Strategic Alliances and Government Support Fuel MP Materials’ Ascent

MP Materials US5533681012

MP Materials shares have carried their impressive rally into the new year, building on significant momentum. The stock has advanced more than 33% since the start of the year, driven primarily by substantial political and strategic tailwinds in the United States that are reshaping the investment profile of this rare earths producer.

The current share price, hovering around $68.98, stands in stark contrast to its 52-week low of $18.64. This remarkable appreciation is underpinned by several extraordinary forms of U.S. government support:

• A $400 million equity investment from the Department of Defense.
• A 10-year price floor set at $110 per kilogram for neodymium-praseodymium (NdPr) products.
• A purchase guarantee covering 100% of the magnets from the company's planned Texas facility.

The capital infusion from the Pentagon is poised to make the U.S. defense establishment the company's largest shareholder, highlighting the national security imperative of establishing a domestic rare earths supply chain.

Operational Milestones and Record Output

On the operational front, MP Materials reported record figures for the third quarter of 2025:

• NdPr oxide production surged 51% year-over-year to 721 tonnes.
• Total rare earth oxide output hit a new high of 13,254 tonnes.
• The company maintains a long-term goal of expanding its annual rare earth oxide (REO) processing capacity to 60,000 tonnes.

The magnet manufacturing plant in Fort Worth is now operational, marking the company's strategic evolution from a pure-play mining operator to a vertically integrated "mine-to-magnet" producer.

A Network of Strategic Partnerships

The year 2025 saw MP Materials secure several major agreements that enhance its revenue and earnings visibility.

Apple as a Foundation Customer

In July 2025, Apple committed $500 million for U.S.-manufactured rare earth magnets made from recycled materials. An advance payment of $40 million has already been made, with an additional $200 million tied to the construction of a dedicated recycled magnet production facility.

Joint Venture in Saudi Arabia

A binding term sheet was signed with the Saudi Arabian Mining Company (Ma'aden) in November 2025 for a rare earth refining and separation plant in the Kingdom. The proposed ownership structure would see MP Materials and the U.S. Department of Defense jointly hold 49%, with Ma'aden controlling at least 51%.

Progress with General Motors

Concurrently, the company is progressing with the qualification of its permanent magnets for industrial-scale use with General Motors. Initial commercial magnet sales are anticipated in the second half of 2026.

Expanding the Product Portfolio

CEO James Litinsky confirmed that production of heavy rare earth elements, including dysprosium and terbium, is scheduled to commence by mid-2026. The new processing line is designed to handle approximately 3,000 tonnes of raw material annually, yielding over 200 tonnes of these strategically vital elements essential for electric motors and defense applications.

Legislative Momentum Builds

Further reinforcing the supportive political environment, U.S. lawmakers from both parties introduced legislation on January 15 to create a $2.5 billion stockpile of critical minerals. This initiative adds another layer of policy-driven support for domestic rare earth producers.

Share Price Volatility Amid a Solid Story

Despite the strong fundamental narrative, the stock exhibited notable volatility in January:

• January 14: $67.18 (+5.26%)
• January 13: $63.82 (-2.32%)
• January 12: $65.34 (+5.39%)
• January 9: $62.00 (+1.54%)

Market analysts maintain a constructive outlook. William Blair continues to rate the shares as "Outperform," emphasizing the value of the company's strategic alliances. While Deutsche Bank adjusted its price target downward, it reaffirmed a "Buy" rating, citing continued growth potential.

Financial Health and the Path to Profitability

Operationally, MP Materials continues to report losses, with an EBIT margin of -57.6%. However, the company's balance sheet remains robust, featuring roughly $1.9 billion in liquid assets and a low debt level.

Management expects a return to profitability on a per-share basis for the fourth quarter of 2025, with analysts forecasting earnings per share of $0.07. Revenue has grown at an average annual rate of 15% over the past five years. Current profitability is weighed down by substantial capital investments into downstream value-added segments, including magnet manufacturing and refining.

The future trajectory of the share price will largely depend on the successful transition of these new capacities, partnerships, and government programs into stable, growing, and profitable cash flows beginning in 2026.