Rare earth supply chain competition

What happened: MP Materials sued USA Rare Earth, alleging patent infringement, but USA Rare Earth dismissed the case as meritless. Meanwhile, the G7 agreed to reduce rare earth reliance on non-partner countries to below 60% by 2030. MP Materials and USA Rare Earth both stand to benefit from this, with MP Materials in production and USA Rare Earth having commissioned a processing facility. Energy Fuels also received a $725 million U.S. backing for its rare earth buildout.

Market impact: The rare earth sector has seen increased investor interest due to geopolitical tensions and supply chain disruptions. The G7's plan to reduce dependence on China-dominated supply chains has driven up shares of MP Materials (NYSE:MP) and USA Rare Earth (NASDAQ:USAR). Energy Fuels' (NYSE:UUUU) financing package further boosts the sector's growth prospects.

What to watch next: Investors should monitor the outcome of MP Materials' lawsuit against USA Rare Earth. Upcoming earnings reports from MP Materials (Q2 2022 on Aug 11) and USA Rare Earth (Q2 2022 on Aug 15) will provide insights into their progress. Additionally, the implementation timeline and details of the G7's critical minerals plan will be crucial to watch.