Iluka Resources (ASX:ILU) was the beneficiary of momentum driven by a decision from the US Pentagon overnight to buy a 15% stake in a listed REE smallcap in Las Vegas.
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The company that the U.S. Government (or Trump, for all intents and purposes) bought a stake in doesn’t matter. It’s ultimately a show of support from the White House (or Pentagon, depending on who you listen to) to actively participate in the mission to secure domestic supply chain security.
And that, in turn, has Australians bullish we could soon see a similar type of move from Canberra. Or at least, some are thinking that.
At the same time, the rare earth metal molybdenum shot up overnight, in part driven by the news. London Metal Exchange (LME) futures for the tech metal jumped +16.7% in one session (though, after a dip in late June, that brings monthly growth in the price to a more modest +6.4%).
We aren’t seeing the same thing for neodymium, though, which is often the best-known rare earth element (REE), and particularly highlighted for its role in wind turbines and other renewable technologies.
That’s because the U.S. is a major producer of molybdenum, one of the few rare earth elements with which it can boast that claim.
China remains dominant, but the U.S. holds a significant global share.
Typically, the metal is a byproduct of porphyry copper mining, but the company the U.S. has invested $600 million in – MP Materials – is a straight rare earth miner.
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Like Iluka Resources: Which brings one to wonder if we’ll see similar support, perhaps either from the U.S. or perhaps from Canberra. That part of the calculus probably doesn’t matter for the rush on Friday.
But the small end of town also saw a surge of support on Friday. As of 11.30am:
- Viridis Mining (ASX:VMM) +13.64% to 63cps
- Lynas REE (ASX:LYC) +17.6% to $9.75/sh
- Brazilian REE (ASX:BRE) +8.10% to $2.54/sh
- Arafura REE (ASX:ARU) +6.9% to $19cps
- And, ILU last traded at $5.03/sh.
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