Australian Rare Earth Stocks Soar On MP Materials’ Multi-Billion U.S. Deal

Shares of Australian rare earths miners—including Lynas and Iluka Resources—soared on Friday following a multibillion-dollar deal between U.S.-based MP Materials and the U.S. government to boost production of rare earth magnets, John Biju reported for Reuter.

Under the deal, the DoD will become the largest shareholder in MP Materials. I Photo: Adamas Intelligence

Lynas Rare Earths, the world’s largest rare earth producer outside China, surged as much as 20% to its highest level since mid-August 2022, and was poised for its best trading day since April 2020.

Iluka jumped 27%, marking its biggest intraday gain ever.

The two companies led gains on the benchmark ASX 200, which edged higher as of 05:58 GMT. The deal with the U.S. Department of Defense (DoD) lifted sentiment across the sector.

The agreement follows China’s recent move to restrict rare earth exports, which caused a 75% drop in magnet exports last month and forced several automakers to suspend production.

Rare earths—comprising 17 critical metals—are essential in manufacturing magnets used in electric vehicles, military equipment, and consumer electronics.

Under the deal, the DoD will become the largest shareholder in MP Materials and will guarantee a floor price of $110 per kilogram for the two most in-demand rare earth elements, nearly double the current market prices in China.