MP Materials explained

MP Materials Corp.
Type:Public company
Area Served:Worldwide
Key People:James Litinsky

Michael Rosenthal
Products:Rare earth concentrates,[1] metals,[2] and neodymium magnets[3]
Production Year:2020
Production:38,500 tonnes[4]
Owner:JHL Capital Group, QVT Financial LP, James Litinsky, Shenghe Resources[5]
Num Employees:681[6]
Num Employees Year:2024[7]
Footnotes:[8] [9]

MP Materials Corp. is an American rare-earth materials company headquartered in Las Vegas, Nevada. MP Materials owns and operates the Mountain Pass mine, the only operating rare earth mine and processing facility in the United States.[10] The rare earth materials industry is dominated by China, which produces 60% of the world's rare earth elements and processes 90% of these materials, including imports from other countries.[11] MP Materials focuses its production on Neodymium-Praseodymium (NdPr), a rare earth material used in high-strength permanent magnets that power the traction motors found in electric vehicles, robotics, wind turbines, drones and other advanced motion technologies.[12] MP Materials is listed on the New York Stock Exchange under the ticker symbol "MP". As of December 2021, JHL Capital Group, QVT Financial and CEO James Litinsky were the company's three largest shareholders, with about 7.7% of the company owned by Shenghe Resources, a Chinese rare earth business located in Sichuan.[13]

History

In 2015, Molycorp, the previous owners of the Mountain Pass mine, filed for bankruptcy. At the time, it was the only U.S. producer of rare earth elements.[14] While in bankruptcy, Secure Natural Resources (SNR), a company owned by Molycorp's creditors, including JHL Capital Group, gained control of the mine's mineral rights.[15] In June 2017, the Mountain Pass mine was purchased at auction for $20.5 million by a new entity called MP Mine Operations LLC (MPMO).[16] MPMO was a consortium formed principally by JHL Capital Group, a Chicago-based investment firm led by James Litinsky, along with QVT Financial LP and Shenghe Resources.[17] Shenghe, a Sichuan China rare earth company, held a minority, non-voting interest.[18] At the time, Mountain Pass was in a state of "care and maintenance" and had only eight employees according to Litinsky.[19]

Following the asset acquisitions and formation of the entities that became MP Materials, the company restarted operations at Mountain Pass. On July 15, 2020, the company announced a reverse takeover whereby MPMO and SNR would be merged with Fortress Value Acquisition Corporation to become a public company under the name MP Materials Corp. The transaction, which closed on November 17, 2020, raised $545 million.[20] On November 18, 2020, MP Materials began trading on the New York Stock Exchange under the symbol "MP".

In December 2021, MP Materials signed a long-term agreement with General Motors to provide neodymium-iron-boron magnets for use in GM's electric vehicle motors.[21] As part of the contract, MP Materials also agreed to provide alloy and finished magnets to GM for its electric vehicles[22] and to open a new factory located in Fort Worth, Texas to produce the magnets.[23]

As of December 2021, JHL Capital Group, QVT Financial, and CEO James Litinsky were the company's three largest shareholders, and about 7.7% of the company was owned by Shenghe Resources, a Chinese company.[13] [24] [25] [26] [27] Apart from institutions, other investors own 18%.[24]

MP Materials and Australia's Lynas held a confidential discussion regarding a potential merger which fell through on February 5, 2024.[28] Lynas is the second largest rare earth material company outside of China.

