News Summary
Cleveland-Cliffs announces plans to enter the rare earths mining sector, aiming to reduce U.S. dependence on foreign suppliers. The move comes amid rising demand and geopolitical tensions, with potential sites identified in Michigan and Minnesota. The company’s shares surged following the announcement, reflecting strong market interest in domestic mineral production.
Cleveland – Cleveland-Cliffs, a leading steelmaker, has announced its plan to venture into the rare earths mining sector as demand for these essential minerals continues to rise. This strategic pivot comes in response to increasing geopolitical tensions and recent export controls imposed by China, which has historically dominated the global rare earths supply chain.
CEO Lourenco Goncalves stated that the company has pinpointed two promising sites in Michigan and Minnesota, where geological surveys have indicated the presence of potential rare earth deposits. The company is now working with geologists to evaluate the commercial viability of these sites. Following the announcement, Cleveland-Cliffs’ shares surged more than 20%, closing at $16.18.
Cleveland-Cliffs has a robust background in iron ore mining but is now expanding its focus toward rare earth minerals. These materials are critical for a variety of high-tech applications, including the manufacturing of components used in U.S. weapons systems, electric vehicles, semiconductor production, robotics, and other advanced technologies.
The urgency of developing a domestic rare earth supply is underscored by the U.S. reliance on Chinese imports. This dependency has prompted significant concerns, especially after China implemented stringent export controls on rare earth elements. In response, former President Trump indicated potential 100% tariffs on Chinese products as retaliation measures.
Currently, the U.S. has just one operational commercial rare earth mine, run by MP Materials, which has a contract with the Department of Defense to supply these critical minerals. Market analysts suggest that the federal government may look to form partnerships with additional U.S. companies in the rare earth sector to enhance national security and reduce foreign reliance.
If Cleveland-Cliffs successfully develops the identified sites in Michigan and Minnesota, the move would align with the U.S. administration’s strategy to achieve greater independence in critical minerals. Goncalves has highlighted the necessity of decreasing U.S. dependence on foreign countries, particularly China, for these essential resources.
In its third-quarter earnings report, Cleveland-Cliffs reported a narrower-than-expected loss of $0.45 per share and revealed a revenue figure of $4.73 billion. The company has also adjusted its full-year capital expenditure estimates, reducing them from $600 million to $525 million, and decreased Selling, General and Administrative (SG&A) costs by $25 million, bringing the total to $550 million.
The decision to delve into rare earths mining comes amid heightened competition and geopolitical pressures surrounding the acquisition of essential minerals. Cleveland-Cliffs aims to establish itself as a key player in this vital sector, potentially reshaping the landscape of domestic rare earth production in the United States.
Deeper Dive: News & Info About This Topic
HERE Resources
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Additional Resources
- Barron’s: Cleveland-Cliffs Stock Rises
- Wikipedia: Rare Earth Elements
- Fox Business: US Steelmaker Pivots to Rare Earth Minerals
- Google Search: Rare Earth Minerals
- CNBC: Cleveland-Cliffs Rare Earth Strategy
- Encyclopedia Britannica: Rare Earth Element
- Bloomberg: Cleveland-Cliffs Exploring Rare Earth Metals
- Google Scholar: Cleveland Cliffs Rare Earths
- Investopedia: Cleveland-Cliffs and Rare Earths
- Google News: Cleveland Cliffs Rare Earth
- Mining.com: Cleveland-Cliffs Eyes Rare Earths Production
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