MP Materials Shares Tumble Amid Policy Shift Concerns

MP Materials US5533681012

Shares of MP Materials faced significant selling pressure on Thursday following reports of a potential reversal in U.S. critical minerals policy. The catalyst was a Reuters report suggesting the Trump administration might eliminate price guarantees for new mining projects. The stock fell as much as 9% during the session, trading around $62. The company was quick to respond, emphasizing that its existing agreements would remain intact.

The uncertainty rippled across the entire critical minerals sector. Competitors including USA Rare Earth and Critical Metals registered even steeper declines, with losses reaching double-digit percentages.

In its response, MP Materials labeled interpretations of the news as "inaccurate and misleading." The company's confidence stems from a pivotal supply agreement it signed with the U.S. Department of Defense in July 2025.

This binding ten-year contract guarantees MP Materials a minimum price of $110 per kilogram for Neodymium-Praseodymium (NdPr) oxide, a crucial component for manufacturing permanent magnets. The comprehensive agreement also includes a $400 million investment framework and is designed to be unaffected by future policy decisions regarding other, unrelated projects.

Sector Remains Dependent on Government Support

The market's reaction underscores the sector's continued reliance on government backing. Western nations have spent years attempting to lessen their dependence on Chinese processing capabilities, as China still controls the majority of the global rare earths supply chain.

MP Materials operates the Mountain Pass facility in California, which stands as the sole active rare earths mine and processing plant in the United States. The company reported third-quarter 2025 revenue of $53.55 million, with a per-share loss of $0.10. While achieving profitability remains a challenge, the strategic importance of domestic production is increasingly clear.

The upcoming test for the equity will be whether investors can distinguish between the security of locked-in contracts and the uncertainty of broader industry policy, or if prevailing sector skepticism continues to weigh on its valuation.

@ boerse-global.de | US5533681012 MATERIALS