MP Materials shares jump as China moves to restrict rare earths used to produce semiconductor chips

Shares of MP Materials (NYSE:) gained 9.2% in pre-open trading Wednesday after China said it will enforce export restrictions on certain rare minerals essential for the production of semiconductor chips.

Starting from August 1st, the Chinese Ministry of Commerce announced that the exportation of germanium and gallium metals will require exporters to obtain licenses from the ministry. China said this measure has been deemed crucial to safeguard national security and protect the nation’s interests.

China currently produces about 650,000 kilograms of gallium per year or 94% of global production.

MP Materials, for its part, owns and operates Mountain Pass, the only integrated rare earth mining and processing site in North America. It is unclear if they have the capacity to produce gallium at this point.