(Reuters) -MP Materials posted a smaller-than-expected second-quarter loss Thursday, as the U.S. rare earths miner benefited from higher production amid booming demand, sending its shares up nearly 8% after the bell.
The company – which operates the only U.S. rare earths mine in Mountain Pass, California – has been in the spotlight as President Donald Trump’s administration ramps up efforts to build out a domestic supply to reduce dependence on China.
MP Materials said rare earths concentrate production at the mine increased nearly 45% to 13,145 metric tons, while production for neodymium and praseodymium (NdPr) — the two most in-demand rare earths — jumped nearly 120% to 597 metric tons in the second quarter ended June 30.
Rare earths refer to a group of 17 metals used to make magnets that turn power into motion, including the devices that make cellphones vibrate. They are also widely used to make weapons, electric vehicles and other electronics.
Last month, the company signed a multibillion-dollar deal with the U.S. government to boost output of rare earth magnets, which are used to build weapons, electric vehicles and many electronics.
The deal, which would make the Pentagon the company’s biggest shareholder, was followed by a $500 million deal with Apple for the supply of rare earth magnets to the iPhone maker.
The drive to boost the domestic supply chain has powered a more than four-fold increase in the company’s stock so far this year.
The DoD, under the deal, will guarantee a floor price of $110 per kilogram for the two most-popular rare earths, a price nearly twice the current Chinese market level.
The price floor is one that had long been sought by U.S. critical minerals companies who have complained about China’s market manipulations.
The Las Vegas-based company posted an adjusted loss of 13 cents per share, compared with analysts’ expectations of 19 cents loss per share, according to data compiled by LSEG.
(Reporting by Vallari Srivastava in Bengaluru; Editing by Sriraj Kalluvila)
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