In April 2024, Australian mining magnate Gina Rinehart disclosed a 5.82% stake in Lynas Rare Earths and a 5.3% stake in MP Materials. She currently holds 8.8 million shares.[29]

Mountain Pass mine

See main article: Mountain Pass mine. Discovered in 1949 in San Bernardino County, California, Mountain Pass mine consists of a bastnäsite ore-body with significant concentrations of rare earth elements.[30] The mine once supplied most of the world's rare earth elements.[31] Mountain Pass is the only operational rare earth mining and processing facility in the United States. The expected Mountain Pass mine life is approximately 24 years.[32] MP Materials produced 28,000 tonnes of rare-earth oxide equivalent from Mountain Pass in 2019, and 38,500 tonnes in 2020, or more than 15% of global production. As of late 2020, Shenghe Resources was the sole purchaser of MP Material's rare earth concentrate.[33] [34]

MP Materials has a three-phase plan for producing and scaling its operations:[35]

As of 2024, the company had completed stage I and had begun working on stage II.[36]

U.S. government contracts

In July 2020, the United States Department of Defense issued a preliminary contract to MP Materials intended to restore domestic heavy rare earth production and separation capabilities to the United States.[37] [38] In November 2020, the United States Department of Defense awarded MP Materials $9.6 million as part of a government effort to increase domestic production of rare earth materials.[39] [40]

On September 30, 2020, President Donald Trump issued an executive order targeting China's dominance of rare earth materials. In the executive order, he expressed concern for the heavy reliance of the US on China for 80 percent of rare earth materials. He reiterated the importance of producing and refining rare earth in the US and discussed various tariffs and government grants to rare earth material companies such as MP Materials.[41] [42] [43]

In 2021, MP Materials received $3 million in funding from the United States Department of Energy to design and study the feasibility of a system to produce rare earth oxides and metals from coal by-products in collaboration with the University of Kentucky.[44] [45]

In February 2022, U.S. President Joe Biden announced at a press conference that the United States Department of Defense was investing $35 million into MP Materials as part of an effort to spur domestic rare earth production in the United States.[46] [47] Biden said that this move was designed to reduce America's reliance on rare earth minerals imported from other countries.[48] [49] The Biden administration said the federal funding is earmarked to assist the company to develop a new commercial facility for “heavy” rare earth mineral processing.

On May 24, 2024, the Biden Administration announced a 25 percent tariff on rare earth magnets from China, set to take effect in 2026. This marks the first time that critical minerals, including rare earth magnets, have been specifically included in the tariffs.[50] Following the tariffs MP Materials put out a statement listing the tariffs. After the announcement, CEO James Litinsky attended an event with Biden at the White House.[51]

