Latest news with #James Litinsky
Forbes
10-08-2025
- Business
- Forbes
Trump's Trade War Mints An Unlikely New American Mining Billionaire
James Litinsky, chief executive officer of MP Materials, during the Hill & Valley forum at the US Capitol in Washington, DC, US, on Wednesday, April 30, 2025. Photographer: Al Drago/Bloomberg © 2025 Bloomberg Finance LP I n July, the Defense Department made an unusual move for a federal U.S. agency when it purchased $400 million of newly created shares, plus warrants to buy additional stock, in the rare earths miner MP Materials. As part of the deal, the DoD also signed a 10-year agreement to buy rare earth magnets from MP Materials to power its future instruments of warfare. The federal government came calling because MP Materials owns the only rare earth mine in the U.S. at its Mountain Pass site in California's Mojave Desert, where it extracts, refines, and separates rare earth materials like neodymium and praseodymium. Those elements are essential ingredients in the magnets used by electric vehicles, drones, defense systems, robotics, wind turbines and other advanced technologies. Shares in MP Materials have risen 150% since the DoD announcement, pushing James Litinsky, founder and CEO, into the three-comma-club. The 47-year-old Las Vegas resident is worth an estimated $1.2 billion, between his 8% stake in MP Materials (worth about $1 billion as of Friday's market close) and over $200 million in cash and outside investments, per Forbes' estimates. Litinsky, who did not respond to Forbes' request for comment on his wealth, is not your typical mining magnate. He studied economics at Yale and received his J.D. and M.B.A. from Northwestern University before working at investment giant Fortress Group and then founding his own hedge fund JHL Capital in 2006. His firm acquired $20.5 million worth of distressed bonds issued by Molycorp Minerals, the previous owner of the Mountain Pass site, in 2014. Three years later, during Molycorp's bankruptcy proceedings, he turned those bonds into full ownership of the mine (which had flooded and was inactive). After getting $50 million in financing from a Chinese backer and orchestrating an 18-month cleanup effort, the newly named MP Materials began mining operations in 2018. Litinsky took the company public in 2020 through a SPAC, and its output has more than tripled since it began operations. While Trump's tariffs and trade war wreak havoc on global supply chains and raise consumer prices in the United States, MP Materials is uniquely positioned to benefit from the chaos, especially from the escalating standoff between the U.S. and China. That's because China dominates the global rare earths trade, processing 90% of the metals and producing 95% of high-strength magnets; the U.S. imports nearly all of its 7,000 tons annually from China. China has used U.S. reliance on its rare earth magnets as a key bargaining chip in its negotiations with Trump. Following Trump's Liberation Day tariffs announcement in April, China began requiring foreign companies to obtain export licenses for rare earth magnets, which caused a crisis for U.S. firms: exports of the magnets to the U.S. declined 59% year-over-year in April and a whopping 93% in May, the Wall Street Journal reported. For MP Materials, the chokehold spurred a surge in domestic demand. 'The sense of urgency, I've never seen anything like it,' Litinsky told Forbes in April. Ironically, Litinksy has relied on the Chinese to get MP Materials off the ground and sustain its business prior to Trump's trade war. Shenghe Resources, a Chengdu-based rare earths giant that is partially owned by the Chinese government, helped finance JHL's 2017 bid by purchasing $50 million of future rare earth concentrate produced by MP Materials. Those funds helped pay for the mine's cleanup effort and new capital costs, in return for an 8.4% stake in the company, which Shenghe still holds. (It has no operational involvement at MP Materials and does not have a board seat). Shenghe is also its largest customer, accounting for 80% of its $204 million in revenue last year. That is changing fast: after Liberation Day and China's retaliatory tariffs, MP Materials announced it would stop shipping its products to China and focus on other buyers. To wean off its reliance on China, MP Materials needs to continue vertically integrating. Its Mountain Pass refinery now processes around half of all ores excavated from the nearby mine, but it is still working to build out refinery capacities for the all-important neodymium-praseodymium metals that go into magnets. (The government's $400 million investment should help on that front). Further downstream, MP Materials has built a magnet manufacturing facility in Fort Worth, Texas, which is already churning out magnets and is on track to begin full commercial production later this