MP Materials is America’s leading producer of rare earth materials and operator of Mountain Pass. MP Materials CEO Jim Litinsky joins Yahoo Finance’s On The Move panel to weigh in on restoring the rare earth supply chain and discuss trading publicly through a merger with Fortress Value Acquisition Corp.
JULIE HYMAN: James Litinsky is MP Materials CEO. MP Materials is going to be listed on the NYSE through a merger with Fortress Value Acquisition Corp. MP Materials, by the way, the operator of the only functioning rare earths mine in the US Mountain Pass in California.
James, it’s good to see you again. So why did you decide to do– go public through a SPAC versus, say, doing an IPO?
JAMES LITINSKY: Sure. Thanks, Julie. It’s great to be back on your show. So we considered a lot of options. As fiduciaries, we looked at an IPO. We looked at some strategic options. The SPAC structures have changed a lot.
Historically, they had a, you know, sort of mixed incentives with the structure. But we were able to partner up with Fortress and put together a deal that we thought was great for all stakeholders and got us to market efficiently. So it was really a great structure for us.
JULIA LA ROCHE: James, it’s Julia La Roche. Let’s talk about business for a second. It just struck me, you all are the only rare earth minerals, I guess, miner in the United States. Is that correct? Is that what I heard here?
JAMES LITINSKY: Sure.
JULIA LA ROCHE: Yeah, let’s talk about that.
JAMES LITINSKY: Yes.
JULIA LA ROCHE: Yeah, I would love to unpack that further because, obviously, rare earths are used in so many different things. They’re super important. What’s kind of going on in your space these days? I think our viewers would be especially interested from your point of view.
JAMES LITINSKY: Sure. Well, the first thing is is rare earths are actually not particularly rare. What’s rare is the concentration in an ore body, as well as the scaled chemical production that’s required. It’s really closer to a specialty material. Over the last couple decades, the Chinese have taken over the industry due to sort of state subsidy, as well as lax environmental controls.
Our site, though, is sort of the story best world-class asset in rare earths. We have the benefit of having a very high concentration of rare earth, as well as $1.7 billion of invested capital in the chemical separations facility that’s required that is co-located right there. And so our site actually sits in California, so we have the benefit of not only being able to compete globally cost effectively, but sustainably as well.
DAN HOWLEY: James, you know, you talk about China and the issues there. Obviously, there’s a lot of rare earth minerals in Africa as well. The environmental impact of both of those can be severe.
How do you guys mitigate that when it comes to your mining operation? And what exact minerals are you mining? What are they going into?
JAMES LITINSKY: Sure. Well, I think first and foremost as a company, we need to just be maniacal about costs and be a low-cost producer. We are one of the lowest-cost producers in the world. We have a significant head start by the fact that we have the ore body that we have. We don’t have the environmental issues that they have in China, or Africa, or elsewhere in the world.
But I think also as this next decade unfolds, what we really would like to see is sort of a broader push from– from the major corporate citizens. If you think about the Teslas and Apples of the world, their consumers are really focused on sustainability. We can certainly talk about the boom that’s now happening in electric vehicles and the decarbonization that will happen in the decade to come.
And we think it’s really important– for example, on our site, we use one twentieth of the water that a typical alternative operation would use. We have a number of attributes that– that probably would be too technical to get into, but we are a green, environmentally-friendly site. And we think that the consumers who are purchasing these sustainable materials specifically for electric vehicles, wind turbines, drones, robots that they do care.
And so I think you’re going to see a broader push from the big companies to– to push for their supply chain. I would say, for example, on the last earnings call, Elon Musk said that they’re very focused on getting environmentally conscious nickel. I think you’re going to see those kinds of statements really play out across the mining materials space, which– which means, you know, our company is really well-positioned to provide product.
JULIE HYMAN: James, very quickly, speaking of well-positioned, first of all, is Tesla a client? And second of all, the Trump administration wants to source more rare earth minerals in the United States. Are you getting assistance from the administration?
JAMES LITINSKY: Well, so we represent about 15% of the global rare earth supply today. Our plan is to continue to move downstream. And ultimately, the rare earth materials get made into magnets, so the Teslas of the world, for example, are purchasers of magnets. They currently buy all of their magnets in China. But as you mentioned, the Trump administration, or any administration, I think this is a nonpartisan issue.
For supply chain reliability and sustainability– sustainability, we really want to get a lot of this production back here in the United States of America. And so that is really our company, which, you know, MP Materials, that’s our focus, strategically, is to continue to move downstream to transform our business from just providing materials to onshoring the entire supply chain all the way down to the magnets and beyond. So we hope to– you know, we hope you can hear– you’ll hear good things from us on that front in the years to come.