See also

Notes and References

  1. News: Khan . Yusuf . The U.S. Wants a Rare-Earths Supply Chain. Here’s Why It Won’t Come Easily. . 14 April 2024 . The Wall Street Journal . 25 April 2023 . https://web.archive.org/web/20240414210058/https://www.wsj.com/articles/the-u-s-wants-a-rare-earths-supply-chain-heres-why-it-wont-come-easily-dfc3b632 . 14 April 2024.
  2. News: Seligman . Lara . China Dominates the Rare Earths Market. This U.S. Mine Is Trying to Change That. . 10 May 2024 . Politico . 14 December 2022 . https://web.archive.org/web/20221214114150/https://www.politico.com/news/magazine/2022/12/14/rare-earth-mines-00071102 . 14 December 2022.
  3. News: Cardona . Megan . MP Materials magnet manufacturing facility to bring over 100 jobs to North Texas . 21 May 2024 . Fort Worth Star-Telegram . 10 December 2021.
  4. News: Zhou . Jackie . US seeks to challenge China on rare-earth elements, key ingredients in Biden's energy plan . 12 July 2021 . Fox Business . 9 May 2021.
  5. Web site: Could The MP Materials Corp. (NYSE:MP) Ownership Structure Tell Us Something Useful? . Simply Wall Street . 20 August 2021.
  6. Web site: MP Materials Corp. . Yahoo! Finance . 21 May 2024.
  7. News: Burke . Taylor . Cortez Masto looking to strengthen domestic green energy, rare-earth elements supply chain dominated by China . 14 April 2024. KOLO 8 (ABC) . 15 January 2024 . https://web.archive.org/web/20240414213302/https://www.kolotv.com/2024/01/16/cortez-masto-looking-strengthen-domestic-green-energy-rare-earth-elements-supply-chain-dominated-by-china/ . 14 April 2024.
  8. Web site: MP Materials Corp 2020 Form 8-K Quarterly Report . . January 31, 2021 . November 23, 2020 . https://web.archive.org/web/20201123222119/https://sec.report/Document/0001193125-20-301518/ . live .
  9. MP Materials Corp 2020 Q3 Summary . . January 31, 2021 . February 4, 2021 . https://web.archive.org/web/20210204220718/https://www.sec.gov/Archives/edgar/data/1801368/000119312520301512/d88445dex991.htm . live .
  10. News: The Californian Rare Earths Mine Caught Between Trump and China . Bloomberg News . September 27, 2018 . January 31, 2021 . February 4, 2021 . https://web.archive.org/web/20210204114746/https://www.bloomberg.com/news/articles/2018-09-27/the-californian-rare-earths-mine-caught-between-trump-and-china . live .
  11. Web site: Treadgold . Tim . Rinehart’s New Attack On China’s Rare Earth Dominance . 2024-06-18 . Forbes . en.
  12. News: MP Materials CEO says rare magnets supplier is a 'picks-and-shovels play' for EV market . CNBC . December 16, 2020 . January 31, 2021 . February 6, 2021 . https://web.archive.org/web/20210206073149/https://www.cnbc.com/2020/12/16/mp-materials-ceo-on-being-a-picks-and-shovels-play-for-ev-market.html . live .
  13. Web site: MP MATERIALS CORP. (MP) . MarketScreener . 18 July 2022.
  14. News: Miller . John W. . Zheng . Anjie . Molycorp Files for Bankruptcy Protection . 12 July 2021 . Wall Street Journal . 25 June 2015.
  15. 2022-10-03.
  16. 2022-10-03.
  17. News: Hudson . Sabrina . Mine near Las Vegas produces much of world's rare earth materials . 12 July 2021 . Las Vegas Review Journal . 29 May 2021.
  18. News: Topf . Andrew . Mountain Pass sells for $20.5 million . 13 July 2021 . Mining.com . 16 June 2017.
  19. News: James Litinsky CEO of MP Materials on the Company's NYSE Debut . TD Ameritrade Network . November 18, 2020 .
  20. News: Gupta . Ruchi . Is MP Materials Stock a Good Investment? . 9 August 2021 . Market Realist . 19 November 2020.
  21. News: Root . Al . GM Keeps Building Up Its EV Supply Chain. Here's the Latest Deal. . 26 January 2022 . Barrons . 9 December 2021.
  22. News: Stankiewicz . Kevin . MP Materials CEO says GM partnership key to building EV supply chain in U.S. . 26 January 2022 . CNBC . 9 December 2021.
  23. News: GM reaches supply deals for electric vehicle motor magnets . 26 January 2022 . AP . 9 December 2021.
  24. News: MP Materials Corp. (MP). Market Screener. Surperperformance. Annecy, France. 28 February 2021.
