The Bull Case for MP Materials and U.S. Rare Earth Independence
January 7, 20266 min read
The Bull Case for MP Materials and U.S. Rare Earth Independence
Strategic case for MP Materials in rare earths
Tendrill
The Bull Case for MP Materials ($MP)
Rare earth elements have quietly become one of the most strategic commodities in the global economy. They are essential to electric vehicles, wind turbines, advanced electronics, artificial intelligence hardware, and modern weapons systems. Yet despite their importance, the supply chain for rare earth mining, refining, and magnet production remains overwhelmingly concentrated in China. This imbalance has pushed governments and corporations to secure alternative sources—and positioned MP Materials as a potentially pivotal player in reshaping the market.
Why Rare Earths Matter
Rare earth elements (REEs) are a group of 17 metals used to manufacture permanent magnets that convert electrical energy into motion. These magnets are indispensable for:
Electric vehicle (EV) motors
Wind turbines
Defense systems such as missiles, fighter jets, and radar
Consumer electronics including smartphones and data center hardware
While rare earths are not geologically scarce, economically viable deposits paired with processing capacity are limited. China controls roughly 60% of global rare earth mining and close to 90% of refining and magnet production, according to data cited by Reuters. This dominance gives Beijing significant leverage over global supply chains, as demonstrated by periodic export restrictions and price manipulation.
MP Materials: The Only Scaled U.S. Producer
MP Materials owns and operates the Mountain Pass mine in California, the only active and scaled rare earth mine in the United States. Historically, Mountain Pass produced ore that was shipped to China for processing. That model is changing rapidly.
MP is now building a fully integrated mine-to-magnet supply chain in the U.S., encompassing:
Upstream mining at Mountain Pass
Midstream separation and refining of neodymium-praseodymium (NdPr), the most valuable rare earths for magnets
Downstream magnet manufacturing, including automotive- and defense-grade magnets
This vertical integration is what differentiates MP from most Western peers, many of which remain either miners without processing capacity or early-stage developers.
Transformational U.S. Department of Defense Partnership
The most important catalyst in the MP Materials bull case is its landmark partnership with the .
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U.S. Department of Defense (DoD)
In July 2025, MP announced a multibillion-dollar agreement with the DoD designed to break China’s grip on rare earth magnets. Under the deal:
The DoD became MP’s largest shareholder, investing $400 million
The U.S. government guaranteed a price floor of $110 per kilogram for NdPr—roughly twice prevailing Chinese market prices
The DoD committed to 10-year offtake guarantees for 100% of output from MP’s planned “10X” magnet facility
MP secured an additional $150 million loan to expand heavy rare earth separation capabilities
According to Reuters, the agreement represents one of the most direct U.S. government interventions in critical minerals markets and effectively de-risks MP’s long-term pricing and demand outlook (Reuters).
“This is a game changer for the ex-China industry and a much-needed surge in magnet production capacity.” — Ryan Castilloux, Adamas Intelligence (via Reuters)
Apple, Automakers, and Commercial Demand
Beyond defense, MP has secured blue-chip commercial partners that validate its strategy.
Apple
In 2025, Apple signed a $500 million multiyear agreement with MP Materials to source high-performance rare earth magnets made in the U.S. The deal included a substantial prepayment to help fund MP’s magnet manufacturing expansion. For Apple, the agreement supports supply chain resilience and domestic sourcing; for MP, it provides long-term, high-margin demand (Yahoo Finance).
Automakers
MP has also signed long-term agreements with major global automakers, including General Motors, to supply NdPr and finished magnets for EV motors. These contracts tie MP directly to the secular growth of electric vehicles, where permanent magnet motors are increasingly favored for efficiency and performance.
Pricing Floors and Offtake Guarantees: A Structural Advantage
Traditional mining companies are exposed to volatile commodity pricing. MP’s recent contracts fundamentally alter that dynamic.
Key advantages include:
Guaranteed minimum pricing for NdPr through the DoD agreement
Long-term offtake certainty for magnet output
Reduced exposure to Chinese price dumping, which historically bankrupted Western producers
This structure transforms MP from a cyclical commodity producer into something closer to a strategic infrastructure asset, with government-backed economics.
The MP Materials story is inseparable from geopolitics. China’s control of rare earth refining and magnets has become a national security concern for the U.S. and its allies. Export controls, trade tensions, and military planning have all elevated rare earths to the level of energy and semiconductors in strategic importance.
By establishing a domestic mine-to-magnet supply chain, MP:
Reduces U.S. dependence on Chinese materials for defense systems
Supports allied industrial policy aimed at supply chain “friend-shoring”
Positions itself as a cornerstone supplier in an emerging ex-China rare earth ecosystem
The U.S. government’s willingness to directly invest capital, guarantee prices, and commit to offtake suggests rare earth independence is no longer optional—it is policy.
The Long-Term Bull Thesis
The bull case for MP Materials rests on several reinforcing pillars:
Structural growth in demand from EVs, AI infrastructure, and defense
Unique status as the only scaled, vertically integrated U.S. rare earth producer
Long-term contracts with the DoD, Apple, and automakers
Pricing floors and guaranteed demand that reduce downside risk
Powerful geopolitical tailwinds as the West seeks to unwind Chinese dominance
While execution risk remains—particularly as MP scales magnet production—the combination of government backing and commercial validation makes MP Materials one of the most strategically important materials companies in the U.S. market today.
In a world where supply chains are being redrawn along geopolitical lines, MP Materials is not just a rare earth producer—it is a key asset in the reshaping of global industrial power.