Meteoric Resources (MEI AU) Taps Market, As Washington Also Targets Brazil's Rare Earths

• Meteoric Resources Nl (MEI AU), one of a handful of Aussie-listed plays developing Brazilian rare earths mines, is seeking to raise A$40mn (@ A$0.17/share, a 1.5% discount to one-week-VWAP).

• And yesterday, the Trump administration-backed USA Rare Earth (USAR US) announced a punchy US$2.8bn takeover of Serra Verda, Brazil’s only operational producer of rare earths.

• Brazil boasts the world’s largest rare earths reserves after China. Both these deals/projects centre on scarcer, harder to extract, heavy rare earths, essential for EV magnets and defence applications.

The Trade:

• I don’t have a strong opinion on Meteoric Resources Nl (MEI AU) here.

• There remain permitting and execution risks.

• Price fluctuation is heavily sentiment-driven. And the ongoing Iran crisis has significantly boosted EV sentiment.

• I see the average price increase for Chinese EV plays up 11% since the crisis unfolded.