To The Moon

My Highlight.

On 24 Jun 2025, I posted about $MP Materials Corp.(MP)$ and its plausible return to its 01 Apr 2022 peak of $56.54 per share.

Click here ! for the post.

While I was quitely confident that it will happen, I never expected it to be so soon.

What Happened ?

On Thu, 10 Jul 2025 - MP, the only US rare earth miner, saw its stock price jump about +51% (intraday) after announcing a major public-private partnership with the US Department of Defense (DoD) to quickly build a full American supply chain for rare earth magnets and cut dependence on foreign sources, especially China.

DoD will invest $400 million in new preferred shares of MP Materials, plus a warrant to buy more.

This opened up MP and give US government about a 15% stake and make it the company’s largest shareholder.

This partnership comes as US faces supply risks due to China’s control of about 70% of global rare earth exports and recent export restrictions.

Rare earth magnets are essential for products like smartphones, electric vehicles, wind turbines, and military equipment such as jets and submarines.

The new agreement is meant to:

• Boost domestic production.

• Strengthen supply chain security.

• Support both defense & commercial industries.

MP Materials will use the investment to build a 2nd US magnet manufacturing plant, called the “10X Facility,” at a new site.

When completed in 2028, this plant will raise MP Materials’ total US magnet output to about 10,000 metric tons per year, serving both defense and commercial customers.

The company also plans to expand heavy rare earth separation processing, at its Mountain Pass, California site, making it a key national asset for extracting, refining, and processing rare earths - all-in-one place.

The agreement also included several long-term commitments:

• DoD will buy all magnets produced at the new facility for 10 years after it opens, ensuring steady demand for MP Materials’ products.

• There is a 10-year price floor of $110 per kilogram for neodymium-praseodymium (NdPr) materials.

• This helps (a) protect MP Materials from market price swings and (b) guarantees stable cash flow.

On its part, MP Materials secured a $1 billion financing commitment from banks to help fund the new facility and expects a $150 million loan from DoD, to expand Mountain Pass operations.

The deal is part of a larger US strategy to secure critical materials and reduce reliance on China, which has used export controls as leverage in trade disputes.

The partnership is seen as a key move by the Trump administration to boost American supply chain independence and support high-growth industries.

Stock Price Movement.

Following the announcement, MP Materials’ stock price surged to its highest level in about 3 years. (see below)

As of 11 Jul 2025 morning

The agreement positions MP Materials as a leading supplier of rare earth magnets in the US, with strong government backing for future growth.

The company is also:

• Preparing to supply magnets to $General Motors(GM)$.

• Commissioning a new magnetics plant in Texas, to strengthen its downstream operations.

The partnership is expected to (1) create jobs, (2) support advanced manufacturing, and (3) help secure the supply of materials vital for both national defense and commercial technology.

By ensuring a reliable domestic supply of rare earth magnets, US aims to reduce risks from foreign supply disruptions and maintain its technological edge in key industries.

My viewpoints : (mine only)

It is indeed a strategic move by the US government in an attempt to shore up rare earth elements (REE) and be self-sufficient.

What the post failed to mention (I feel) :

• The types of “important” REE that China possess, that are vital to global industries eg. gallium, germanium, antimony & tungsten.

• The effort invested (time, resources, R&D innovations) for China to be where it today.

• Interesting to know that MP still ship its mined, raw form materials to China for refining, as US lacks significant domestic processing capability.

• This maybe the reason why MP is building its 2nd processing plant, the “10x Facility” to fortify its position as a self-sufficient processor.

• Otherwise, inspite of all the minings to be had, it is still reliant on China to process its mined REE.

Below is a summary, comparing China and MP capabilities on all things REE.

• At first glance, it looks there is a lot of catching up OR improvements (by MP materials).

• Looking at it from a “half full” viewpoint, it also means there is potential for MP’s valuation to rise overtime as it gears up to be the “independent” rare earth miner and processor, it has positioned itself to be.

All of a sudden, its future suddenly looks a tad brighter down the horizon, don’t you think?

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• Do you think it is a wise move by US government to get “involved” in commercial businesses ?

• Do you think there is more room for MP materials to rise beyond its 2022 peak of $56.54 ?

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