RARE EARTH FIRM RESURRECTED TO CUT US DEPENDENCE ON CHINA SUPPLY

Once the world’s largest producers of rare earths—a group of 17 minerals crucial in the manufacturing of many high-tech products—it was forced to shut in 2002 in part because it was squeezed out by China’s low prices. In 2015, its owner went bankrupt, Mary Hui reported for the magazine Quartz.

A new owner acquired the mine, and slowly restarted operations. Now, that company, MP Materials, is about to go public on the New York Stock Exchange. Its stated mission: Restore the full rare earth supply chain to the US and eliminate dependence on China, which currently dominates the global rare earth industry.

Under the arrangement, MP Materials is expected to merge this week with a private-equity backed “blank check” company—known more technically as a special purpose acquisition company (SPAC)—after which it will trade under the ticker “MP” in a $1.5 billion deal highlighting investors’ growing interest in the US rare earths industry. MP Materials will net about $500 million in cash to fund upgrades to the Mountain Pass facility, where it’s currently mining elements for ultimate use in magnets critical to the manufacturing of electric vehicles. The SPAC that’s helping take MP Materials public, for example, is controlled by Japan’s SoftBank group. Curiously, Japan has found its own trove of rare earths deep in its territorial seas.

“The task of building a rare earth supply chain that’s more independent from China is a complex one. Just look at MP Materials. It is almost one-tenth owned by a Chinese company, Shenghe Resources. That was enough to prompt concerns from US government scientists over Pentagon funding for MP Materials, though funding has now resumed following a review. Meanwhile, MP Materials currently has to send much of its rare earth concentrates to China for processing because it doesn’t have the capacity to do so itself. The company hopes to process and refine its own rare earths by 2022, so as to keep the entire supply chain on US soil,” Hui reported.