Latest news with #NdPr
Forbes
7 hours ago
- Business
- Forbes
What's Happening With MP Materials Stock?
MP Materials (NYSE:MP) is an American rare-earth materials firm based in Las Vegas, Nevada, and it has emerged as one of the most prominent names in the market for 2025. The stock has performed exceptionally well this year, increasing by approximately 4.5x year-to-date. The company owns and manages the Mountain Pass mine, which is currently the sole operating rare earth mine and processing facility in the United States. Its primary focus is on producing Neodymium-Praseodymium (NdPr), essential rare earth elements utilized in high-strength permanent magnets for electric vehicle motors, wind turbines, drones, and military equipment. However, following the price surge, the stock now trades at roughly 42x forward revenue – a substantial figure for a mining stock. While there may be significant potential, with profitability still unattainable, conventional valuation metrics do not present the complete picture. Why the Stock is Surging Geopolitical tensions have provided strong support. In April, following rigorous U.S. tariffs on Chinese products, Beijing implemented an export-control system for rare earths. By May, China's rare earth magnet exports had decreased 74% year-over-year, with shipments to the U.S. reportedly plummeting 93%. Even after a trade agreement between the U.S. and China to alleviate restrictions, approvals for Western companies remain sluggish, emphasizing the necessity of establishing a secure domestic supply. This presents MP with a vital role in diminishing U.S. dependency on China, which produces 90% of the world's most powerful rare-earth magnets. In this context, the U.S. Department of Defense became MP's largest stakeholder after a $400 million stock acquisition intended to enhance the magnets business and ensure the domestic supply chain's security. In addition, MP finalized a $500 million rare earth magnet supply contract with Apple, with prepayments accounting for most of the cost to expand the company's Independence downstream center for rare earth metal and magnetics production in Texas. Operations Progress and Earnings MP is growing rapidly. Its Q2 2025 results exceeded expectations as NdPr oxide production reached record levels, up 119% year-over-year, while sales volumes more than tripled to 443 metric tons. Revenue skyrocketed by 84% to $57.4 million. Management anticipates NdPr oxide production will increase another 10% to 20% sequentially in Q3. This is remarkable growth. The company has also been moving downstream, manufacturing permanent magnets alloys and finished magnets in a transition towards more valuable high-margin products. Sales for this segment rose to $20 million, and the company aims to scale production to reach 10,000 metric tons annually by 2028. The company's balance sheet is also robust, boasting close to $2 billion in cash reserves. Separately, see Buy or sell Rigetti Computing Ahead of Its Earnings? Risks and Why to Avoid Despite the considerable momentum, the valuation may be somewhat challenging to rationalize. At 42x forward revenue, MP resembles a hot technology stock more than a miner. The business remains unprofitable, with a $53.5 million net loss recorded so far this year and close to $126 million in cash burn. Although U.S. government and corporate contracts offer stability, execution risk is still high. Chinese suppliers, who continue to dominate the supply chain, have every motivation to circumvent export restrictions, and once supply normalizes or the trade tensions ease, MP's strategic advantage could lessen. Given these multiples, with profitability still far off and a significant dependence on geopolitical factors, the stock seems to represent more of a crowded trade rather than a secure investment. The Trefis High Quality (HQ) Portfolio, comprising 30 stocks, has consistently outperformed its benchmark, which includes all three – the S&P 500, Russell, and S&P midcap. What accounts for this? As a collective, HQ Portfolio stocks have yielded better returns with lower risk compared to the benchmark index, representing less volatility, as evidenced in HQ Portfolio performance metrics.
CNBC
4 days ago
- Business
- CNBC
Government-backed MP Materials surges as loss narrows on record rare earth oxide production
MP Materials' stock surged on Friday after the miner narrowed its losses in the second quarter on record production of a key rare earth oxide, raising hopes among investors that the company is moving toward profitability after a big investment by the Defense Department. Shares of MP were last up about 9% before the market open. MP booked an adjusted loss of $21.37 million, or 13 cents per share, down 24% compared to $28 million, or 17 cents per share, in the same period a year ago. Its sales jumped 84% to $57.4 million compared to $31.3 million in second quarter of 2024. The miner produced a record amount of neodymium-praseodymium (NdPr) oxide in the quarter. NdPr is the main raw material in permanent magnets that are used in electric vehicle motors, robotics and electronics. MP produced 597 metric tons of NdPr in the second quarter, a 119% increase over last year. MP's second quarter results come after the company announced two transformative deals last month. The Defense Department agreed to purchase $400 million of the company's preferred stock, making the federal government MP's largest shareholder. The Pentagon also set a price floor for NdPr and agreed to buy 100% of the offtake from a new magnet facility that MP will build. Days later, MP announced that Apple will invest $500 million in its production through the purchase of rare earth magnets and will help launch a rare earth recycling facility.
