supply of these vital materials here in the United States," said Apple CEO Tim Cook. The agreement aligns with the Trump administration's push to move electronics production and critical mineral sourcing away from China. It follows news last week that the U.S. Department of Defense struck a multibillion-dollar deal with MP Materials, effectively making the Pentagon its largest shareholder and financial backer. MP shares surged 19 percent on the news, while Apple's stock rose slightly. Rare earths, a group of 17 metals, are key to manufacturing magnets used in electronics, electric vehicles, and defense systems. China, the dominant global supplier, temporarily halted rare earth exports in March following a trade dispute with President Trump. The disruption highlighted the vulnerability of U.S. supply chains and increased urgency for domestic alternatives. Apple said the MP deal is part of its $500 billion four-year investment in the U.S. economy. The company has faced pressure from Trump to localize iPhone production, though many experts say full-scale domestic assembly remains unlikely due to cost and supply chain complexity. "This move makes complete sense," said Bob O'Donnell, president of TECHnalysis Research. "By focusing on a U.S.-based supplier, it does help position Apple more positively in Washington."
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Business Standard
a day ago
- Business
- Business Standard
Low value, high stakes: Why nations are racing to mine rare earth minerals
Even though the global rare earth elements (REE) market is relatively small, estimated at $3.5 billion in 2024, nations are racing to secure reserves and develop domestic supply chains. Prices for key elements like neodymium-praseodymium (NdPr) have been volatile and low, making purely commercial ventures unattractive without state support. Still, governments view rare earths as critical to national security and high-tech industries like defense systems, wind turbines, EV motors, and consumer electronics rely on them. This explains why the Pentagon pledged $400 million investment in MP Materials and a 10-year price-floor guarantee of $110 per kg for NdPr, nearly double current rates, as reported by the Financial Times. China's rise to rare earth processing dominance China's position evolved through geological advantages and decades of strategy. With massive ion-adsorption clay deposits, easier and affordable to extract and process, the country targeted both mining and midstream refining from the 1980s onwards. Deng Xiaoping declared in 1992: 'While there is oil in the Middle East, China has rare earths.' That vision guided state-backed subsidies, lax environmental regulations, and vertical integration, from mining to finished magnets. Today, China controls 90–95 per cent of global REE refining and processing capacity. The 2010 export restrictions to Japan highlighted the leverage China holds: prices spiked five- to seven-fold, even though rare earths are not geologically scarce, but economically rare. Why were other countries slow to compete? Mining and refining REEs involves high costs, environmental risks, and technical complexity. Western firms exited in the early 2000s; notably, the US's Mountain Pass mine shut in 2002 due to stricter environmental rules. Processing facilities also generate 2,000 tonnes of toxic and radioactive waste per tonne of rare earths. Mining and processing rare earths face three major constraints namely: Low market value: Annual US import value stands at only $200 million. High pollution: Processing leads to extreme pollution — generating toxic and radioactive waste. Low return on investment: Investments in mining hard rock and ionic clay are significant but yield thin margins due to low prices. With tight margins and low prices, only China was willing to absorb these costs. In contrast, Western miners focused on extraction but lacked downstream separation infrastructure. Are rare earths worth more strategically? In 2023, the United States imported approximately 400 tonnes of rare-earth metals, valued at $22.1 million. In addition, it imported around 10,530 tonnes of rare earth compounds, worth $186 million, according to Statista