COMMODITIES WAR AND UNDERVALUATION! D-Wave Quantum, MP Materials, Strategic Resources

Strategic Resources with Potential for Revaluation

Strategic Resources is positioning itself as a key supplier of high-quality iron ore. This is essential for a steel industry that is becoming more climate-friendly. The BlackRock project contains iron, vanadium, and titanium. It would be the first mine of its kind in North America. The focus is currently on the pelletizing plant at the Port of Saguenay in Québec. Its capacity is set to be expanded from 1.5 million metric tonnes to 4 million metric tonnes annually. According to CEO Sean Cleary, all documentation has been submitted for approval. In addition, all questions from the Québec Ministry of the Environment have already been answered.

It appears the conditions for successful development are in place. The facility is located at a strategically advantageous deep-water port. There is also access to additional industrial land. At the same time, the project is supported by both the Québec and federal governments. Added to this are financially strong shareholders, including Orion Mine Finance.

In the coming quarters, the focus is likely to shift to technical planning and financing. By the end of the year, Strategic Resources aims to largely complete the engineering work and construction preparations. The cost of building the facility is estimated at approximately USD 500 million. The majority of this is to be financed through debt. If everything proceeds as planned, financing negotiations could be concluded in early 2027, with construction set to begin in the summer of 2027.

The market environment is working in Strategic Resources' favor. The steel industry is seeking raw materials suitable for lower-emission production processes. High-purity pellets from Québec could be in particular demand in Europe, where the Carbon Border Adjustment Mechanism (CBAM) is increasing pressure on supply chains with high emissions profiles. Strategic Resources thus combines several attractive factors: access to infrastructure, political support, robust local partnerships, and a product tailored to the decarbonization of the steel industry.

For the experts at researchanalyst.com, Strategic Resources offers significant potential for revaluation. The current market capitalization is less than CAD 20 million. In contrast, earlier feasibility studies estimate the project's value at up to CAD 2 billion. Tailwinds include discussions on project financing, a focus on lower-carbon steel, and additional opportunities from vanadium battery materials and potential production in Finland.

https://youtu.be/ha8A2-FPIwk?si=a2oFSk-vcijGTP1m

D-Wave: Buy the Stock Now?

D-Wave Quantum shares are not for the faint of heart. In the first four months of the year, the share price fell from around USD 30 to USD 13. Then, the announcement of billions in US investments in the domestic quantum computing industry triggered a strong sector rally. As a result, D-Wave's stock rose back to around USD 30 by early June. This was followed by another round of significant profit-taking. The share is now trading about 20% lower at USD 24. From Mizuho's perspective, this currently presents a buying opportunity. Analysts recently raised their price target for D-Wave shares from USD 29 to USD 35.

On the operational front, there was a recent product announcement. D-Wave has announced a new simulator for gate-model quantum computing. It is intended to enable developers to engage in error-aware programming in the future. Unlike idealized simulations, users will gain insight into errors as they occur and will be able to develop applications and error-correction methods that more closely mirror the real-world characteristics of future quantum processors. According to the company, this is based on D-Wave's dual-rail technology.

The simulator is expected to be available via the Leap cloud platform and support up to 21 qubits. Planned features include an idealized simulation mode, hardware emulation, Monte Carlo simulations for the dynamics of quantum systems, and integration with the Ocean SDK. The offering is thus primarily aimed at developers and research teams who want to prepare algorithms and workflows before D-Wave's planned gate-model systems become available.

MP Materials: China Flexes Its Muscles

The "raw materials war" between the US and China has quieted down in recent months. At least in the media and in the public eye. But China is flexing its muscles again when it comes to rare earths. In May, the supply situation for heavy rare earths continued to worsen, particularly for Japan. Virtually no shipments of terbium and dysprosium oxide were recorded. Only small quantities of yttrium oxide arrived. At the same time, China's exports of rare earth magnets plummeted by 35% compared to April. As a result, the licensing requirements for strategically important rare earths and magnets—introduced as early as 2025—remain an effective geopolitical lever, particularly for manufacturers in the defense, electronics, electric mobility, and high-performance magnet sectors.

On June 22, the next step was taken: Beijing added 10 US companies to its export control list.** Among them are the rare earth companies MP Materials and USA Rare Earth, as well as the motor manufacturer Aveox. Chinese dual-use goods—that is, goods, software, and technologies with both civilian and military applications—may no longer be supplied to these companies. The measure is seen as a response to new US restrictions targeting Chinese companies. It illustrates how closely the conflict over raw materials is now intertwined with the technology and defense competition between Washington and Beijing. It is noteworthy that the US government, and President Donald Trump in particular, has not yet publicly reacted to the latest measures against these strategically important US companies. MP Materials and USA Rare Earth, two key players in the development of an independent American supply chain for rare earths, are among those affected.

MP Materials' stock has not yet benefited from this. In the past, the share price has risen during such conflicts. China's actions underscore just how strategically important an independent North American supply chain for rare earths has become. And this is precisely where MP Materials is positioning itself with the Mountain Pass Mine and the planned expansion of processing and magnet production in the US.

Strategic Resources shares present an exciting buying opportunity. In the coming months, positive news flow should drive the stock and break it out of its sideways trend. Quantum stocks are currently overshadowed by the AI hype. However, this could change at any time. That said, D-Wave's stock remains expensive and volatile. MP Materials is a bet on rare earths in the US. There is no question that the country needs these critical raw materials.