Uncle Sam bets big on MP Materials, is there anything left for Lynas Rare Earths’ stalled Texas refinery?

Shares in Lynas Rare Earths spiked after MP signed a deal with the Pentagon, but is it really such good news for Australia’s rare earths pioneer?

The US Department of Defense has staked its hopes of breaking China’s rare earths domination on MP Materials with the sizeable purchase of company stock and an offtake agreement that combined will extend beyond a billion dollars.

Investors clearly believe Lynas will reap an indirect benefit from investment pouring in to strengthen a non-Chinese rare earths supply chain.

But could the direct impact on Lynas’ own US ambitions counteract any benefit? Has Uncle Sam put all its chips on MP or does it want to up the ante?

Lynas more than a year ago secured a $US288 million commitment from the Pentagon to build the Seadrift rare earths refinery in Texas.

But progress has stalled before a shovel has even struck dirt.

Lynas wants the DOD to fork out more cash for an unspecified cost blow-out and sort out a wastewater permitting issue.

Rumours are the largest government department in the US is not keen to budge and the Lynas relationship is strained.

Seadrift is yet to see any love from Donald Trump’s agenda to fast-track critical minerals projects. Others, like ASX-listed Dateline Resources and its Colosseum rare earths project in California, are being welcomed with open arms.

Late last year, The West Australian asked the DOD if the Lynas investment commitment was still on the cards.

The response was a definitive yes.

A couple of months ago the same question was put to the same government department.

This time, the response was quite different.

“No comment.”