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Having surged over 360% this year, rare earth leader MP has received increased investments from the U.S. Department of Defense and Apple. What other investment opportunities exist in this field?
This year, one company in the U.S. stock market has quietly risen over 360%, far outpacing the AI darling Palantir. This company is the only operator of rare earth mines in the United States— $MP Materials(MP.US)$ 。
MP Materials has received successive investments from the U.S. Department of Defense and tech giant Apple since July, specifically:
July 10: The U.S. Department of Defense will invest $400 million in MP Materials, the sole operator of rare earth mines in the U.S., becoming its largest shareholder. The new factory is expected to be operational by 2028, with an annual production capacity of 10,000 tons. The company has also secured a $1 billion financing commitment from JPMorgan and Goldman Sachs. On that day, the stock price surged over 50%;
July 15: Apple plans to invest $500 million in MP Materials and will procure U.S.-made rare earth magnets from MP Materials' Texas plant. The two parties also plan to build a new factory in Fort Worth, Texas.
August 11: The U.S. Department of Defense announced a $150 million loan to MP Materials for enhancing rare earth separation capabilities at its existing processing plant located in Mountain Pass, California.
Why are the U.S. Department of Defense and tech giant Apple focusing on the rare earth industry? Which other companies in the U.S. stock market are worth paying attention to?
What is the allure of the rare earth industry, and why is there such a rush to get involved?
Rare earth elements are the core that supports the operation of modern technology and defense systems, particularly as the demand for rare earths rises alongside the booming high-tech industries such as electric vehicles, wind power generation, and AI chips.
Rare earth elements possess unique optical properties, and some of them (such as neodymium and terbium) also exhibit strong magnetic characteristics. Based on these properties, rare earths play a critical role in several important fields:
3C Electronics: smartphones, laptops, LCD screens, headphones.
Electric Vehicles: permanent magnet materials at the core of motors significantly affecting range and efficiency.
Renewable Energy: wind turbines, solar panels.
Aerospace Technology: aircraft engines, precision navigation instruments.
Medical Equipment: Magnetic Resonance Imaging (MRI), X-ray machines.
Military Technology: missile guidance, radar systems, aircraft navigation.
Oil Refining: Catalysts enhance fuel efficiency.
CITIC Securities believes that the agreement signed between MP Materials and the U.S. Department of Defense reflects the United States' high regard for the independence of rare earth permanent magnet supply, as well as the high costs of domestically produced neodymium metal, further highlighting the strategic value of rare earth resources. It is noteworthy that currently, China dominates global rare earth supply, accounting for 60% of the world's extraction volume, while in refining and processing, it holds as much as 90% market share.
Which companies in the U.S. stock market are worth paying attention to?
Mooer has compiled a list of rare earth-related companies in the U.S. stock market for mooers' reference:
Undoubtedly, MP Materials is currently the most noteworthy rare earth company in the U.S. stock market. Headquartered in Las Vegas, it is the only rare earth miner in the United States, operating a rare earth mine located in Mountain Pass, California. The company occupies an important position in the rare earth supply chain, especially in the context of the U.S. seeking to reduce reliance on external rare earth supplies.
According to the latest disclosed results, in the second quarter of this year, MP Materials' neodymium oxide production surged by nearly 120%, reaching a record 597 tons. Neodymium is an important rare earth element used in the manufacture of electric vehicle motors and wind turbines.
Brokerage firm DA Davidson stated that MP Materials' third-phase magnetic materials operations have achieved positive EBITDA, and with support from the government and Apple, the company has sufficient funds to accelerate its growth.
Furthermore, the infographic on Apple's official website regarding the "Apple Made in America" initiative indicates that all glass cover panels for iPhones and Apple Watches will be manufactured domestically in the United States. The rare earth magnets produced in the United States will come from MP Materials, and an end-to-end supply chain for chips and core components of consumer electronics will be established in the United States.
Previously"Can MP Materials Become the 'Ace' of the U.S. Rare Earth Industry Chain?"This article also provides a detailed analysis of the company's business; interested mooers can click to view.
USA Rare Earth focuses on developing the Round Top mine in Texas, which is rich in strategically important heavy rare earth elements. This mine is characterized by a high diversity of rare earth element combinations, which can meet the demand for specific heavy rare earth elements and has unique potential for future production of high-performance permanent magnetic materials. However, it is currently in the early stages.
The company also benefits from policy support from the U.S. government, including funding and tax credits under the Defense Production Act. Additionally, in August, the company partnered with ePropelled to develop drone magnets, accelerating commercialization progress.
$Idaho Strategic Resources(IDR.US)$
Idaho Strategic Resources, although primarily a gold producer, has recently ventured into the rare earth elements sector and possesses the largest rare earth element land package in the United States. The company has three rare earth exploration projects in Idaho—Lemhi Pass, Diamond Creek, and Mineral Hill.
The company is currently in the exploration sampling phase. As the United States increasingly emphasizes the development of domestic rare earth resources, the progress of Idaho Strategic Resources in the rare earth sector warrants close attention.
$TEXAS MINERAL RESOURCES CORP(TMRC.US)$
Texas Mineral Resources is a company focused on the exploration and development of rare earth and other mineral resources, actively laying out projects in the rare earth field. The company is collaborating with USA Rare Earth to develop the Round Top mine, holding a 20% stake and having preferential purchasing rights.
Niocorp is a mineral exploration and development company that focuses on critical minerals, with rare earth elements being one of its important business segments.
Recently, the U.S. Department of Defense provided up to $10 million in funding to NioCorp Developments Ltd.'s subsidiary Elk Creek Resources to advance its niobium-tantalum project in Nebraska, establishing a domestic supply chain from mining to manufacturing.
$United States Antimony(UAMY.US)$
United States Antimony is a company focused on the mining, production, and sale of antimony and related products. It also engages in diverse mineral sectors, including rare earth elements, with operations encompassing resource development.
The traditional uranium miner Energy Fuels has successfully transformed into a diversified critical minerals company, currently developing domestic rare earth resources at the White Mesa Mill in Utah, collaborating with Australia's Astron on the Donald rare earth sands project, and strategically acquiring heavy mineral sands (HMS) globally.
The company primarily utilizes mining by-products to extract rare earth elements from monazite to reduce costs and is collaborating with rare earth processor Neo Performance Materials, aiming to enhance rare earth separation processing capacity by 2027.
American Resources is a raw materials and processing company focused on the infrastructure market, concentrating on rare earths, critical minerals, metallurgical carbon, and recycled metals. Its subsidiary, ReElement Technologies, specializes in rare earth extraction and separation, producing high-purity rare earths from domestic mining waste, recycled magnets, and industrial waste, with its commercial-grade rare earth separation facility in Noblesville, Indiana promoting diversification of the U.S. supply chain and circular economy.
Perpetua Resources' core business is the development of the Stibnite gold-antimony mine in Idaho, with rare earth concentrate as a by-product.
Critical Metals Corp has established a partnership with the U.S. critical minerals company GreenMet to jointly develop the Tanbreez project in southern Greenland, focusing on the extraction of heavy rare earth elements.
IperionX is a technology company focused on the research and production of strategic materials, with its Titan project possessing one of the largest titanium, rare earth, and zircon sand deposits in the United States that meet JORC standards.
TMC the Metals is a Canadian deep-sea mining company, and there have been market rumors that U.S. President Trump intends to order the establishment of a federal-level 'rare earth strategic reserve' specifically for storing rare earth minerals extracted from the seabed.
Overall, as industries such as electric vehicles, wind power, and AI chips continue to grow, the importance of rare earth metals will only increase. Investors should maintain a sustained focus on this sector.
