Mentioned:
MP -9.59% CRML -11.17% SREMF -5.47%
China is tightening up their policy around rare earth elements. And it might spur the next wave of capital pouring into building out a full cycle rare earth supply chain in North America.
What’s happening:
- China’s Ministry of Commerce has publicly stated that they are further tightening their existing restrictions around rare earth elements globally and expanding their restrictions to begin including rare earth technology and recycling equipment
Why it matters:
- China’s previous ban on rare earth elements being exported sent major shockwaves through geopolitics and fuelled a much deeper investment into rare earth companies in North America, including the Pentagon’s notable $400M equity investment into MP Materials (NYSE: MP)
Going deeper:
- The Ministry of Commerce has explicitly banned Chinese companies for partnering with any companies outside of China on rare earth elements and the exportation of any rare earth elements for use in semiconductors will only be approved on a case by case basis
- The Ministry of Commerce has also publicly stated that any technology for mining and processing rare earth elements will not leave the country moving forward without explicit permission from the Chinese government
The intrigue:
- The Export-Import Bank of the United States has been granting letters of interests for debt financing for multiple publicly traded rare earth companies to accelerate new sources of rare earth supply lately in an effort to reduce America’s dependence on China, including previously offering Critical Metals (NASDAQ: CRML) a $120M USD loan as well as just recently offering Robert Friedland backed Sunrise Energy Metals (ASX: SRL) $67M USD in funding