year. And in conjunction with the DoD deal, the company announced it will build a second U.S. magnet manufacturing facility at a yet-to-be-announced location with the help of a $1 billion bank loan. All of this costly, but even more costly for MP Materials has been the precipitous decline in rare earth prices over the past couple of years, which has hit the bottom line hard. After netting a record $290 million in 2022, MP Materials made $24 million in 2023 and lost $65 million last year. Still the company remains well positioned with $750 million of cash and cash equivalents on its balance sheet, a growing roster of U.S. customers like General Motors, and now the government's backing amid the ever-escalating trade war. Even with its stock trading at an all time high of over $73 per share, seven out of 11 analysts have a Buy rating on the stock, while the other four have a Hold. Though Litinsky has no formal training in mining or geology, he clearly knows a good investment when he sees one. He's turned a $20.5 million bet on distressed bonds into a $13 billion (market cap) company with strategic importance to his home country. 'If you can buy a world-class asset at a discount to replacement cost at the bottom of a cycle,' he told Forbes last year, 'luck finds you.' MORE FROM FORBES Forbes The Only U.S. Rare Earth Mine May Win Big From Trump's China Tariffs By Alan Ohnsman Forbes This Contrarian Investor Saved America's Biggest Rare Earths Mine, With Some Help From The Chinese By Christopher Helman
Yahoo
12-07-2025
- Business
- Yahoo
MP Materials and DoD to expand US rare earth magnet supply chain
US-based rare earth producer MP Materials has entered a public-private partnership with the US Department of Defense (DoD) to advance the domestic rare earth magnet supply chain and lessen reliance on foreign sources. The US is almost entirely dependent on imports for rare earth magnet components. The new strategic partnership aims to stimulate domestic production, bolster industrial resilience and secure essential supply chains for industries poised for growth and future dual-use technologies. The collaboration includes a multibillion-dollar investment package and long-term commitments from the DoD for the construction of MP Materials' second domestic magnet manufacturing facility, known as the 10X Facility. The 10X Facility, whose location is yet to be determined, will serve both defence and commercial clients. With an estimated manufacturing capacity of 10,000 tonnes (t), the facility is expected to begin commissioning in 2028. MP Materials also plans to enhance its heavy rare earth separation capabilities at its Mountain Pass facility in California, where high-purity rare earth materials are extracted, separated and refined at a single site. The company is also commissioning a magnetics facility in Texas, named Independence, which will anchor its downstream capabilities. MP Materials founder, chairman and CEO James Litinsky stated: 'This initiative marks a decisive action by the Trump administration to accelerate American supply chain independence. 'We are proud to enter into this transformational public-private partnership and are deeply grateful to President Trump, our partners at the Pentagon and our employees, customers and stakeholders for their unwavering support and dedication.' Under the partnership, the DoD has committed to a ten-year price floor of $110 per kg for MP Materials' neodymium-praseodymium (NdPr) products, ensuring stable cash flow and protection from market volatility. The DoD has also guaranteed to purchase all magnets produced at the 10X Facility for ten years post-construction. To support the development of the 10X Facility, MP Materials has secured a commitment letter for $1bn in financing from JPMorgan Chase Funding and Goldman Sachs Bank. The company also expects to receive a $150m loan within 30 days from the DoD for expanding heavy rare earth separation at Mountain Pass. The DoD will purchase $400m of a new series of convertible preferred stock in MP Materials, with the potential to become the company's largest shareholder. This investment will be used to expand rare earths separation, processing and magnet production capacities. In May 2025, MP Materials signed a memorandum of understanding (MOU) with the Saudi Arabian Mining Company (Maaden) to create a fully integrated, end-to-end rare earth supply chain within Saudi Arabia. "MP Materials and DoD to expand US rare earth magnet supply chain" was originally created and published by Mining Technology, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Fast Company
10-07-2025
- Business
- Fast Company
MP Materials' stock surged more than 50% Thursday—here's why