and the World Integrated Trade Solution database. In 2024, US imports of rare earth compounds remained around 10,530 tonnes, with their value estimated between $151.08 million and $170 million. Of this, approximately 74.5 per cent of the imports by value came from China. In the European Union, 2023 imports of rare earth minerals stood at 18,300 tonnes, worth €123.6 million, with 39 per cent of the total volume supplied by China. In 2024, imports into the EU declined sharply to 12,900 tonnes, a 29 per cent decrease, with China's share rising to 46.3 per cent. Russia and Malaysia also contributed significantly to Europe's rare earth supply. India eyes security in REE imports India's rare earth imports in 2023 were between 1,085 tonnes (narrower product category) and 2,270 tonnes (broader category), with the total value ranging between $4.9 million and $5.84 million. The majority of these imports originated from China. In 2024, India's imports were around 2,270 tonnes, though the financial value for the year has not been specifically disclosed. Though trade values are modest, the geo-political stakes are high. A single F-35 jet, for instance, contains hundreds of kilograms of rare earths. Export controls, such as China's 2023–24 restrictions on seven heavy REEs, show how supply can be weaponised. China has previously leveraged these restrictions as well: During 2010, global prices rose dramatically and Japan scrambled for alternatives. Similar patterns repeated in recent US-China tensions. Why are govts backing projects like MP Materials? State support is essential to offset the non-commercial nature of rare earth refining. In the US, the Pentagon's $400 million stake in US rare-earth materials company MP Materials and guarantee of 7,000 tonnes of magnet purchases annually give the company financial viability, according to the Financial Times. Apple has committed up to $500 million for future magnet orders. Additionally, the Pentagon will take 15 per cent equity in MP and underwrite a minimum $110 per kg floor price for NdPr (neodymium-praseodymium). These policies aim to spark magnet-grade rare earths production capacity and Vietnam, Australia, and Canada are following suit. How are other countries responding to China's monopoly? The US is ramping up domestic projects (MP Materials, Fort Worth magnet plant, second facility for 10,000 tonnes per year capacity) according to The Wall Street Journal. Meanwhile, the EU, Japan, France, and South Korea are funding new separation plants. India, which is home to 6.9 million tonnes of REE reserves (third globally), has produced only 2,900 tonnes per year from 2012-2024, but is now aggressively investing in mining and refining partnerships through its National Critical Mineral Mission. Australia, Vietnam, Brazil, and emerging players like Greenland are also positioned to diversify the supply chain, though most need 5-10 years and billions of dollars to establish full processing capabilities. Challenges ahead in rare earth supply diversification Building end-to-end rare earth supply chains remains time-consuming, capital-intensive, and environmentally fraught. Western nations face stricter environmental rules and higher energy costs. Even with state support, it may take years, estimated to be from five to 10 years, to reach China-level processing. Furthermore, China's ability to dump excess capacity, driving down prices and squeezing new entrants, remains a powerful barrier. Without coordinated policies, such as guaranteed offtake, subsidies, and strategic reserves, Western producers will struggle to compete. Is the rare earth race driven by strategy, or profit? While REE trading generates modest revenue, their strategic value far outweighs market price. Governments are investing not to chase profits, but to mitigate geopolitical risk, secure defence-relevant supply, and support green-tech independence. As demand for high-performance magnets and critical defence components grows, countries will continue the strategic pursuit even when unit values remain low as it is not about immediate profits but about geo-political insurance in a world increasingly defined by high-tech competition and resource security.
