Update on the rare earths (RE) situation in the US. For some reason, it was hard to piece together the current picture in the US, but here it is as I understand it:
- MP Materials (NYSE: MP; $39.40) currently operates the only operating rare earths mine in the US: the
Mountain Pass mine on the California/Nevada border. It also operates the only RE processing plant, which is at that mine. However, the plant does not process all of the ore, only a few select elements. The rest of the ore is shipped unprocessed to China. A Chinese company, Shenghe, owns between 8-10% of MP.
- Rare Element Resources (REEMF; $2.62) is developing an RE mine in northeast Wyoming. It plans to operate a processing plant in the nearby town. It has yet to produce any ore or revenue, but it has harvested some raw ore which it has in storage.
- Texas Mineral Resources (TMRC; $2.62) is developing an RE mine (Round Top) in southwest Texas near El Paso. As of 2021, according to its website, it has ceased exploration because it ran out of money. They were apparently hoping to get a government contract to fund further development, which has not come through (see below). They have a formal partnership with USA Rare Earths (see below).
- USA Rare Earths (USARE) is a private company which appears to want to be a management, exploration, and processing company of REs in the US, but not to actually mine them. It's only partner so far is TMRC, to whom it helped fund their exploration in Texas until recently. USARE reportedly plans to issue an IPO or a SPAC sometime this year to allow them to fund further exploration at Round Top and to build a processing plant in Colorado. According to TMRC's website, if the Texas mine goes into full operation, the processing plant will eventually relocate to Texas. I suspect that USARE wants to build the plant in Colorado so it can process ore from MP, REEMF, and TMRC as well as any other companies that start production in the Western US. If they go public this year, their goal is to have the plant in operation by 2023.
All of these companies were hoping to get a huge grant or contract from the US Department of Defense (DoD) to continue their exploration, start their mines, and/or build processing plants. It didn't happen. Instead, last month the DoD
awarded the contract to the Australian company Lynas (LYC; $6.10), which will build its plant in Texas (Hondo) and ship ore from Australia to be processed there. They have not said if they would be willing to process ore from any of the American companies listed above.
That's the situation with rare earths in the US. I can think of one big question: Will the Biden Administration continue to fund American RE independence from China? If Trump was President, I think the answer would clearly be "yes." But, I don't know with Biden/Harris.