Yahoo
6 days ago
- Business
- Yahoo
Why MP Materials Stock Surged an Incredible 85% in July
Key Points The Department of Defense moved to ensure the U.S. will have a long-term supply of critical rare-earth materials. Apple followed suit a few days later with another transformative deal with MP Materials. The company is primed for significant facility expansion underpinned by heavy investment and support from the Department of Defense and Apple. 10 stocks we like better than MP Materials › July was a momentous month for the rare-earth and magnets company MP Materials (NYSE: MP). The stock rose a whopping 84.9% in July, according to data provided by S&P Global Market Intelligence. Moreover, as I write, the stock is up an incredible 338% on a year-to-date basis. Why MP Material stock surged in July The move in July comes down to a series of events starting with the transformative partnership signed with the United States Department of Defense. It's an unusual partnership, and it fundamentally changes the investment proposition for the company: MP Materials will construct a domestic magnet manufacturing facility (its second), known as the "10X Facility." The DOD purchased $400 million in the company's preferred convertible stock and has a warrant to acquire additional common stock. If exercised, the warrant could lead to the DOD owning 15% of the shares in the company at the time of the deal. The DOD is loaning MP Materials $150 million to expand its capability at Mountain Pass, and JPMorgan Chase and Goldman Sachs have agreed to provide $1 billion in financing toward the construction of 10X. The DOD will ensure that "100% of the magnets produced at the 10X Facility will be purchased by defense and commercial customers with shared upside," and will enter a 10-year agreement, guaranteeing a price floor of $110 per kg for neodymium and praseodymium (NdPr) products. As the bullet points imply, the deal helps secure MP Materials' future, ensures cash flow, brings financing, and propels the company into the forefront of providing the future supply of critical rare-earth materials to the U.S. Enter Apple A few days later, in mid-July, MP Materials announced a long-term rare-earth magnet supply agreement with Apple. The technology company's commitment to buying $500 million in rare-earth magnets produced in the company's Texas facility will result in a significant expansion in that facility. The next day, MP Materials announced a $500 million stock offering, which was promptly raised to $650 million the following day due to strong demand, with the proceeds to be allocated to expanding its facilities, including 10X. What's next for MP Materials? The company has benefited from its position as the only operator of a major operational rare-earth mine, Mountain Pass in California, and the operator of a rare-earth magnet production (a market globally dominated by China) facility in Texas. It clearly has a big future, but what's less obvious is how the company will deal with the execution risk around building out facilities, or even what kind of administration will be in place in the future in the U.S. Any public-private partnership, by definition, carries political risk, and investors need to consider that before investing in this exciting company. Should you invest $1,000 in MP Materials right now? Before you buy stock in MP Materials, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and MP Materials wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $619,036!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,092,648!* Now, it's worth noting Stock Advisor's total average return is 1,026% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 4, 2025 JPMorgan Chase is an advertising partner of Motley Fool Money. Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Goldman Sachs Group, and JPMorgan Chase. The Motley Fool recommends MP Materials. The Motley Fool has a disclosure policy. Why MP Materials Stock Surged an Incredible 85% in July was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
29-07-2025
- Business
- Yahoo
MP Materials: A Domestic Rare Earth Monopoly
MP Materials Company Overview Rare earth elements (REEs) are a group of seventeen rare elements that are essential ingredients for a wide range of modern technologies due to their unique magnetic, luminescent, and electrochemical properties. Zacks Rank #3 (Hold) stock MP Materials (MP) is America's only vertically integrated rare earth producer. At its site in Mountain Pass, California, the company mainly mines and processes rare earth elements, particularly Neodymium-Praseodymium (NdPr), which are integral components in high-strength permanent magnets. These rare earth magnets are irreplaceable because, without them, it's impossible to produce electric vehicle motors, wind turbines, robotics, advanced defense systems, and a wide range of consumer electronics such as smartphones. Beyond its California mine, MP Materials is expanding its magnet manufacturing capacity with new facilities in Texas. MP Scores DoD Investment The COVID-19 pandemic highlighted to the world the fragility of the global supply chain. Although