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Gina Rinehart’s Strategic Investment in Rare Earth Elements
Gina Rinehart in Western Australia.
In the realm of rare earth elements, few investors are as significant outside of China as Gina Rinehart, the wealthiest woman in Australia. While rare earths represent only a fraction of her immense $30 billion mining fortune, Rinehart has strategically positioned her family-owned company, Hancock Prospecting, to acquire substantial stakes in leading non-Chinese rare earth companies.
Her investments in rare earths total approximately $800 million, highlighted by an 8.5% stake valued at $317 million in MP Materials (NYSE:MP). This company operates the only active rare earths mine in the United States, located at Mountain Pass on the California-Nevada border. MP Materials is also nearing the completion of a plant in Fort Worth designed to produce high-strength rare earth magnets for General Motors.
Additionally, Rinehart holds an 8.2% share, worth $430 million, in Lynas Rare Earths (ASX:LYC), which is extracting rare earths from the Mount Weld deposit in Australia. Recently, Lynas has made strides by opening a processing facility in Malaysia and, under the auspices of the U.S. Department of Defense, is establishing a new processing plant in Corpus Christi, Texas.
Other notable investments include a 10% stake in Arafura (ASX:ARU), which is pursuing a government-backed mining project in the Northern Territory, and a 6% investment in Brazilian Rare Earths (ASX:BRE), a company exploring lucrative rare earth finds in northeastern Brazil.
At 71 years old, Rinehart is not content to be a passive investor. She actively advocates for the consolidation of the industry, as evidenced by her support of merger discussions between Lynas and MP Materials that ultimately did not succeed. Recently, both companies announced a shift to stockpiling rare earth concentrates, choosing to withhold shipments to China in light of looming tariffs. MP spokesperson Matt Sloustcher remarked, “Selling these critical materials under 125% tariffs is neither commercially rational nor aligned with the national interest.”
A known associate of former President Donald Trump, Rinehart attended both his election night gathering at Mar-a-Lago and his inauguration. Reports indicate that she spent $100 million in 2023 on two properties in Palm Beach, neighboring those of Trump. She has encouraged Australians to adopt a more ambitious mindset akin to Trump’s business approach. Following the death of her father, Lang Hancock, in 1992, Rinehart took the reins of Hancock Prospecting, which has since flourished under her leadership, most notably through its 70% ownership of the Roy Hill mine complex in Western Australia.
In January, Trump signed the Energy Emergency Act to accelerate the U.S. rare earth processing capacity and lessen dependence on Chinese supplies. Recently, Interior Secretary Doug Burgum initiated the Fast-41 program, which supports the development of 12 mining projects targeting critical minerals such as copper and lithium.
While Forbes has highlighted MP Materials extensively in recent coverage, Lynas Rare Earths has received less attention despite its crucial role. Originally gaining prominence in 2010 during a rare earths embargo imposed by China on Japan, Lynas has become a key supplier, particularly to Japanese manufacturers who rely on its products for a significant portion of their rare earth needs.
In 2019, Lynas announced the construction of a plant in Kalgoorlie, Australia, to refine raw rare earth ore into mixed concentrates. This facility, which opened in late 2024 at an investment of $800 million, will contribute its output to Lynas’s processing operations in Malaysia, which is ramping up its production capabilities. Future plans include a facility in Texas that will engage in complex extraction processes to convert raw materials into market-ready products.
According to preliminary plans provided by the Department of Defense, the Texas plant is set to use advanced methods to isolate valuable elements like terbium and dysprosium while removing impurities. With production projections aiming at 12,000 tons of Neodymium-Praseodymium (NdPr) annually, Lynas is poised to capture a significant share of global demand, expecting strong financial performance as demonstrated by a reported net profit of A$85 million from A$460 million in revenue last year.
CEO Amanda Lacaze, who has been pivotal in steering Lynas back from near bankruptcy in 2015 to a market cap of $5.3 billion, has acknowledged the difficulties inherent in attempting deals for rare earths in the political landscape, particularly referencing potential negotiations with countries like Ukraine.
The challenges presented by competition from China’s consolidated control over the rare earths market are substantial. Past attempts by companies like Hitachi to establish U.S. manufacturing operations were undermined by the cost advantage of Chinese suppliers, leading to financial setbacks and factory closures.
Consequently, the backing from the U.S. Department of Defense is essential for ensuring a continuous supply of refined rare earth metals needed for various applications, from military equipment to renewable energy technologies. As the demand for rare earth elements continues to rise, Australian officials have proposed the creation of a national rare earths reserve, potentially strengthening both their strategic leverage in trade negotiations and Rinehart’s own investment position in the sector.
Source
www.forbes.com