Australian iron ore billionaire Gina Rinehart has recently announced her 5.82% stake in Lynas Rare Earths as part of her plan to challenge China’s dominance in the production of critical technology metals. This investment follows her earlier reported 5.3% holding in U.S. rare earth miner, MP Materials. These moves signal Rinehart’s intentions to establish a significant presence in the rare earths market.
Rinehart’s interest in MP Materials prompted discussions about a potential merger between MP and Lynas earlier this year, with the aim of breaking China’s stronghold on rare earths production. The combined assets of MP, which operates the Mountain Pass rare earth mine in California, and Lynas, which operates the Mt Weld mine in Western Australia, could supply over 25% of the global market for rare earths. Although talks ended without a deal, negotiations may be revived given Rinehart’s emerging focus on building a large rare earth business alongside her successful iron ore operations.
Rinehart’s recent disclosure to the Australian stock exchange revealed that she and her family company, Hancock Prospecting, began purchasing Lynas shares just before Christmas, culminating in a $26 million investment that exceeded the 5% substantial shareholder reporting threshold. This strategic move aligns with her increasing investments in companies involved in rare earths production and exploration, including Arafura Rare Earths and a Brazilian rare earth company. These metals are crucial for manufacturing components used in electric vehicles and rocket guidance systems.
Both Lynas and MP are in the process of developing rare earth processing facilities in Texas, with the goal of reducing reliance on Chinese finished products in the rare earth supply chain. Despite facing challenges from Chinese overproduction that has led to low prices, both companies have managed to survive with appropriate financial support. Rinehart’s investments in these key players, along with her strong relationships within the industry, position her as a key player in orchestrating the proposed mining merger.
The potential merger between MP and Lynas, under Rinehart’s guidance, could have significant implications for the global rare earths market and reduce dependence on Chinese supplies. As Rinehart’s rare earth interests continue to grow, her long-term strategy remains undisclosed. However, her calculated investments and strategic positioning in the industry demonstrate her commitment to establishing a strong presence in the rare earths sector. Rinehart’s involvement in the western world’s major rare earth miners and explorers signifies a bold step towards challenging China’s dominance in this critical industry.
