Wyoming’s rare earth mines have caught the attention of Australian billionaire Gina Rinehart, who has gone on a global buying spree in recent weeks to acquire minority positions in the largest of these strategically significant mines.
At last count, there are at least four rare earth mining companies in the mix with Rinehart’s surging interest in the area, according to one senior executive who holds the top job on what could become one of the largest reserves in the world based near Wheatland, Wyoming.
Don Swartz, CEO of American Rare Earths, told Cowboy State Daily that Rinehart’s intentions through her investment arm, Hancock Prospecting Pty Ltd., should not be underestimated.
“Hancock is a very sophisticated mining investor, and I think people should take note that when someone who has patient capital, who wants to play the long game and is interested in the space. It’s a signal,” Swartz said.
The rare earth minerals bonanza is the result of consumers starved for magnet metals integral to the green transition to electric vehicles, wind turbines, consumer goods, robots and military drones, missiles and chips needed for sophisticated computing power.
The U.S. military and strategic national labs have signaled to the mining community that they want to accelerate rare earths development to free the nation from China’s dominance — thus the interest by Swartz’s company and others in Wyoming.
Hotter Than Hot
Rinehart has signaled her interest in the rare earth market in Wyoming through her global buying binge in the space, according to Swartz.
Her investments underscore “some sort of bifurcation of markets where there’ll be a multibillion-dollar industry dominated by the Chinese and, if you are Gina Rinehart, you’re looking for a long-term place to invest, and it’s pretty compelling with what you see,” he said.
“She has certainly put her money where her mouth is,” he added.
Swartz made his comments to Cowboy State Daily on the sidelines of the Next Frontier Energy Summit, sponsored by the Wyoming Energy Authority’s annual conference held in the Blue Community Events Center in Cheyenne, where more 200 people attended this week.
Swartz, whose company just turned down a $400 million takeover offer from a group of investors in California, called Papaya Growth Opportunity Corp I., a special purpose acquisition company (SPAC), underscores the kind of value American Rare Earths may have on its hands, and may whet the appetite that Rinehart wants in a rare earths play in Wyoming.
SPACs are essentially a corporate shell through which investor money is raised via a public offering.
Enough Cash
Swartz’s company, which recently indicated that its rare earth minerals project near Wheatland could need an infusion of $456 million to begin mine development and production, rejected the Papaya buyout offer because it has sufficient cash over the next 18 months to two years to make the mine happen in the Wheatland area, Swartz said.
The Wheatland-area mine could be one of the richest rare earths deposits in the world with an estimated 2.34 billion tons of rare earth minerals, he said.
The wave of purchases by Rinehart is heating up just as the United States and Australia continue their push for more mining and refining in the critical rare earths space.
The friendly allies want to sever their over-reliance on the rising power of China, which accounts for two-thirds of the world’s rare earth mining and 90% of the processing and refining capacity, according to the International Energy Agency.
Making Moves
No one knows where Rinehart’s going with her consolidation moves.
The mining magnate, who has more than $30 billion in wealth, has not returned requests for comment on her plans.
A few weeks ago, the consolidation possibilities were sparked when Hancock Prospecting took a 5.3% stake in U.S. rare-earths producer MP Materials Corp. in Las Vegas.
The stake represents about 8.8 million shares of MP’s 178 million outstanding shares.
Hancock not only took the MP stake, but also became a major shareholder this month in Australian-based Lynas Rare Earths, the largest producer of rare earths outside of China.
This month’s news involving Rinehart’s ownership positions in Lynas and MP comes on the heels of Lynas ending discussions on a potential merger with MP in February.
More recently she has taken a 6.17% stake in Australian-based Brazilian Rare Earths Ltd. with key rare earths mining operations in Brazil, and a 9.14% in Australian-based Arafura Rare Earths Ltd.
Swartz has his own perspective on what’s happening.
“When you think of the worldwide rare earth market, kind of ex-China, it is made up of Australia, the U.S. and Brazil, and she’s in all of the above,” he said.
Swartz isn’t sure whose hands his company might end up in.
That’s not something he’s worried about at this time because his company is working on mining permits and development plans with Wyoming and raising capital to get the project launched.
In a bifurcated rare earths world with Rinehart’s empire on one side and China on the other, Swartz is sure of one thing.
“The patient, long-term strategic capital sees a lot of value in the industry, and we agree with this thesis,” he said.
Pat Maio can be reached at pat@cowboystatedaily.com.
