TLDR
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MP Materials stock fell 6% after earnings despite beating forecasts.
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The firm posted a wider loss as it halted sales to China.
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Analysts still see upside due to U.S. defense deals and domestic expansion.
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CEO warns of a “new Cold War” over rare-earth supply chains.
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Market pessimism may overlook long-term U.S. independence goals.
MP Materials $MP shares tumbled 6% in premarket trading after the U.S. rare-earth miner reported quarterly results that, at first glance, looked solid. The company beat Wall Street estimates yet widened its loss due to a halt in sales to Chinese customers.
The third-quarter loss came to $41.8 million, or 24 cents per share, compared to $11.2 million last year. Excluding one-time items, MP lost 10 cents per share, better than analysts’ forecasts for an 18-cent loss.
Rare-Earth Shift Away From China
MP reported no revenue from rare-earth concentrate sales during the quarter. That shift followed a July agreement with the Pentagon that bans shipments to China. The deal also guarantees a floor price of $110 per kilogram for neodymium and praseodymium, two essential magnet metals.
CEO Jim Litinsky called the move a “strategic transition” to reduce U.S. dependence on Chinese processing. He framed it as part of a broader “Cold War 2.0” — an economic contest defined by control of key materials.
“In the last Cold War, America prevailed through military strength,” Litinsky said. “In Cold War 2.0, economic might itself has become the decisive measure of national power.”
Expansion and Government Backing
Despite current losses, MP is investing heavily in domestic production. The company expects its magnet manufacturing facility in Texas to begin commercial output by the end of 2025.
A second plant in California will process heavy rare earths like dysprosium and terbium, which are critical for electric vehicles and defense technology. MP plans to produce 200 metric tons annually by mid-2026.
The Pentagon’s long-term contract provides both price stability and guaranteed demand. That support underscores Washington’s push to secure supply chains for strategic materials.
Market Volatility Masks Long-Term Gains
Investors remain cautious. Rare-earth stocks such as USA Rare Earth $USAR and Ramaco Resources $METC also dropped after earnings, extending a 37% slide since October highs. The declines followed cooling fears of Chinese export restrictions.
Still, analysts like George Gianarikas of Canaccord argue that the market is missing the bigger picture. He raised his price target for MP to $79, maintaining a Buy rating, and said the U.S. is on an “unshakeable path” to rare-earth independence.
Realized prices for neodymium-praseodymium oxide rose to $59 per kilogram from $48 last year. Gianarikas expects them to exceed $100 in the coming years as demand from electric vehicles and defense projects accelerates.
A Strategic Industry in Flux
MP’s transformation from exporter to domestic processor mirrors a larger industrial shift. The U.S. now views rare earths not just as commodities, but as tools of national security.
Despite recent volatility, MP Materials remains the only active rare-earth miner in the Western Hemisphere. That unique position could prove invaluable as geopolitical tensions rise.
Investors may be underestimating how critical government backing and fixed pricing will be for future profitability. For those betting on U.S. supply chain independence, MP’s current dip could be an entry point rather than an exit signal.
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