tensions between the US and China have cooled somewhat from their peak during the tariff standoff earlier this year, President Donald Trump has insisted that the US onshore and secure critical supply chain components, especially those needed for national security. Because rare earth elements are essential for defense and critical commercial applications, the Department of Defense (DoD) awarded MP Materials a lucrative contract in early July, which includes a $400 million investment in preferred stock and a $150 million loan to help the firm expand its processing capabilities. In addition, DoD has pledged to purchase all of MP's neodymium-praseodymium oxide production from its new facility, ensuring a minimum price that will be paid. Apple Commits $500 Million to MP Materials Tech giant Apple (AAPL) is one of the largest purchasers of rare earth elements globally. On July 15th, Apple announced that it would invest $500 million into MP Materials to purchase American-made rare earth magnets. Additionally, Apple will use its endless resources to help establish a 'cutting-edge rare earth recycling line in Mountain Pass, California, and develop novel magnet materials and innovative processing technologies to enhance magnet performance.' MP Builds Rare, High-Tight Flag Chart Pattern When it comes to price action, power and distance are often correlated. Following the DoD contract, MP shares bolted 50% in a single trading session as trading volumes soared to seven times the norm. A few weeks later, shares jumped another 20% as volume soared following the Apple news. MP shares have now more than doubled over the past month, forming a classic high-tight flag pattern. While shares may seem extended to amateur investors, such patterns have historically led to robust gains, especially in companies with bullish catalysts like MP. Image Source: TradingView MP Call Flow Deep-pocketed options traders have been piling into December $75 MP calls, suggesting high bullish conviction in the stock into year-end. Bottom Line MP Materials enjoys a monopoly on domestic US rare earth mining and production. In addition to its stranglehold on the rare earth market, MP stands to benefit from significant headwinds, including an investment from the US DoD, and a deal with Apple. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report MP Materials Corp. (MP) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
News.com.au
25-07-2025
- Business
- News.com.au
Monsters of Rock: Whatcha gonna do when LITHIUMANIA runs wild on you
Lithiumania rises as spod prices hit three month high Rare earths stocks see valuations lift on NdPr price moves ASX 300 mining and metals index surges ~5% this week The reality TV stars of the early 2000s are beginning to go the way of the dodo, after Hulk Hogan joined Ozzy Osbourne on the celebrity obituary list overnight. Like most of the superstars of that era, the Hulkster has a spotty history. His electrifying personality put American pro wrestling on the global map, but he alienated peers and spent years effectively banished from public life for a racist slur. Yet, for better or worse, the slogans, theme songs and Rocky III will live on forever. None more so than Hulkamania, the enduring phrase that can be applied to pretty much any trend (if Heinrich Heine didn't get there first with Lizstomania which, of course, he did). So we're taking a tiny bit of ill-gotten inspiration from the big, morally dubious man, or Sofia Coppola's husband's four-piece Phoenix, for today's descent into LITHIUMANIA. Spodumene prices have made a radical comeback on a wave of mine closures in China where local authorities appear to be carrying out the CCP's will to trim competition that has driven heavy corporate losses outside integrated battery and car majors CATL and BYD. We're now at US$810/t, levels not seen since April, after spod followed a massive +8% rise in futures in the Chinese market yesterday. Incredible! At the close of trading today, the average #lithium carbonate futures price increased by 8.29% (the largest interday percentage change since 02/29/24), surpassing the average spot LC price by CNY 6,671 (the largest contango since 03/06/25). A boom in market sentiment! â€' Juan Carlos Zuleta (@jczuleta) July 24, 2025 Profit-taking has sucked some heat out of the local names, with Pilbara Minerals (ASX:PLS), Mineral Resources (ASX:MIN), IGO (ASX:IGO) and Liontown Resources (ASX:LTR) all down. But over the past month the gains have been promising. Liontown Resources (ASX:LTR) is up 37%, with IGO (ASX:IGO) +34%. Pilbara Minerals (ASX:PLS) has gained close to 50%, while Mineral Resources (ASX:MIN), also supported by a rising iron ore price, is close to 60% higher, bouncing off lows caused by weak lithium prices, balance sheet concerns and governance issues circling MD and founder Chris Ellison. Lithium carbonate prices also leapt up, according to PRA Fastmarkets, with the key battery chemical rising US$250/t to US$8800/t. We'll see if this holds up, but enthusiasm for the beaten down battery metals space is certainly returning. Rare earthers Now for rare earthers, another segment of the market