The Strategic Play: Why MP Materials Could Be a Winner in America's Rare Earth Race

Government Backing Changes Everything

Here’s what most investors missed: MP Materials isn’t just another mining stock. In July 2025, the U.S. military made a historic move—committing to a decade-long partnership that guarantees the company won’t fail. The deal is straightforward but powerful: the government locked in a price floor of $110 per kilogram for NdPr products over the next 10 years, essentially removing market volatility from the equation.

But there’s more. Uncle Sam didn’t just sign a contract; it wrote a check. The government invested $400 million directly into MP Materials stock and is now the largest shareholder. They’re also funding a magnet manufacturing facility in Texas where the military will purchase 100% of production for defense and commercial applications. This isn’t capitalism—it’s national security policy wrapped in a business deal.

From Underdog to Strategic Asset

MP Materials operates the Mountain Pass Rare Earth Mine, America’s most significant producer of critical minerals. For years, the company struggled because Chinese imports were cheaper, and refining rare earths cleanly remains expensive. The economics simply didn’t work.

Then everything shifted. Beyond the military agreement, Apple signed a $500 million partnership in July 2025 to source American-made rare earth magnets from recycled materials. Two massive wins in five days transformed MP’s market position.

Here’s the brutal reality: rare earth minerals aren’t actually rare—they’re everywhere in the earth’s crust. The challenge is extraction and refining without destroying the environment or the health of surrounding communities. China dominates because it’s willing to accept the environmental cost. America wasn’t. MP Materials solved that equation, and now the government is betting on American independence from Chinese supply chains.

The Numbers Tell a Story

Revenue grew at a 15% compound annual growth rate over five years, though recent quarterly results dipped. The company isn’t profitable yet. But profitability isn’t the point anymore. With the government as both investor and guaranteed customer, with the NdPr price locked at $110 per kilogram for a decade, and with 100% of Texas facility output pre-purchased, the financial model is fundamentally different.

The stock has already rallied 27% year-to-date. The run probably isn’t over.

Why This Matters

When national security becomes intertwined with a company’s business model, traditional valuation metrics become less relevant. The U.S. military doesn’t allow strategic assets to go bankrupt. They plan for the long term, invest heavily, and create stable demand.

MP Materials now has something almost no other miner possesses: predictable revenue and a price floor that removes downside risk. That’s a rare advantage in a cyclical industry—especially in one as strategically critical as rare earth minerals.