Hi all,
A couple of weeks back, I[ posted a \[DD\]](https://www.reddit.com/r/wallstreetbets/comments/1jqfz91/dd_how_to_profit_off_the_trade_war_500k_invested/?rdt=52089) where I explained my trading strategy as tensions over trade between the United States and China continued to increase. We are now at an inflection point and I expect that several events over the next few weeks will send stocks in my preferred sector soaring. In this post, I’ll explain what these events are and I will provide an update on my portfolio as far as this sector is concerned.
My thesis, again, remains the same as it always was:
>**Thesis:** the mining industry presents a massive opportunity anywhere from right now to the end of the present US administration and hopefully beyond. The investments that will matter most have to do with the processing, extraction, separation, and manufacturing of titanium, lithium, and rare earth minerals deemed critical. These investments must be allied with western interests, ideally operating in the United States. The issue that is most relevant is the complete market dominance China has over these metals and rare earth minerals.
**1. MP Materials Ceases Shipments to China (and why this is great news)**
The only vertically integrated operational rare earth mining and processing company in the United States is MP Materials. In previous posts, I canvassed a number of reasons to be bullish about this company, beyond the fact that they have the domestic side of the market locked down. These reasons included substantial stakes taken recently by institutional investors, as well as a number of executive actions and legislation.
This past Thursday, MP materials released a press statement noting that they have[ ceased shipments to China](https://mpmaterials.com/news/mp-materials-accelerates-strategy-to-reindustrialize-the-rare-earth-supply-chain/). This is significant, given their previous export history with China (and relatedly, their dependence on Chinese processing to refine their materials). They write:
>In response to China’s retaliatory tariffs and export controls, MP Materials (NYSE: MP) has ceased shipments of rare earth concentrate to China. Selling our valuable critical materials under 125% tariffs is neither commercially rational nor aligned with America’s national interest.
>We have been preparing for this moment since day one. Our mission, capital strategy, and execution reflect a long-term vision built to withstand short-term dislocation and emerge stronger.
I believe (in agreement) that any downward pressure on MP will be short-lived, although I am sure it will be volatile this week (today, very much so). The strategic timing of this press release, however, signals to me that they have already secured assurances from the present administration that they will support the company through purchasing agreements similar to those that will come from the planned executive order on[ stockpiling deep sea minerals. ](https://www.mining.com/trump-planning-to-stockpile-deep-sea-minerals-to-counter-china-ft/)
Moreover, ceasing shipments to China signals that MP materials has a margin of comfort with their capacity and ability to refine their own materials, such that they no longer feel bound to depend on China to process any of their materials whatsoever. Indeed, they write:
MP has invested nearly $1 billion to restore the full rare earth supply chain in the United States. Today, our California refinery is processing nearly half of our production, with virtually all of that material sold into markets outside China—including Japan, South Korea, and the United States.
**II. Critical Minerals Import Controls**
As if the above were not enough, the present administration recently issued an order to investigate critical minerals import controls[ *a la* Section 232](https://www.whitehouse.gov/fact-sheets/2025/04/fact-sheet-president-donald-j-trump-ensures-national-security-and-economic-resilience-through-section-232-actions-on-processed-critical-minerals-and-derivative-products/). The factsheet notes:
>\[This\] Order directs the Secretary of Commerce to initiate a Section 232 investigation under the Trade Expansion Act of 1962 to evaluate the impact of imports of these materials on America’s security and resilience. This investigation will assess vulnerabilities in supply chains, the economic impact of foreign market distortions, and potential trade remedies to ensure a secure and sustainable domestic supply of these essential materials.The investigation will culminate in a report detailing risks and providing recommendations to strengthen domestic production, reduce dependence on foreign suppliers, and enhance economic and national security.
Following this report, the administration may well decide to impose tariffs on critical minerals, taking the place of any current reciprocal tariffs pursuant to the April 2 order tariff.
I recommend that each of you interested in this sector read the fact sheet in its entirety. It does a fantastic job explaining just how critical this investigation is and provides an overview of the issues plaguing the domestic side of the industry, including price manipulation by China.
**III. Ukraine Minerals Deal**
As if the two points above were not enough, the present administration also signaled today that Ukraine plans to negotiate and sign a minerals deal within the next few weeks. They’ve already signed an[ agreement by way of a memorandum.](https://www.npr.org/2025/04/17/nx-s1-5366821/trump-italy-meloni)
Treasury Secretary Scott Bessent predicts that the deal would be signed around April 26.
>It's substantially what we agreed on previously when the president was here," Bessant said. "We had a memorandum of understanding. We went straight to the big deal and an 80-page agreement and that's what we'll be signing."
The question of what this agreement will look like in its final form is unknown. However, I would not be surprised if the raw materials obtained in Ukraine would be shipped to the USA for refining. If that were so, MP materials would stand to benefit tremendously.
**IV. Portfolio Update**
Before signing off, I wanted to also provide an update on the holdings in my portfolio:
https://preview.redd.it/rs9b47rcw7we1.png?width=803&format=png&auto=webp&s=2e8f423ee5d7ce51bc989883bfe79dac7486fd28
I hold a mixture of calls and shares in these positions. A number have already begun to return sizable gains. See, for example, recent profits from[ MP here](https://www.reddit.com/r/wallstreetbets/comments/1jz8w2l/the_mines_were_calling_400k_profit_day/).
Enjoy the opening bell, everyone!
