The outlook for US rare earth materials production has improved on two fronts, indicating a shift towards increased domestic production. The Defense Department is investing heavily in MP Materials, which operates California’s Mountain Pass mine, by buying $400 million worth of preferred stock for a 15% stake.
This move is part of the firm’s largest shareholder and will help finance new mineral separation capabilities and support a magnet factory in Texas. The deal includes 10-year offtake agreements and price floors, aiming to boost US rare earth production.
Another significant development is Ramaco Resources’ surged share price after a Fluor study revealed the technical viability and economics of extracting rare earths from Brook Mine, a coal site in Wyoming. Energy Secretary Chris Wright will attend a ribbon-cutting ceremony at the project on Friday.
The deal signals a Trump-era approach to aggressively using industrial policy to bolster US rare earth access, despite ongoing trade talks with China aimed at easing export restrictions. MP Materials’ CEO James Litinsky downplayed concerns about nationalization, stating that the partnership is a public-private collaboration.
MP Materials’ stock soared 51% on news of the deal and has seen significant gains in the past year. Analysts are closely watching the project’s progress, with some expressing both optimism and caution. As the US seeks to reduce its reliance on China for rare earth magnets, this development marks an important step towards increasing domestic production and reducing economic vulnerability.
The significance of this move lies in the essential role small-but-powerful rare earth magnets play in high-tech products, including cars, robots, electronics, and weapons. With China controlling 90% of global supply, any disruption to this market could have significant consequences for the US economy.
Source: https://www.axios.com/2025/07/11/rare-earths-us-pentagon