On Thursday, the United States Department of Defense (DOD) entered a major deal with MP Materials. The DOD agreed to buy $400 million of MP Materials newly created preferred shares stock. The move will make the U.S. military the company's largest stakeholder. In the hours after the deal, the company's stock surged more than 50%. MP Materials owns and operates the only operational rare earth mine in the U.S., located in Mountain Pass, California. It is the world's second-largest rare earth mine (the largest is in China). The purchase is part of a major effort to reduce foreign dependence on rare earths, a group of 17 chemical elements found within the earth's crust, which are necessary in creating magnets that are essential in military weapons systems. The company says the DOD's investment will allow for a major expansion of its operations, announcing that it will use the funds to construct the 10X Facility, its second domestic magnet manufacturing facility, at a location that is yet to be chosen. The company estimated that, upon completion, its total U.S. rare earth magnet manufacturing capacity will reach 10,000 metric tons. 'This initiative marks a decisive action by the Trump administration to accelerate American supply chain independence,' said James Litinsky, founder, chairman, and CEO of MP Materials in a press release. 'We are proud to enter into this transformational public-private partnership and are deeply grateful to President Trump, our partners at the Pentagon, and our employees, customers and stakeholders for their unwavering support and dedication.' The preferred shares bought by the DOD can be converted into common stock, the press release explained. The deal also includes a warrant convertible at $30.03 a share for 10 years, allowing the U.S. to purchase additional common stock. Under the deal, the U.S. government is committed to a 10-year agreement in which it will buy MP Materials for a minimum price of $110 per kg for its neodymium and praseodymium output. Once the 10X Facility is complete, it has agreed that 'all magnets produced at the 10X Facility will be purchased by defense and commercial customers with shared upside,' per the press release. MP Materials said it has obtained a commitment letter from JPMorgan Chase Funding Inc. and Goldman Sachs Bank USA, which will provide $1B in financing the 10X Facility. It also said it expects a $150 million loan from the DOD within 30 days. The DOD has been consistently working to ensure access to rare earth materials in recent years. Since 2020, it has spent more than $439 million on establishing supply chains for the materials in an effort to move away from relying on shipments from overseas. 'DOD's strategic investments are building capability at multiple stages of the rare earth supply chain and will provide a clear signal to private capital that the time is right to build additional resiliency,' Danielle Miller, acting deputy assistant secretary of defense for industrial base resilience, said last year. Miller continued, 'We are on track to meet our goal of a sustainable, mine-to-magnet supply chain capable of supporting all U.S. defense requirements by 2027.' The sale comes as concerns around China's control over the industry have surged. Previously, Shenghe Resources, which is partly owned by the Chinese government, was MP Materials' the sole customer. However, the company said earlier this year that due to China's 125% tariffs (put into place after Trump's tariffs on Chinese goods) it would no longer send materials to China. 'Selling our valuable critical materials under 125% tariffs is neither commercially rational nor aligned with America's national interest,' MP Materials said in a statement at the time. The DOD's new investment, which represents about a 15% stake in the company, is scheduled to close on July 11, 2025.
Yahoo
10-07-2025
- Business
- Yahoo
MP Materials partners with Department of Defense to boost US rare earth magnet supply, shares soar
(Reuters) -MP Materials said on Thursday it has entered into a public-private partnership with the U.S. Department of Defense to build-out domestic rare earth magnet supply chain and reduce foreign dependency, sending shares up 30% in premarket trading. The company will construct its second magnet manufacturing facility in the U.S., the '10X Facility', to serve defense and commercial customers. Rare earths are a group of 17 metals used to make magnets that turn power into motion for electric vehicles, in cell phones, and other electronics. China is the world's largest producer and earlier halted exports to counter U.S. moves to levy punishing tariffs on it. MP Materials expects to add additional heavy rare earth separation capabilities at its California-based Mountain Pass facility. "This initiative marks a decisive action by the Trump administration to accelerate American supply chain independence," said its CEO James Litinsky. The facility is expected to be commissioned in 2028, the company added. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