Yahoo
2 days ago
- Business
- Yahoo
Watch These MP Materials Price Levels After Apple, DOD Investments Send Stock Soaring
Key Takeaways MP Materials shares remain in focus after soaring 20% yesterday on news that Apple plans to invest $500 million in the rare earths firm, news that came just days after the Department of Defense took a stake in the company. The price recently staged a volume-backed breakaway gap above a flag pattern, accelerating the stock's uptrend. The bars pattern tool, which extracts the bars comprising the stock's impulsive move higher that preceded the flag pattern and overlays them from last Thursday's breakaway gap, projects a bullish price target of around $85. Investors should watch major support levels on MP Materials' chart around $39 and $ Materials (MP) shares remain in focus after soaring 20% yesterday on news that Apple (AAPL) plans to invest $500 million in the rare earths firm. The company will supply metals to Apple as part of the tech giant's pledge to spend more than $500 billion in the U.S. over the next four years. The news of the Apple commitment came just days after the Department of Defense took a 15% stake in the US's only rare earths producer as Washington makes becoming less dependent on nations like China for rare earths a top priority and a national security issue. MP Materials shares have surged nearly four-fold since the start of the year and are up 70% this month alone. The stock was down 1.5% at around $57 in afternoon trading Wednesday. Below, we take a closer look at MP Materials' chart and apply technical analysis to identify major price levels worth watching out for. Flag Pattern Breakout After hitting their June peak, MP Materials shares retraced within a flag toward the 50-day moving average (MA). More recently, the price staged a volume-backed breakaway gap above the pattern, accelerating the stock's uptrend. While the relative strength index confirms bullish price momentum, it also flashes a reading above 80 to signal extremely overbought conditions. Let's analyze MP Materials' chart to forecast where the stock's move higher may be headed next, and also point out two major support levels worth watching during profit-taking. Where to Next for MP Materials Shares? Investors can use the bars pattern tool to forecast a near-term bullish price target for the stock. When applying the technique to MP Materials' chart, we extract the bars comprising the impulsive move higher that preceded the flag pattern and overlay them from last Thursday's breakaway gap. The analysis, which forecasts a potential continuation move, projects a target of around $85. In terms of duration, the prior trend analyzed played out over 15 trading days, meaning the current strong move higher could last until the end of this month if price action rhymes. Major Support Levels Worth Watching During profit-taking in the stock, investors should initially watch the $39 level. This area on the chart could provide support near last month's high, which also marks the flag pattern's peak. Finally, a more significant retracement in MP Materials shares could see the price revisit lower support around $30, a level currently sitting just above the 50-day MA. Investors may seek entry points in this region near the base of the flag pattern and April swing high. The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info. As of the date this article was written, the author does not own any of the above securities. Read the original article on Investopedia Sign in to access your portfolio
Yahoo
2 days ago
- Business
- Yahoo
Why USA Rare Earth Stock Gave Up Some Gains Today
Key Points MP Materials is signing rare earth magnet deals left and right. USA Rare Earth... isn't. MP Materials has revenue and a path to profit. Meanwhile, USA Rare Earth has some optimistic forecasts, but no revenue. 10 stocks we like better than Usa Rare Earth › Rare earths mining start-up USA Rare Earth (NASDAQ: USAR) stock has been on a roll this past week. Ever since rival miner MP Materials (NYSE: MP) signed its $400 million investment deal with the U.S. Department of Defense last week, investors have been betting that USA Rare Earth might be next in line to collect those sweet, sweet government subsidies for itself. But that's looking like an increasingly bad bet. USA Rare Earth is no MP Materials Shares of USA Rare Earth stock are down 7.1% through 1:55 p.m. ET Wednesday, and the reason is simple: USA Rare Earth is not MP Materials. Not even close. In contrast to MP, which has active rare earths mining operations, a refining business gearing up, and a nascent rare earth magnets business too -- all generating more than $200 million in revenue last year, expected to grow that number 30% this year, and then nearly double revenue in 2026 -- USA Rare Earth collected revenue of zero dollars, zero cents last year. This year should be similar, and while revenue may begin in 2026, it's unclear when, if ever, USA Rare Earth stock will turn profitable. Adjusted profits are expected in 2028, but no analysts have a date for when USA Rare Earth might earn a generally accepted accounting principles (GAAP) profit. Is USA Rare Earth stock a sell? Meanwhile, MP Materials has signed the Pentagon to a 10-year deal to buy rare earth magnets at guaranteed prices. And just yesterday, MP announced a separate, $500 million partnership with Apple to buy even more of its magnets. With every passing day, it becomes clearer which rare earth stock both government and corporate America prefer to partner -- and its name isn't "USA Rare Earth." Should you invest $1,000 in Usa Rare Earth right now? Before you buy stock in Usa Rare Earth, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Usa Rare Earth wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $679,653!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,046,308!* Now, it's worth noting Stock Advisor's total average return is 1,060% — a market-crushing outperformance compared to 179% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 15, 2025 Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple. The Motley Fool recommends MP Materials. The Motley Fool has a disclosure policy. Why USA Rare Earth Stock Gave Up Some Gains Today was originally published by The Motley Fool 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
