Investor Revives Major Rare Earths Mine with Chinese Help

James Litinsky, who first visited the Mountain Pass rare earths mine in 2015, took a significant risk by investing in distressed bonds from Molycorp, the mine's owner. By the time he acquired the site in 2017, it had been largely abandoned, filled with water and in disrepair. However, Litinsky anticipated federal support for his venture into rare earths, which he has since received, totaling $105 million from both the Trump and Biden administrations. Surprisingly, he also garnered assistance from Chinese investors, who have helped finance the mine's revival and have become key customers. Under Litinsky's leadership as CEO of MP Materials, the Mountain Pass mine has transformed into a thriving operation. The company went public in 2020 through a SPAC deal, raising $545 million, and saw its stock price soar to $56 as demand for neodymium-praseodymium powder surged. However, the market has since been flooded by Chinese suppliers, causing prices to plummet and MP's shares to drop to $15. Despite these challenges, Litinsky's hedge fund, JHL Capital Group, reported impressive returns, with a gross annual compound return of 23.4% since 2006. Looking ahead, MP Materials is set to enhance its production capabilities with new equipment from the U.S., Germany, and Italy, aiming to produce 1,000 tons of high-performance magnets annually. Litinsky's strategic acquisition of the Mountain Pass operations for just $20.5 million during a bankruptcy auction has proven to be a calculated gamble, despite initial warnings about the site's difficulties. With significant investments and a focus on innovation, the future of the Mountain Pass mine appears promising.