MP Materials Stock Stabilizes as Contractual Price Floor Confirmed

MP Materials US5533681012

Shares of MP Materials experienced volatility in pre-market trading on Thursday following a Reuters report suggesting potential changes to U.S. government price guarantees for critical minerals. The company swiftly countered the narrative, pointing to its firm contractual agreement with the Department of Defense.

The sector-wide unease underscores the significant geopolitical stakes involved. U.S. policy is focused on reducing reliance on China, which dominates global processing capacity for rare earth elements. MP Materials operates the Mountain Pass mine in California—North America's only significant active rare earths mine—and recently commissioned its "Independence" processing facility in Texas.

This context amplified the market's reaction to the report. During pre-market activity, MP Materials equity fell by more than 8% at one point. The sell-off was even more pronounced for sector peer Critical Metals (CRML), whose stock declined by approximately 10%.

Firm Contractual Assurance Provided

The triggering report indicated the previous administration might reconsider guaranteed minimum prices for critical minerals projects. Such mechanisms are viewed as vital tools to shield domestic producers from international price pressures.

MP Materials management labeled the report "inaccurate," emphasizing the existence of a binding contract with the Pentagon. This agreement secures the company a minimum price of $110 per kilogram for two of its standard rare earth products. This price floor is a cornerstone of the firm's valuation, ensuring stable revenue streams irrespective of global market fluctuations.

Diverging Paths Within the Industry

The situation highlights differing stages of development among U.S. rare earths companies. MP Materials, which reported quarterly revenue of $53.55 million (Q3 2025) and holds active government contracts, stands in contrast to Critical Metals, which has not yet reported any revenue. CRML CEO Tony Sage stated on social media that his company has "never needed a price floor and never will."

Despite the day's turbulence, MP Materials shares have more than tripled in value over the past year. This rally has been fueled by major contracts, including a deal with Apple valued at around $500 million, alongside direct investment from the Department of Defense. Market analysts collectively rate the stock a "Strong Buy," with an average price target of $76.13.

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