MP material Stocks soared Wednesday on an agreement between the U.S. Department of Defense and Saudi mining company Marden to develop a rare earths refinery in Saudi Arabia.
The US rare earth mining company’s stock rose 8.61% to close at $63.55.
MP and the Department of Defense will hold a 49% stake in the joint venture, the company said. Marden’s position will not fall below 51%. The Department of Defense will fund the U.S. portion of the operation, with MP providing technical and marketing expertise.
The binding agreement to establish the joint venture was signed after MP and Marden signed a memorandum of understanding in May. The deal is structured to “significantly expand MP’s global footprint” and “ensure alignment with U.S. surveillance and national security objectives,” the company said.
MP material inventory for the past 6 months
MP is also discussing possible cooperation with Saudi Arabia’s stand-up magnet manufacturer.
The Pentagon signed a landmark deal with MP in July that included an equity stake, a price floor and an offtake agreement. The Trump administration is investing in MP with the aim of reducing U.S. dependence on China for rare earth imports and establishing a domestic supply chain.
MP CEO James Litinsky described the company as America’s “national champion” for rare earths. Rare earths are critical raw materials in U.S. weapons platforms, electric vehicles, clean energy technology, semiconductor manufacturing, and consumer electronics.
goldman sachs initiated convergence on MP on Tuesday with a price target of $77, suggesting an upside of about 32% from Monday’s closing price.
“We believe MP’s downstream expansion into refining and magnet production, facilitated by our partnership with the U.S. government, will strategically position MP as a key supply chain component for rare earth refining and magnet production,” Goldman analyst Brian Lee told clients.
