America’s Rare-Earth Revival: How MP Materials Is Challenging China’s Dominance

By IndraStra Business News Desk

In the arid expanse of Fort Worth, Texas, workers in protective gear labor over vats of molten metal, heated to a blistering 1,800 degrees Fahrenheit, crafting rare-earth metals—a resource the United States has scarcely produced at scale in recent decades. This scene at MP Materials’ factory represents a bold effort to challenge China’s near-total control over the global supply of rare-earth magnets, essential components in everything from electric vehicles to missile systems. MP Materials, the nation’s largest rare-earth miner, is at the forefront of this endeavor, backed by a significant new investment from the U.S. Department of Defense. The company’s journey, marked by ambition and obstacles, reveals both the promise and the complexity of rebuilding a domestic industry that has long been dormant. 
Rare-earth metals, a group of 17 minerals like neodymium and samarium, are prized for their ability to create magnets that can attract objects hundreds of times their own weight. These magnets power a vast array of technologies, from smartphones to military hardware. For years, China has dominated this sector, controlling over 90% of the world’s rare-earth magnet supply. This dominance has given Beijing significant leverage, as demonstrated when it recently restricted exports, forcing companies like Ford to halt production and pay exorbitant prices for magnets—up to $15 for components typically costing less than 40 cents. “We cannot get any high-power magnets without China,” Ford CEO Jim Farley said at an event in late June, capturing the urgency of the situation. 
MP Materials, operating the only U.S. rare-earth mine at Mountain Pass in California’s Mojave Desert, has emerged as a key player in addressing this dependency. The mine, once a global leader in rare-earth production, fell into bankruptcy in 2015 after Chinese exports flooded the market and cratered prices. James Litinsky and Michael Rosenthal, childhood friends with finance backgrounds, acquired the mine in 2017, driven by a belief in its strategic importance. “There was a belief that it couldn’t be fixed,” Litinsky, MP’s chief executive, said, reflecting on the skepticism they faced. With just eight workers and a remote site populated by wild donkeys, the company’s early days were daunting. “We’ve got no money, we’ve got eight people, the site was bankrupt, everyone says the U.S. can’t make rare earths,” Rosenthal, the operations chief, recalled. 
To survive, MP initially partnered with Shenghe Resources, a Chinese company that provided financing in exchange for an 8% stake and processed MP’s ore in China. This arrangement allowed MP to stabilize and begin building its own processing capabilities, supported by roughly $100 million in Pentagon grants. By 2023, MP had become the only U.S. company separating rare-earth minerals at commercial scale, enabling direct sales to buyers in the U.S., Japan, and South Korea. The company’s California plant, filled with giant settler-mixers, now isolates valuable rare-earth elements, a process Rosenthal likened to sorting blue M&Ms and extracting their cocoa. This marked a significant step toward bypassing Chinese refiners. 
The Pentagon’s recent investment, announced on July 10, 2025, has dramatically expanded MP’s ambitions. The Defense Department, leveraging Cold War-era legislation, committed $400 million in preferred stock, becoming MP’s largest shareholder with a 15% stake. This deal, which includes a $150 million loan for heavy rare-earth separation at Mountain Pass, will enable MP to triple its magnet production capacity to 10,000 metric tons annually at its Fort Worth facility, named “10x.” A second, larger factory is planned for 2028, with its output guaranteed for defense and commercial buyers over the next decade. The government has also set a price floor of $110 per kilogram for two key rare-earths—nearly double the current Chinese market price of $52 per kilogram—to shield MP from China’s market manipulations. “This is a game changer for the ex-China industry and a much-needed surge in magnet production capacity,” said Ryan Castilloux of Adamas Intelligence. 
The deal sent MP’s stock soaring nearly 50% in a single day, with shares reaching $43.95, their highest since April 2022. The stock has tripled in value this year, reflecting investor confidence. Analyst George Gianarikas of Canaccord Genuity reiterated a Buy rating, raising his price target from $27 to $55 per share, implying a potential 22% upside. The market’s optimism is evident in MP’s high forward price-to-earnings ratio, a sign that investors anticipate steady profitability, particularly with government contracts. A 25.8% short interest, valued at $1 billion, suggests a possible short squeeze, further fueling the stock’s rise. 
