Drone wars deepen West's critical minerals squeeze

Jim Cramer expressed optimism about MP Materials (NYSE: MP) during Mad Money, citing its critical materials and government support, but warned of a long timeline for results. MP reported Q2 revenue of $126.1M and a net loss of $20.3M, with NdPr production and sales increasing. The company is investing heavily in expansion, with targets for 2026 and beyond, but faces challenges in cash generation and approval processes.

USA Rare Earth (USAR) shares initially rose 4% to $18.35 after reports that Chinese suppliers halted rare earth shipments to U.S. customers, but then retreated to $17.70. The company completed a merger with Serra Verde, gaining scaled heavy rare earth production. Chinese President Xi Jinping's visit to Washington on September 24 could impact rare earth supplies and related stocks, including USAR, MP Materials (MP), and Critical Metals (CRML).

USA Rare Earth (USAR), MP Materials (MP), and Critical Metals (CRML) saw stock gains in pre-market trading after reports that some Chinese suppliers are refusing to ship rare earths to U.S. customers. The issue arises ahead of Chinese President Xi Jinping's visit, with rare-earth supplies expected to be discussed. China dominates the global rare-earth supply chain, and tensions may strengthen the case for domestic producers. USAR completed the acquisition of Serra Verde Group, while MP is expand

MP Materials' stock rose 32.3% in August, driven by strong Q2 earnings and strategic importance in rare-earth materials. The company reported 41% YoY increase in NdPr production and $17.6M in price protection income. Management confirmed progress on its '10X' facility and existing contracts with GM and Apple. The U.S. government's support and trade tensions highlight its strategic role.

Teck Resources (TECK) and Anglo American (AAL) are advancing their merger, with a special dividend of $4.5B by Anglo American extended to 45 days. The merged company will have headquarters in Canada, with primary listing in London. Integration of Teck's Quebrada Blanca and Anglo American's Collahuasi mines could add $1.4B in annual earnings, but Glencore (GLEN) is demanding a high price for its 44% stake in Collahuasi, potentially delaying the benefits.

Glencore's role is critical in Anglo American's $50bn merger with Teck Resources, focusing on combining Chilean copper mines. Anglo aims to finalize the deal by next month, pending Chinese approval. The merger could boost earnings by $1.4bn annually, but Glencore's leverage in negotiations is significant, according to the Financial Times.