【California, 】Where is the United States’ Decisive Move to Shake Rare Earth Dominance? [US Stock Gem]

While China dominates the global rare earth market, there is a leading player in the United States going all out to achieve domestic supply chain self-sufficiency: MP Materials. This company, which possesses the entire value chain from mining to refining and magnet manufacturing, is growing its scale through partnerships with the US Department of Defense and Apple. This effectively means the US government directly owns a stake in a key company within a specific strategic industry to reduce dependence on China, going beyond the traditional methods of supporting related companies through subsidies and tax benefits. This is why MP Materials’ stock price reacts to rare earth-related policy news concerning China. As the need for US rare earth self-sufficiency becomes more urgent, many experts advise holding MP Materials for the long term.
MP Materials is the only company in the United States capable of performing the entire process from rare earth mining to refining and magnet manufacturing. It was founded in 2017 with the acquisition of the Mountain Pass mine in California. Rare earths, as the name suggests, mean ‘rare earth.’ They encompass a total of 17 elements, including Neodymium (Nd), Dysprosium (Dy), and Terbium (Tb). They are used as core materials in most advanced industries, such as smartphones, semiconductors, electric vehicles, and fighter jets. While these elements are widely distributed throughout the Earth’s crust, deposits with high concentrations are rare. The issue is not a lack of reserves, but the economic difficulty of mining them and the high-level technology required for refining and processing.
The center of the global rare earth supply chain is undoubtedly China. It holds 44% of the world’s reserves and is responsible for over 90% of refining and smelting. China regards rare earths as a national strategic resource and has embarked on intensive technological development and industrial cultivation. As a result, the leadership in the global rare earth industry naturally shifted to China.
In this context, MP Materials also possesses the character of a US ‘security asset.’ On July 10, the US Department of Defense made a $400 million preferred stock investment in the company, securing approximately a 15% stake and becoming its largest shareholder. Simultaneously, the Department of Defense agreed to purchase all products from the magnet production facility MP Materials will build for 10 years. It also guaranteed a floor price of $110 per kg for Neodymium-Praseodymium oxide (NdPr), a key raw material for high-performance permanent magnets. This structure is designed to defend profitability to some extent even if rare earth prices plummet. This strong support from the US government has attracted private sector participation. On July 15, Apple signed a $500 million rare earth magnet supply contract with MP Materials, making a $200 million advance payment. It also has long-term contracts with GM.
MP Materials’ greatest strength is its vertically integrated value chain, known as ‘Mine to Magnet.’ The structure involves mining rare earth ore from the Mountain Pass mine in California, processing it into NdPr oxide at its own smelting facility, and completing it as final magnet products at its Fort Worth, Texas plant. This vertical integration is evaluated as a foundation for absorbing the global magnet supply chain, previously dependent on China, into the United States.
On October 13, as China’s threat of rare earth export restrictions drew attention, the stock surged 21% in a single day, surpassing $95. However, the situation changed on October 30 with the US-China summit. The US and Chinese leaders held talks in Busan and agreed that China would suspend its rare earth export controls for one year, temporarily calming supply concerns.
As an atmosphere of easing US-China trade tensions formed, MP Materials’ stock price plummeted over 40% in the past month. According to Investing.com, on November 12 (local time), MP Materials’ stock price fell 2.2% from the previous day to $59.72.

From an investor’s perspective, the lack of immediate, visible performance improvement is a concern. There was growth in the second-quarter results. MP Materials recorded Q2 revenue of $57.4 million, an 84% increase compared to the same period last year, exceeding market estimates of $46.31 million. The net loss narrowed to $30.9 million. The Q2 loss per share was $0.13, beating the market estimate of a $0.18 loss. This was due to increased production of separated products, raising the proportion of NdPr oxide and metal sales. Materials segment revenue increased 20% to $37.5 million, and the magnet segment recorded total revenue of $19.9 million.
However, the growth momentum appears to have slowed in the third-quarter results. MP Materials’ Q3 revenue was $53.55 million, a 15% decrease compared to the same period last year. The company explained that the main reason for the revenue decline was its decision to halt all product sales to China to comply with the terms of its recent contract with the Department of Defense. The industry also forecasts short-term revenue slowdown and inventory pressure for MP Materials.

There are also warnings about high stock price volatility.

The industry is watching $50 and $39 as potential support levels.
However, there is no need to miss the opportunity. Future stock price recovery depends on several key events. First is the groundbreaking and operation schedule of the second magnet manufacturing plant, the ’10X Facility.’ When this facility, scheduled for trial operation in 2028, is commercialized, it will secure an annual magnet production capacity of 10,000 tons and realize the Department of Defense’s full purchase agreement. This could be a signal flare for securing performance-based revenue. Second is the schedule for additional contracts with Apple, GM, etc., or the start of magnet deliveries. In particular, the timing when Apple’s $200 million advance payment translates into future revenue could stimulate market expectations.

The industry largely holds a positive long-term outlook for MP Materials and the US rare earth industry. This is because the use of rare earths is expected to expand due to increasing demand for clean energy like electric vehicles and wind power.