MP Materials and Lynas explore merger amid rare earth market turmoil — report

Inside the lab at Lynas’ rare earths deposit in Mt Weld, Western Australia. Credit: Lynas Corp.

MP Materials (NYSE: MP) and Lynas Rare Earths (ASX: LYC), two leading producers of rare earth elements, could be considering a merger, the Australian Financial Review reported Friday.

The Sydney-based publication suggests that the companies may be in talks to merge, potentially forming the world’s largest producer of rare earths outside China.

Both Lynas, with a mine in Western Australia and a plant in Malaysia, and MP, with operations in California’s Mountain Pass, have faced challenges due to plummeting rare earth prices.

Over the past year, MP shares have plummeted by over 50%, while Lynas shares declined by approximately 40%.

China’s recent ban on the export of rare earth extraction and separation technologies aims to safeguard its market dominance amid speculation about China cutting off supply amid deteriorating US relations.

Last year, Lynas managing director Amanda Lacaze told the AFR the company consistently receives merger and acquisition proposals. She reportedly emphasized the need for a source of heavy rare earths to complement its Australian operations and fulfill commitments to the US Department of Defense. The latter is funding a Lynas downstream processing plant in Texas.

Las Vegas-based MP Materials also has backing from the Pentagon, including a contract to boost heavy rare earths supply.