  25. News: Xie. John. December 31, 2020. California Mine Becomes Key Part of Push to Revive US Rare Earths Processing. Voice of America. live. December 31, 2020. https://web.archive.org/web/20201231184831/https://www.voanews.com/usa/california-mine-becomes-key-part-push-revive-us-rare-earths-processing. December 31, 2020.
  26. News: Hui. Mary. February 5, 2021. The US is taking steps towards breaking China's rare earths monopoly. Quartz. live. February 13, 2021. https://web.archive.org/web/20210210112141/https://qz.com/1969069/the-us-takes-steps-to-break-chinas-rare-earths-monopoly/. February 10, 2021.
  27. Web site: Shenghe Resources Holding Co. Ltd: Shareholders Board Members Managers and Company Profile. 2021-02-14. MarketScreener. en.
  28. Web site: Kalinic . Stjepan . MP Materials, Lynas Rare Earths Merger Falls Through - Lynas Rare Earths (OTC:LYSCF), MP Materials (NYSE:MP) . 2024-06-18 . Benzinga . English.
  29. Web site: Australian magnate Rinehart takes stake in US miner MP Materials .
  30. News: Rare Earth Elements—Critical Resources for High Technology . US Geological Survey . May 17, 2005 . January 31, 2021 . January 25, 2021 . https://web.archive.org/web/20210125004930/https://pubs.usgs.gov/fs/2002/fs087-02/ . live .
  31. News: The collapse of American rare earth mining — and lessons learned . Defense News . November 12, 2019 .
  32. Web site: MP Materials Corp 2020 SEC Form S1. live. https://web.archive.org/web/20210204110130/https://sec.report/Document/0001193125-20-313937/. February 4, 2021. January 31, 2021. U.S. Securities and Exchange Commission.
  33. News: Hui. Mary. February 19, 2021. A Chinese rare earths giant is building international alliances worldwide. Quartz. July 13, 2021.
  34. Web site: MP Materials Corp Form S-1 Registration Statement . Security and Exchange Commission . 12 August 2021 . 9 . 9 December 2020.
  35. Web site: mp-20221231 . 2024-06-18 . www.sec.gov.
  36. Web site: MP Materials Reports First Quarter 2024 Results .
  37. News: Scheyder. Ernest. 2020-07-22. Pentagon resumes rare earths funding program after review. en. Reuters. 2021-03-16.
  38. Web site: MP Materials Corp 2020 Q3 Investor Q&A . . January 31, 2021 . February 4, 2021 . https://web.archive.org/web/20210204093652/https://www.sec.gov/Archives/edgar/data/1801368/000119312520195045/d92932d425.htm . live .
  39. News: U.S. rare earths miner MP Materials profit surges in first results post listing . 13 July 2021 . Reuters . 23 November 2020.
  40. News: China May Ban Rare Earth Tech Exports on Security Concerns . 13 July 2021 . Bloomberg News . 19 February 2021.
  41. Web site: Gould . Joe . Mehta . Aaron . 2020-10-01 . Trump executive order targets rare earths minerals and China . 2024-06-18 . Defense News . en.
  42. Web site: Executive Order on Addressing the Threat to the Domestic Supply Chain from Reliance on Critical Minerals from Foreign Adversaries – The White House . 2024-06-18 . trumpwhitehouse.archives.gov.
  43. Web site: Trump issues fresh rare earth mining executive order .
  44. News: Hudson . Sabrina . Mine near Las Vegas produces much of world's rare earth materials . 12 July 2021 . Las Vegas Review Journal . 29 May 2021.
  45. News: DOE awards #3M to MP Materials for project to extract rare earths from fossil fuel waste streams . 12 July 2021 . Green Car Congress . 17 May 2021.
  46. News: Scheyder . Ernest . Holland . Steve . Biden voices support for new U.S. mines, if they don't repeat past sins . 1 March 2022 . Reuters . 22 February 2022.
  47. News: Ronayne . Kathleen . Biden wants to cut into China's electric battery dominance . 23 February 2022 . AP . 22 February 2022.
  48. News: Gangitano . Alex . Biden says mineral supply chain actions will help end foreign reliance . 23 February 2022 . The Hill . 22 February 2022.
  49. News: Coppola . Gabrielle . Biden Bets on U.S. Battery Independence . 1 March 2022 . Bloomberg . 26 February 2022.
  50. Web site: Su . Annie . 2024-05-15 . US to impose 25% import tariffs on Chinese rare earth magnets in 2026 . 2024-06-18 . Fastmarkets . en-US.
  51. Web site: Hendrich . Brian . 2024-05-15 . MP Materials, Australia, China: Reaction to the New U.S. Import Tariffs - rawmaterials.net . 2024-06-18 . en-US.

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