Top Rare-Earths Stocks Poised to Ride the U.S. Reshoring Wave
The strategic necessity of ensuring a domestic source of rare-earth magnets for U.S. manufacturing is a key part of the investment case for these two stocks.
Overview
The case for rare-earth stocks like MP Materials (NYSE: MP) and USA Rare Earth (NASDAQ: USAR) rests on the argument that demand for domestically produced rare-earth magnets will be strong enough to create favorable pricing conditions, and that both companies will effectively implement their "mine-to-magnet" business strategy. The two issues are intrinsically linked and closely tied to efforts to reshore manufacturing to the U.S.
Perhaps the most illustrative example of the importance of reshoring and the strategic significance of rare-earth materials and magnets comes from last year's events involving MP Materials.
Details
In the span of less than two weeks, the company entered into a transformative public-private partnership with the Department of Defense that secured a 10-year price floor commitment for its materials, a 10-year commitment to ensure magnets produced at MP Materials' new 10X facility will be purchased, commitments to $1 billion of financing, as well as a $150 million loan from the DOD and a $400 million investment in stock by the DOD.
Source
Originally published at www.fool.com.