Why MP Materials is a Strategic Buy for Investors Betting on U.S. Rare Earth Independence

The U.S. rare earth supply chain is undergoing a seismic shift, driven by geopolitical tensions, industrial demand, and a growing recognition of strategic vulnerabilities. At the center of this transformation is MP Materials (MP), the sole operator of a functioning rare earth mine in the United States. With a $400 million investment from the Pentagon, a $500 million partnership with Apple, and a high-stakes joint venture in Saudi Arabia, MP is not just a beneficiary of the rare earth renaissance-it is a catalyst. For investors seeking exposure to a sector defined by geopolitical tailwinds and industrial inevitability, MP Materials represents a rare combination of monopoly-like positioning, government backing, and long-term demand guarantees.

Pentagon's $400M Investment: A Strategic Lifeline

The U.S. Department of Defense's decision to purchase $400 million in preferred stock of MP Materials in July 2025 is more than a financial transaction-it is a geopolitical statement. By becoming the largest shareholder in the company, the Pentagon has effectively guaranteed MP's role in securing America's access to rare earth elements, which are critical for everything from military-grade magnets to electric vehicles and wind turbines.

The investment comes with a 10-year off-take agreement for 100% of the output from MP's new 10X Facility, a magnet manufacturing plant set to begin production in 2027 that includes a price floor of $110 per kilogram for neodymium-praseodymium (NdPr) oxide, a key component in high-performance magnets according to reports. Such pricing stability is a rare luxury in a sector historically plagued by volatility, and it ensures MP's cash flows remain resilient even in downturns.

According to a report by CNBC, the Pentagon's move is part of a broader strategy to reduce U.S. reliance on China, which currently dominates 90% of global rare earth processing as per data. With MP's Mountain Pass mine already producing 15% of the world's rare earths according to reports, this partnership cements the company's role as the backbone of a nascent domestic supply chain.

Apple Partnership: Recycling as a Growth Engine

MP's collaboration with Apple further underscores its strategic value. In 2025, the tech giant announced a $500 million investment to support MP in building a rare earth recycling facility, with production of 100% recycled magnets set to begin in 2027 according to sources. This partnership is not just a vote of confidence in MP's technical capabilities-it aligns with Apple's aggressive sustainability goals.

Data from Apple's Newsroom reveals that the company has already increased its use of recycled rare earths from 45% in 2021 to 73% in 2022 as reported, with a target of 100% by 2025 as stated. By locking in a long-term supplier like MP, Apple is future-proofing its supply chain while MP gains access to a stable, high-margin customer. The recycling angle also addresses a critical bottleneck in the rare earth industry: the lack of scalable secondary sources. As demand for rare earths grows-driven by the green energy transition and AI hardware-recycling will become increasingly vital, and MP is positioning itself at the forefront.

Saudi Refinery Deal: Diversification and Geopolitical Leverage

MP's joint venture with the Saudi Arabian Mining Company (Maaden) adds another layer of strategic depth. Under the agreement, MP and the U.S. Department of Defense will hold 49% of the new Saudi refinery, while Maaden controls 51% according to reports. The facility, to be built on a non-recourse basis as stated, will process rare earth feedstock from both domestic and international sources, producing light and heavy rare earth oxides for the U.S., Saudi Arabia, and allied nations as reported.

This partnership is emblematic of a broader U.S.-Saudi alignment to counter China's dominance in critical minerals. By leveraging Saudi Arabia's geopolitical clout and MP's technical expertise, the refinery will diversify supply chains and reduce bottlenecks. For MP, the deal also mitigates financial risk-since the U.S. government is covering construction costs according to sources, the company can focus on operational excellence without shouldering debt.

Why This Is a Buy, Not a Speculation

MP Materials' unique position is underpinned by three pillars: government guarantees, long-term demand anchors, and geopolitical diversification. The Pentagon's off-take agreement and price floor eliminate revenue uncertainty, while Apple's recycling partnership taps into a $1.2 trillion global green tech market as reported. The Saudi refinery, meanwhile, ensures MP isn't overexposed to any single region or customer.

Critics may argue that rare earths are a cyclical sector prone to oversupply. But MP's advantages are structural. The U.S. government's explicit prioritization of rare earth independence-evidenced by the $400 million investment and the Saudi deal-creates a floor for demand. Meanwhile, Apple's commitment to sustainability and recycling ensures a growing, high-margin niche.

For investors, the calculus is clear: MP is not just a play on rare earths-it's a bet on the U.S. government's determination to reshape global supply chains. With a near-monopoly on domestic rare earth mining, a diversified customer base, and a geopolitical tailwind strong enough to shift entire industries, MP Materials offers a rare combination of security and growth.