Rare earths stockpiled as Rinehart- backed miner halts exports to China

Gina Rinehart-backed MP Materials is now stockpiling rare earth concentrate after it halted exports to Chinese customers amid the trade war playing out between Beijing and Washington.

Bags of rare earth concentrates at the Mountain Pass mine, operated by MP Materials, in Mountain Pass, California. Picture: Joe Buglewicz/Bloomberg

Gina Rinehart-backed MP Materials has halted shipments of rare earth concentrate to China in a twist in the trade war playing out between Beijing and Washington.

New York-listed MP Materials said selling its rare earth concentrate to China under 125 per cent tariffs was “neither commercially rational nor aligned with America’s national interest”.

China dominates global rare earths and permanent magnets supply and has rattled big players in US defence and other key ­industries by moving to cut off supply.

Las Vegas-based MP Materials said it had been preparing for this moment since day one.

“Our mission, capital strategy, and execution reflect a long-term vision built to withstand short-term dislocation and emerge stronger,” it said.

“MP has invested nearly $US1bn to restore the full rare earth supply chain in the US. Today, our California refinery is processing nearly half of our production, with virtually all of that material sold into markets outside China – including Japan, South Korea, and the US.”

Mrs Rinehart’s private company, Hancock Prospecting, owns 8.5 per cent of MP Materials, which said it was now stockpiling rare earths concentrate.

Australia’s richest person also owns 8.2 per cent of ASX-listed Lynas Rare Earths, the biggest non-China supplier.

The two companies held merger discussions thought to have fizzled out early last year, with Lynas boss Amanda Lacaze later confirming they talked about the value of creating a Western rare earths champion of critical mass.

The Lynas share price has climbed almost 35 per cent in the past 12 months while MP Materials is up 57 per cent over the same period.

Gina Rinehart. Picture: Supplied

Mrs Rinehart has a near 10 per cent stake in Arafura Rare Earths, which has received about $1bn in backing from the Albanese government for its Nolans project near Alice Springs.

Both the US and Australia are considering creating strategic reserves of critical minerals, including rare earths.

MP Materials said it was accelerating downstream operations, set to include heavy rare earths separation while stepping up oxide production and trying to bring magnet production online in Texas.

“In recent days, manufacturers across critical industries have urgently reached out in search of a secure, resilient source of materials and magnets,” the company said in a statement release on Thursday in the US.

“We are uniquely positioned to answer that call. We are also in close contact with federal leaders and encouraged by their determination to support American industry—now and in the long term.

“Together with our customers and US government partners, we are accelerating every phase of our strategy to reindustrialize the rare earth supply chain on American soil.”

MP Materials sits behind Lynas as world’s second biggest producer of rare earths outside of China.

Both companies have the backing of the US Department of Defence to build processing plants in Texas to produce rare earth materials essential in modern weapons systems, electronics and in the renewable energy sector.

Resources Minister Madeleine King told The Australian earlier this week that China’s actions in restricting rare earths and permanent magnet supply to the Western world underlined the need for Australia to create a strategic reserve of critical minerals.

Labor has said it will reveal details of its plans for critical minerals strategic reserve before the federal election on May 3.

Chinese rare earths company Shenghe has an 8.3 per cent stake in MP Materials. It is understood links to Shenghe and another producer, China Northern, figured in the federal government decisions to force Yuxiao Fund and four associates to divest shares in ASX rare earths player Northern Minerals.

Originally published as Rare earths stockpiled as Rinehart- backed miner halts exports to China