Jim Cramer downplays MP Materials Corp.'s size, praises Pentagon investment

Jim Cramer discusses MP Materials Corp. (MP), a rare earth metals company, stating that it's not as big as everyone makes it out to be. He notes the Pentagon and Apple investments, but also mentions the company's past financial struggles. Cramer previously discussed MP's partnership with the Defense Department, which includes a $1 billion construction loan and a $400 million equity investment to develop its Mountain Pass site and build a rare earth magnet factory.

MP Materials Corp (NYSE: MP), a rare earth materials company, has garnered significant attention in recent years, particularly due to its strategic partnerships and government investments. However, Jim Cramer, a prominent financial analyst, has expressed caution, noting that the company's size and past financial struggles should not be overlooked.

Historical Context and Current Status
MP Materials, headquartered in Las Vegas, Nevada, was founded in 2017 and owns and operates the Mountain Pass mine, the only operational rare earth mine and processing facility in the United States [1]. The company's focus is on producing Neodymium-Praseodymium (NdPr) materials, a critical component in high-strength permanent magnets used in electric vehicles, robotics, and wind turbines.

Government and Corporate Investments
The company has secured substantial backing from the U.S. government and major corporations. In July 2025, the United States Department of Defense announced that it would become the largest shareholder of MP Materials, following a $400 million equity investment [2]. Apple also invested $500 million in the company, reflecting its strategic importance in reducing U.S. reliance on China for rare earth elements [3].

Challenges and Financial Struggles
Despite these investments, MP Materials has faced financial challenges. The company previously filed for bankruptcy in 2015, and its parent company, Molycorp, struggled to maintain profitability. The Mountain Pass mine was in a state of "care and maintenance" when MP Materials acquired it in 2017 [4]. Additionally, the company has experienced fluctuations in its production output and has faced issues with mineral rights and processing agreements.

Strategic Partnerships and Expansion
To mitigate these challenges, MP Materials has formed strategic partnerships and is expanding its operations. In 2023, the company signed a supply chain agreement with Sumitomo Corporation and is in the process of scaling its operations to produce refined rare earths and rare earth metals [5]. The company also signed a long-term agreement with General Motors to provide neodymium-iron-boron magnets for electric vehicle motors [6].

Future Outlook
The future of MP Materials looks promising, with significant government and corporate backing. However, the company must navigate the challenges of past financial struggles and ensure sustainable growth. The recent tariffs on rare earth magnets from China may also impact the company's operations and profitability [7].

References
[1] https://en.wikipedia.org/wiki/MP_Materials
[2] https://en.wikipedia.org/wiki/MP_Materials
[3] https://en.wikipedia.org/wiki/MP_Materials
[4] https://en.wikipedia.org/wiki/MP_Materials
[5] https://en.wikipedia.org/wiki/MP_Materials
[6] https://en.wikipedia.org/wiki/MP_Materials
[7] https://en.wikipedia.org/wiki/MP_Materials