where sentiment has been driving gains. NdPr prices have surged since the announcement of a deal between the Department of Defense and US miner and refiner MP Materials. The arbitrage between the US$110/kg price the US Government will offer the owner of the Mountain Pass mine and the Chinese benchmark (~US$60/kg before the news a fortnight ago) has begun to close. Yesterday saw a 6.4% move in Chinese markets to US$73.6/kg, US$65.12/kg with value added tax excluded. Analysts are more bullish now on the large rare earths stocks. Canaccord upgraded Iluka Resources (ASX:ILU) from hold to buy and lifted its price target from $4.40 to $5.85 a share this week, noting not only that mineral sands production of 150,000t for the June quarter was well ahead of consensus (130,000t), but also that the MP Materials deal had provided a price signal that de-risked its Eneabba rare earth refinery. "We have revised our modelling for JunQ actuals and revise our LT mineral sands pricing in line with consensus. Additionally, we have de-risked our Eneabba project NPV on an improved REE pricing outlook, the net impact seeing our SOTP-based target price increase to A$5.85/sh (from A$4.40/sh)," Canaccord's Reg Spencer and William Jones said. Iluka has spent ~$570m on construction so far at the $1.8bn Eneabba project, which is backed with a big fat government loan. Reporting its June quarter on Thursday, market leader Lynas (ASX:LYC) reported its first quarter producing more than 2000t of NdPr oxide, delivering 2080t (total 3212t), with first production also in the quarter of heavies terbium and dysprosium oxide. Sales receipts climbed from $124.6m to $152.7m and sales revenue rose 38% to $170.2m. At $60.2/kg, Lynas enjoyed its highest average selling price since the middle of 2022, though cash and short term deposits dropped from $268.9m to $166.4. Speaking to analysts yesterday, Lynas MD Amanda Lacaze was bullish on the MP Materials deal's potential to grow the rare earths market outside China. "I think that it has sent a clear message about the determination of the US government to rebuild this sector outside China. And that certainly has a couple of different benefits," she said. "One is it gives end users confidence to formulate material. I know that over many years, there have been end users who've said, well, gee, we need to invest in alternate technologies because of the supply chain risks associated with rare earths only coming from China. So I think we see a more vibrant and a more buoyant market, generally speaking. And I think that, that will underpin increasing -- increases in the price. "Can (NdPr) go above $110? Yes. And I think if you read the detail of the deal, that there would be an expectation from the US government that that is likely to happen because they've negotiated ... a share of any upside over the $110 as part of their agreement." Lacaze also attributed a recent run-up in prices to growing demand inside China, noting the Asian Metal price had gone up 12-13 bucks a keg in the past month. Canaccord moved from buy to hold to Lynas on valuation, but lifted its price target from $8.80 to $9.65 on improving market conditions. Lynas shares have lifted 18% in the past month to $10.70, while Iluka's have run a mad 57% to $5.46. There were a whole heap of gold stocks on the reporting roster this week as well. But ... we may just leave it for Gold Digger this afternoon to get stuck into them. The ASX 300 Metals and Mining index rose 4.96% over the past week. Which ASX 300 Resources stocks have impressed and depressed? Making gains Coronado Global Resources (ASX:CRN) (coal) +45.5% Patriot Battery Metals (ASX:PMT) (lithium) +38% Pantoro (ASX:PNR) (gold) +25.2% Pilbara Minerals (ASX:PLS) (lithium) +21.1% Eating losses Bellevue Gold (ASX:BGL) (gold) -4.4% Regis Resources (ASX:RRL) (gold) -4.2% Capricorn Metals (ASX:CMM) (gold) -3.3% Westgold Resources (ASX:WGX) (gold) -2.7% Coronado shares have lifted over the past week after The Australian reported Indian steelmaker JSW was close to nabbing a stake in its Curragh coal mine in Queensland, with cost control also improving in the debt-laden coal miner's recent quarterly. Shares mysteriously lifted over 17% on Friday. Patriot ran higher on both lithium's price run and the announcement of the world's largest pollucite hosted caesium resource at its Shaakichiuwaanaan project in Quebec. The project already contains North America's biggest hard rock lithium deposit. Pantoro produced 25,417oz, hitting the upper half of quarterly guidance for its Norseman gold mine. The project is finally producing real cash, with PNR building an additional $43.3m in cash and gold in the quarter on all in sustaining costs of $1991/oz, with EBITDA of $80.4m powering full year EBITDA to $196.4m. Guidance of 100-110,000oz at $1950-2250/oz has been set for FY26, with $55m of exploration – 250,000m of drilling including over salt lakes unexplored since Western Mining owned the ground in the 1990s – and $67m of growth capital on the cards. Iron ore prices have pulled the broader index higher, falling from recent highs of US$105/t to US$103.20/t in Singapore on Friday.
