Gina and Elon = Robot magnet rock

Yesterday I said I’d tell you who is quietly bankrolling Elon’s potential robot magnet mines.

And it starts with this little nugget of Australian mining folklore.

The year is 1952.

A bloke called Lang Hancock is flying his plane low through rotten weather down a gorge in the Pilbara.

He notices the walls are the wrong colour.

Rust red, practically staring back at him.

Hmm, he thinks. That’s iron ore.

Then he ponders it for the better part of a decade because a federal export ban meant nobody in this country was allowed to sell the stuff anyway.

The ban came off in December 1960, and the shrewd Hancock staked his claim in 1961.

Which, if you read yesterday’s Fat Tail Daily, is the same year a two-tonne hydraulic arm clocked on for its first shift at a car plant in New Jersey.

Funny how these things line up.

Source: ABC

The Pilbara iron ore industry grew out of that one fly-by.

It still pays a big chunk of this country’s bills.

Lang’s daughter now runs the show.

Gina Rinehart is Australia’s richest person by some distance.

Here’s the part that actually matters to the four small ASX companies I’ve been walking you through this week.

Gina is trying to repeat her dad’s trick.

Same instinct, different rock.

Except this time the rock ends up inside a robot rather than a blast furnace.

The rare earth ground I’ve spent alluding to, the stuff that holds what gets refined into the magnets everyone of Musk’s humanoids needs, is exactly what Gina is after.

So, I went and examined the paper trail.

What’s actually in the filings

Over the past year, Hancock Prospecting has built a stake of more than 10% in one of those four small ASX companies.

(And a similar stake in a larger one, which also appears in my new report, The Moonshot Manifest)

Line up the dates, and things get spooky.

$22.5 million into a capital raise last October. Then another $20 million into a bigger raise this June, lifting Hancock from around 6% to above 10% and keeping it the largest name on the register.

That June raise was priced at a discount, and the stock got sold off on the news.

That often happens in this part of the market.

Retail gets often taken for a ride (at least in the short-term)

Gina hasn’t let up, though.

And she didn’t stop at one target.

To see the pattern properly, look across your eyes the Pacific, where she has made nearly the identical bet at a vastly bigger scale.

She’s out-buying the Americans on their own turf.

As of the most recent filings, Hancock holds around 8.4% of a company called MP Materials, the single most important rare earths producer in the United States.

That’s the one the Pentagon itself put US$400 million into, to shore up America’s own supply chain.

The position was worth close to a billion dollars at last count, and it is bigger than the stake held by the American who actually founded the business.

The upshot: an Australian mining family now owns more of America’s flagship strategic minerals company than its own founder does.

Seriously, consider the implications of this.

And Gina has kept going back to the well.

Just recently, she picked up 6% of a separate US-listed rare earths outfit for another $31 million.

Same materials, same chokepoint, two continents.

One very clever mining shark is working the whole feeding ground, well before the rest of us have clocked there’s blood in the water.

Why should any of this matter?

For Gina, there’s blood in the water, and she clearly thinks a new investment killing looks to be nearby.

Maybe it’s a coincidence?

Sensible mining holdings portfolio diversification.

Or perhaps she knows Elon quite well.

You’ve seen the photos appearing in Fat Tail Daily over the last couple days.

Here it is again:

Source: The West Australian

So I’ll put it bluntly: To me, this looks like someone who has done the homework on where the robot magnet supply chain is thinnest.

And just quietly, getting set ahead of it.

Same story as 1952, but potentially with sharper instincts and a much bigger chequebook.

Back then, the world needed steel, and an Australian spotted the rock before anyone worked out what was underneath it.

The steel that the earliest robot, Unimate, worked with on factory floors.

This time, the world needs magnets for robots, for satellites, for defence hardware.

And the same family is doing exactly what it did the first time: getting in early.

There’s one more detail I can’t leave alone. In June, she reportedly took a billion-dollar stake in SpaceX itself, so she’s backing the rocks and the bloke who needs them (Elon).

I’m not telling you to follow Gina blindly

I’ve never met her.

And a big cheque from a big investor doesn’t turn a speculative small cap into a sure thing.

Small caps are inherently
speculative and risky.

AND IMPORTANTLY: None of the four companies I showcase in Elon’s Final Moonshot has a disclosed supply deal with Tesla or SpaceX. All four aren’t earning revenue yet. This is pure speculation.

But here’s what I do know.

When Australia’s most successful resources investor starts circling the exact rock the next industrial revolution runs on, multiple times, on two continents, before anyone is really talking about it…

This. Is. Worth. A. Look.

And again, it comes down to rocks. It always has in this country.

Rocks built modern Australia once, and I reckon ASX geologists and corporate operators are now about to have a decent crack at building the foundation for a robot revolution too.

Different rocks this time, and not only on our own dirt.

I’ve put the full story together, including details of two of the companies Hancock Prospecting has backed, its ticker, and what I’d pay for it today.