MP Materials accuses USA Rare Earth of magnet tech theft
MP Materials (NYSE: MP) has filed a lawsuit against USA Rare Earth (NASDAQ: USAR) alleging that its rare earth mining rival stole its proprietary magnet technology through an ex-employee, Bloomberg reported.
According to the lawsuit filed in a Texas court last Friday and seen by Bloomberg, MP said one of its former employees had shared “grain boundary diffusion” formulations with USAR, which later disclosed the information to a third-party technology company.
“USA Rare Earth has exhibited a pattern of recruiting employees from other companies and then using those employees to misappropriate trade secrets to accelerate USA Rare Earth’s own development,” MP alleged in the suit.
The Las Vegas, Nevada-based miner also claimed USAR had failed on multiple operational milestones and questioned the validity of the mineral resources being touted at the latter’s flagship Round Top deposit in Texas.
In an emailed response to MINING.COM, USAR said MP Materials’ complaint “has misrepresented our company, our culture, and our people,” adding that the company will defend against those accusations and respond “appropriately”.
Shares of USA Rare Earth fell over 3% during the early hours of trading, sending its market capitalization below $6 billion. MP Materials also fell 3%, trading at a market capitalization of $11.6 billion.
Key US rare earth players
MP — the only producer of rare earths in the US — has developed its own technology to turn the extracted minerals from its Mountain Pass mine in California into permanent magnets used in electric vehicles, defense systems and advanced electronics.
USAR is also looking to follow the same path by developing its Texas deposit, which it calls “the largest heavy rare earth deposit” in the US, and has already commissioned a magnet manufacturing facility in Stillwater, Oklahoma. It also has ambitions to expand abroad through building another plant in France and recently announced a $2.8 billion acquisition of Serra Verde Group, which owns Brazil’s only rare earth mine.
Both companies are seen as key players in the US government’s plans to establish a domestic rare earth supply chain to reduce its dependence on economic rival China. To facilitate this strategy, the Trump administration has made large financial commitments to both, including a $400 million equity investment in MP in July, followed up by a $1.6 billion agreement with USAR this year.
MP’s lawsuit places USAR under further scrutiny, as the latter’s deal with the White House had already received pushback from lawmakers, while the Serra Verde deal remains under review. USAR, however, has said it is not concerned by questions surrounding the government’s investment.
“At USA Rare Earth, we are focused on the real challenge: China’s dominance of the rare earth supply chain. The American people, our allies and investors are counting on us–all of us in this industry–to deliver a secure Western, rare earth value chain to protect our national and economic security,” USAR said in its statement to MINING.COM.
Ionic Rare Earths, AML ink MoU for US permanent magnet supply
Ionic Rare Earths (ASX: IXR) has signed binding sales agreements with Florida-based Advanced Magnet Lab to supply magnet rare earth oxides, specifically neodymium/praseodymium oxide and dysprosium oxide, under AML’s recently awarded US Defense Logistics Agency (DLA) contract for domestically produced high-grade sintered NdFeB permanent magnets for defence applications.
Both companies have signed a non-binding Memorandum of Understanding (MOU) for the collaboration on both the supply of magnet REOs and recycling of swarf and pre-consumer waste.
The news is a step forward in IonicRE’s strategy to establish secure, sovereign, and sustainable rare earth supply chains across the US and Europe, while expanding the company’s global refining and magnet recycling footprint, it said.
The partnership has the potential to support increasing requirements from the U.S. Department of War (DoW) linked to the ramp up of domestically manufactured military drone motors and other critical defence equipment requiring secure, traceable, and domestically sourced rare earth permanent magnets, amid increasing geopolitical instability, the companies said.
Under the program, IonicRE will provide critical rare earth oxide feedstock to support AML’s PM-Wire manufacturing platform, designed to enable scalable, traceable, and high performance permanent magnet production in the United States.
AML’s DLA-supported initiative includes alloy optimisation, advanced manufacturing development, and integrated supply chain collaboration across Western-aligned partners.
“IonicRE’s patented, made-in-Belfast magnet recycling technology offers an innovative solution for the supply of magnet REOs, and working with several Western magnet manufacturers, and now AML, we are building an integrated, ex-China rare earth supply chain across the Western world and beyond,” IonicRE CEO Tim Harrison said in a news release.
AML president Wade Senti added that the partnership will help ‘close the loop’ on supply for critical inputs to the US industrial base.
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