On February 22, MP Materials Corp. (NYSE: MP), a rare earth metals manufacturer, obtained a contract from the US government. For the implementation of new products, the company now has secure funding.
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Because the US wants to lessen its reliance on Chinese supplies, the timing for implementation was probably well picked. A $35 million government grant to MP Materials for the development of a plant for the extraction and processing of rare earth metals was one of the first moves in this approach. This is in addition to the $10 million from the Pentagon that MP Materials got in 2020.
These grants are an insignificant part of the amount required for the construction. So, MP Materials invests $ 700 million of its own funds in production. Government backing, on the other hand, indicates that MP Materials will get government orders for raw materials and finished goods in the future.
Furthermore, in August, the United States passed legislation granting huge loans and tax advantages to companies that manufacture rare earth magnets and other comparable items, such as lithium for batteries.
All of this is good news for MP Materials’ long-term prospects. For such a firm, government assistance is required. Rare earth elements, despite their name, can be found in a variety of rocks and are even dissolved in seawater. They are, however, difficult and expensive to extract; often, mining is done in conjunction with the development of other minerals. Mining profitability can be considerably improved with government assistance.
MP Materials Corp. (NYSE: MP) stock fell -0.80 percent to settle at $40.98 on Tuesday. Over the last year, MP shares have risen 7.79 percent, and they have gained 0.64 percent in the previous week. The stock has been down -4.03 percent in the last three months, and it has dropped 29.32 percent in the last six months. Furthermore, the company’s current market capitalization is $7.34 billion, with 176.05 million outstanding shares.