MP Materials, owner and operator of Mountain Pass, the only rare earth mining and processing site of scale in North America, has cemented plans to go public on the New York Stock Exchange at a valuation of $1.5 billion. Along with recent funding from the US Department of Defense to support development of full ore processing capability, MP is making significant progress in its aim to become the major vertically integrated provider of rare earth magnetic material outside of China.
Ironically, while currently mining 15% of the world supply of rare earth magnetic material at its open pit mine outside Las Vegas it must ship the partially processed ore to China for final processing. That situation is expected to change, however, once the company’s planned processing operation comes onstream.
In the stock deal, MP announced July 15 that it reached a definitive agreement to merge with Fortress Value Acquisition Corp., a special purpose acquisition company that is already listed on the NYSE. Upon completion of the transaction, the combined company will be named MP Materials Corp. and will remain listed under the new ticker symbol “MP”.
The company will retain its management team. Co-Chairman James Litinsky will become chairman and CEO, current CEO Michael Rosenthal will become COO, Ryan Corbett will continue to serve as CFO, and Sheila Bangalore will continue to serve as chief strategy officer and general counsel.
“This business combination and becoming a public company is a key milestone in MP Materials’ mission to restore the full rare earth supply chain to the United States of America,” said Litinsky. Its site at Mountain Pass, NV, located about an hour outside Las Vegas, contains one of the richest rare earth deposits in the world, with average ore grade of approximately 8%, and includes state-of-the-art processing and separation facilities, he noted.
The company expects to book over $100 million in revenues and nearly $30 million in profits this year. The plan ahead is to retrofit and recommission its existing on-site refining facilities to enable it to pursue additional downstream growth opportunities, aiming toward profits of over $250 million in 2023 depending upon rare earth market conditions over that period, said Litinsky.
Its facility at Mountain Pass is the only one of its kind in the Western Hemisphere that integrates both mining and processing of rare earths. With over 200 employees, the company produces approximately 15% of global rare earth materials presently.
Currently, it produces a rare earth concentrate of Neodymium-Praseodymium (NdPr), the primary rare earth material used in many high-strength permanent magnets for electric vehicles, electronics and aerospace-defense products. China dominates the world supply, producing over 80% of the global market presently – a monopoly which disturbs the comfort level of the rest of the world.
The DoD contract came about in late April, serving as Phase 1 funding of a DoD effort to reduce U.S. supply chain vulnerabilities by ultimately enabling commercial scale production and operation of a domestic heavy rare earth facility. An undisclosed amount was provided to MP to support detailed planning and design of a separation facility, seen as a critical component for expansion of the domestic rare earth and magnetics industry. Upon completion of Phase 1, the DoD may award further contracts in support of commercial scale production based on Phase 1 results.
The government backing quickly hit a bump. It was part of two awards by DoD aimed at improving the supply chain for military weapons outside China. A similar grant was made to Australia’s Lynas Corp., which has a rare earth mine and primary processing plant in Australia along with a further processing operation in Malaysia. According to Reuters, the funding for both projects was put on hold shortly after award partially, at least, because MP is 10% owned by the Chinese company to whom it ships its concentrate. In July, however, DoD resumed its commitment for both projects after further research, said Reuters.
The Mountain Pass site is an extraordinary mineral property with a boom-and-bust history. The MP group acquired the Mountain Pass assets out of bankruptcy in 2017 and restarted operations in 2018. It had been mothballed for three years after its previous owner, Molycorp, went bankrupt. The mine first opened in the 1950s and for decades was the world’s biggest provider of rare earth minerals.
For more info, see www.mpmaterials.com.