...as you can see, Gina does not buy controlling stake, she is merely an investor.
...she would have no clue how to run a lithium mine well, so it won't make any sense for her to make any takeover bid for a lithium company on her own.
Gina Rinehart emerges as big investor in California rare earths giant Jemima WhyteSenior reporter
Apr 9, 2024 – 4.50pm
Gina Rinehart’s Hancock Prospecting has emerged as a significant shareholder in Las Vegas-headquartered MP Materials, the resources group that this year held merger discussions with ASX-listed Lynas Rare Earths.
Mrs Rinehart’s 5.3 per cent interest in MP Materials, which has a market capitalisation of $US2.85 billion ($4.3 billion), was disclosed after a share buyback. Higher volumes in Monday’s trading and a rally in the share price, pushing the value of the stake to $US150 million, stoked speculation Hancock may be buying more shares.
Bags of concentrates sit for transport at Mountain Pass, California, the US’ only rare earths operation. The Biden administration wants to diversify its source and processing markets away from China. Bloomberg
Hancock’s other public rare earths holdings include a 5.85 per cent stake in Brazilian Rare Earths, an ASX-listed company with a market capitalisation of about $61 million. Mrs Rinehart also owns 10 per cent of the Northern Territory’s Arafura Rare Earths.
After Lynas, MP Materials is the largest rare earths producer outside of China, operating the Mountain Pass mine in California’s Mojave Desert. Rare earths are used in energy and defence, and securing supply outside Beijing’s control has been a focus for the United States and Australia.
Mrs Rinehart, whose fortune is largely based on Hancock’s massive iron ore holdings, has aggressively expanded into rare earths and other minerals critical to the energy transition. Last year, the group acquired a big stake in Liontown Resources, scuttling a mooted takeover of the lithium miner by Albemarle Corporation.
MP Materials’ predecessor was Molycorp, which collapsed under the weight of a $US1.7 billion debt before it was resurrected. The Australian Financial Review first revealed in February that MP Materials had held merger discussions with Lynas, which has a market capitalisation of $5.6 billion. Those discussions are not ongoing. Mrs Rinehart is regarded as a supporter of Lynas managing director Amanda Lacaze.
Analysts noted that, although aligned with the strategic ambitions of the US and Australia, a merger did not offer an immediate solution on heavy rare earths for either company. Both Lynas and MP Materials need a source of heavy rare earths such as terbium and dysprosium to complement their strengths in light rare earths in the form of neodymium and praseodymium.
Terra Capital’s Dylan Kelly said Hancock’s investment in MP Materials represented a shift in strategy, with Mrs Rinehart backing a producer rather than a developer or explorer like Arafura. He said if MP Materials successfully boosted its downstream processing capability, it could generate “Roy Hill-type cash flow”.
“Anything that is producing and not China-aligned is highly strategic. These materials are very, very hard to make and there’s a lot of demand in making magnets for electric vehicles and wind turbines,” said Mr Kelly, who invests in resources but not in Lynas or MP Materials. “To compete with China, it makes strategic sense to have scale and control of the Western supply chain ... but I don’t think it’s inevitable.”
