U.S. Strategic Minerals Push Fuels Rally for Rare Earths Producer MP Materials

MP Materials US5533681012

A new U.S. government initiative framing rare earth elements as a national security priority has placed MP Materials, a leading domestic producer, squarely in the spotlight. The market's immediate response was positive, with the company's shares climbing as much as 6% intraday. This raises a key question: how much of this momentum is driven by policy support, and what must the company deliver operationally to justify it?

The catalyst for the share price movement was the official launch of "Project Vault" by President Donald Trump. Modeled after the strategic petroleum reserve created in the 1970s, according to reports from Firstpost and Nikkei Asia, the program aims to secure the U.S. supply of critical raw materials. The project establishes a strategic reserve for 50 critical minerals and 17 rare earth elements.

With a total funding pool of $12 billion—comprising a $10 billion credit facility and approximately $2 billion in private capital—the program's objective is clear: to reduce reliance on China. China currently dominates the global sector, accounting for roughly 70% of global extraction and a staggering 90% of processing capacity.

For MP Materials, which operates the Mountain Pass mine and is considered the largest rare earths producer in the Western Hemisphere, this policy represents substantive backing, not merely symbolism.

Sector-Wide Momentum and Policy Reinforcement

The positive sentiment extended beyond a single stock. Shares of other industry players, including USA Rare Earth and Critical Metals, also traded higher.

Concurrently, the first "Critical Minerals Ministerial" meeting is being held in Washington D.C., featuring Secretary of State Marco Rubio and Vice President J.D. Vance. The agenda centers on the "Pax Silica" strategy, which reportedly includes proposals for direct government equity investments and price guarantees. These measures are designed to shield domestic producers from market distortions caused by China's export policies.

The Operational Test: Forthcoming Earnings and Analyst Outlook

Following this political tailwind, the company's next challenge will be operational performance. MP Materials is scheduled to release its fourth-quarter 2025 financial results after the U.S. market closes on February 26.

Recently, several financial institutions have updated their assessments of the company:
- Goldman Sachs: Maintains a "Buy" rating with a $77 price target (as of November).
- Morgan Stanley: Upgraded to "Overweight" with a $71 target (December).
- BMO Capital: Rates the stock "Outperform" with a $75 target.

MP Materials shares closed the previous session at $59.11. The new policy framework provides additional rationale for the company's growth narrative as it continues to expand its refining capabilities. This expansion includes a planned facility in Saudi Arabia, developed in cooperation with the U.S. Department of Defense.