MP’s progress is part of a broader U.S. effort to rebuild its rare-earth industry. Companies like Vulcan Elements in North Carolina and Noveon in Texas are ramping up magnet production, while Germany’s VAC is set to open a Pentagon-funded factory in South Carolina. These projects could collectively produce several thousand metric tons of magnets by year’s end, covering a third or more of U.S. imports. “As we start to build out our permanent magnet manufacturing facilities in the U.S. and elsewhere, China starts to lose that leverage,” said Gracelin Baskaran of the Center for Strategic and International Studies. Some experts believe that with sustained investment, the U.S. could significantly reduce its reliance on Chinese magnets within three to five years. 
Nevertheless, the road forward is lined with difficulties. Mining and processing rare earths is costly and complex, requiring specialized equipment and expertise. MP’s Fort Worth factory, adorned with an American flag made of hard hats, faced delays sourcing non-Chinese machinery, with lead times stretching up to two years. Mastering magnet production, particularly techniques like grain boundary diffusion, demanded years of research in a small facility dubbed “the Garage.” The company also struggled with profitability as Chinese overproduction drove global prices down, slashing MP’s stock to a fifth of its previous highs. “I don’t like to be betting behind losing horses,” CNBC analyst Jim Cramer remarked last year, echoing investor skepticism. 
China’s dominance remains a formidable barrier. With superior mines, cheap chemicals, a skilled workforce, and a tolerance for toxic mining waste, China maintains a stranglehold on the industry. Recent export bans on rare-earth technologies and restrictions on scientists sharing knowledge clearly reflects Beijing’s intent to preserve its advantage. In April, China’s requirement for elaborate export applications disrupted supplies, causing a 75% drop in magnet exports last month. Even with U.S.-China trade truces, exports to defense suppliers remain limited, pushing companies to seek costlier alternatives. MP’s magnets, like those of other U.S. producers, are expected to cost at least 50% more than Chinese ones, a premium some firms are willing to pay for supply-chain security. 
MP’s reliance on its California mine also poses risks. While it is the Western Hemisphere’s largest rare-earth source, it lacks sufficient heavy rare earths, critical for high-performance magnets. Sourcing these minerals elsewhere is challenging, as few non-Chinese suppliers exist. Additionally, scaling up production and operating a new, massive facility could introduce unforeseen issues. Some competitors criticize the Pentagon’s heavy investment in MP, arguing it may stifle smaller startups. “It’s the government picking winners and losers,” said an executive at a rival rare-earth business, warning that favoring one company could harm long-term U.S. competitiveness. 
Even with these challenges, MP’s leadership remains optimistic. “There’s going to be a lot of growth opportunities,” Litinsky said, emphasizing the broader industry benefits of a secure MP. The company’s partnership with General Motors, secured after GM sought to mitigate supply-chain vulnerabilities, highlights its growing commercial reach. By hiring experienced metallurgists like Alan Lund and scouring global talent pools, MP has built a team capable of tackling the technical complexities of magnet production. 

The stakes are definitely high. Rare earths are not just industrial inputs; they are critical to national security and economic stability. The Pentagon’s investment reflects a recognition that controlling these resources is vital in an era of heightened U.S.-China tensions. MP’s Fort Worth factory, with its furnaces and racks of compacted rare-earth powders, symbolizes a nation striving to reclaim a lost industry. Yet, the road ahead requires sustained commitment, innovation, and resilience. As MP Materials pushes to become a national champion, its story encapsulates the delicate balance between ambition and reality in America’s quest for resource independence.

With reporting by the Wall Street Journal and Reuters.

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