Time to Buy the Dip on MP Materials Stock?

MP Materials (NYSE: MP) is astatine the forefront of a captious accidental arsenic the U.S. seeks to unafraid a home proviso of indispensable minerals and rare-earth materials. That's because, according to probe from The Motley Fool, China presently accounts for 90% of rare-earth processing, which could airs a hazard to important proviso chains that trust connected these rare-earth elements.

The U.S. authorities is stepping successful and investing successful miner stocks done an ambitious "mine-to-magnet" strategy aimed astatine securing home production, and MP Materials has been 1 beneficiary. With the banal down 47% from its October peak, present mightiness conscionable beryllium the clip to invest.

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MP Materials holds a unsocial presumption successful the rare-earth magnet abstraction arsenic a home supplier and owns the lone rare-earth mining and processing tract of standard successful North America, the Mountain Pass Rare Earth Mine and Processing Facility successful California. Neodymium-praseodymium (NdPr) is simply a captious feedstock for rare-earth magnets utilized crossed sectors specified arsenic electrical vehicles, robotics, and defense.

Last year, MP Materials secured a landmark public-private concern statement with the U.S. Department of Defense to acquisition its NdPr products. In the agreement, the DOD established a terms level of $110 per kilogram for these important products for astir 10 years. In return, the U.S. authorities got a 15% involvement successful MP Materials.

The institution is undergoing a translation from a ore exporter to a vertically integrated mine-to-magnet manufacturer. As portion of this, the institution is cutting China retired of the picture. It had historically mined ore successful California and past sent it to China for processing; now, the full proviso concatenation volition beryllium domestic.

MP present retains its mined materials for home separation and refining astatine its Mountain Pass facility. Last year, it produced a grounds 2,599 metric tons of NdPr oxide (the earthy constituent utilized successful these important magnets).

It has begun commercialized accumulation of rare-earth metals and alloys astatine its Fort Worth, Texas, facility, wherever its existent magnet capableness is 1,000 metric tons. It plans connected expanding its Fort Worth Facility to nutrient 3,000 metric tons of magnets annually. Meanwhile, it has a 2nd facility, called 10X, successful the works, which volition summation its magnet manufacturing capableness to 10,000 metric tons annually.