World

MP Materials Navigates “Cold War 2.0”: How a Strategic Pivot Aims to Fortify US Rare Earths Supply

MP Materials reported a loss, ceasing China sales. It shifts to domestic rare earths/magnet production.

byAndres Castro

November 6, 2025, 10:39 PM

A large, yellow haul truck drives on a dirt road in a rocky open-pit mine, with piles of ore.

A mining haul truck carries rare earth minerals at an Australian outback mine. By BJP7images / Shutterstock.com.

Executive Summary

MP Materials reported a widened third-quarter loss of $41.8 million after ceasing sales of rare earths concentrate to Chinese customers in adherence to a U.S. government agreement.

The company’s strategic pivot aligns with a Pentagon investment agreement, which guarantees a floor price for key rare earths and supports establishing a domestic U.S. rare earths supply chain and magnet manufacturing capability.

MP Materials is expanding its domestic production, with commercial magnet production from its Texas facility anticipated by year-end and a heavy rare earths processing facility planned for commissioning in mid-2026.

The Story So Far

The U.S. government is actively working to establish a secure domestic rare earths supply chain, driven by escalating geopolitical tensions described as a “new Cold War” with Beijing. This strategic pivot aims to reduce America’s reliance on China, which has historically dominated the rare earths market, and is exemplified by the Pentagon’s agreement with MP Materials to cease sales to Chinese customers and guarantee prices for critical materials.

Why This Matters

MP Materials’ widened loss underscores the significant financial commitment involved in the U.S.’s strategic pivot away from Chinese rare earth sales, reflecting a broader geopolitical effort to establish a secure domestic supply chain for critical materials. This move, driven by a “new Cold War” outlook, aims to bolster America’s national security and economic power by reducing reliance on foreign adversaries for essential components in high-tech, automotive, and defense applications.

Who Thinks What?

MP Materials, through CEO Jim Litinsky, views the global landscape as a “new Cold War” where economic might tied to critical materials is paramount, necessitating government investment and their strategic pivot to establish a domestic U.S. rare earths and magnet supply chain despite short-term financial losses.

The U.S. government, represented by the Pentagon, supports the establishment of a domestic rare earths supply chain to secure national power, providing investment agreements, prohibiting sales to China, and guaranteeing floor prices for crucial rare earths.

MP Materials, the sole U.S. rare earths mining company, reported a widened third-quarter loss of $41.8 million, or 24 cents per share, as it ceased sales to Chinese customers in adherence to a U.S. government agreement. Despite the loss, which compared to $11.2 million in the year-ago quarter, the company’s adjusted results surpassed Wall Street expectations, reflecting a strategic pivot towards establishing a domestic U.S. rare earths supply chain and magnet manufacturing capability.

Financial Performance and Strategic Shift

The Las Vegas-based company recorded no revenue from sales of rare earths concentrate during the quarter, a significant departure from previous years when such sales constituted the majority of its income. This change follows a July investment agreement with the Pentagon, which prohibits future shipments of rare earths concentrate to China.

As part of this agreement, the Pentagon began guaranteeing a floor price of $110 per kilogram for neodymium and praseodymium, two crucial rare earths, starting October 1. While concentrate sales ceased, MP Materials did report $21.9 million in sales from magnetic precursor products, which are foundational components for magnets.

CEO’s Geopolitical Outlook

Jim Litinsky, CEO of MP Materials, characterized the current global landscape as a “new Cold War” between Washington and Beijing. He emphasized the necessity of government investment in critical industries to secure national power.

“In Cold War 2.0, the equation has reversed,” Litinsky stated during an investor call. He argued that economic might, expressed through control of critical materials, advanced technologies, and their supply chains, has become the decisive measure of national power. Litinsky also expressed skepticism about the competitiveness of many peer projects in the rare earths sector.

Expanding Domestic Production

MP Materials is advancing its domestic production capabilities, anticipating the start of commercial magnet production from its Texas facility by the end of the year. The company is also developing a facility to process heavy rare earths.

This heavy rare earth processing facility is slated for commissioning in mid-2026. It will utilize ore from its California mine and third-party sources, with a goal of producing 200 metric tons annually of dysprosium and terbium, two essential heavy rare earths for magnet manufacturing.

Outlook

MP Materials is undergoing a significant transformation, moving away from reliance on foreign sales to become a key player in the U.S. domestic rare earths and magnet supply chain. This strategic shift, bolstered by government agreements and driven by geopolitical considerations, aims to strengthen America’s position in critical materials necessary for various high-tech, automotive, and defense applications.