We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Can MP and DoD Rebuild America's Rare Earth Magnet Supply Chain?
Read MoreHide Full Article
Key Takeaways
MP partners with the DoD to develop a domestic rare earth magnet supply chain and expand production.
The 10X Facility will raise MP's magnet output to 10,000 metric tons, serving defense and commercial needs.
The DoD set a $110/kg price floor and committed to buying all 10X output for 10 years.
MP Materials (MP - Free Report) has entered into a public-private partnership with the United States Department of Defense (DoD) to fast-track the development of a domestic rare earth magnet supply chain. Backed by a multibillion-dollar investment package and long-term commitments from DoD, MP Materials will substantially expand its production capacity and play a pivotal role in reducing the United States’ reliance on foreign sources, particularly China.
MP Materials is the United States’ only fully integrated rare earth producer with capabilities spanning the entire supply chain, from mining and processing to advanced metallization and magnet manufacturing.
It currently operates the Mountain Pass Rare Earth Mine (the world’s second-largest rare earth mine) and a processing facility at the site. The company is commissioning a magnetics facility in Texas, known as Independence, which anchors its downstream capabilities.
MP will construct the second domestic magnet manufacturing facility (dubbed the 10X Facility), slated to begin commissioning in 2028. It will take MP Materials’ total U.S. rare earth magnet manufacturing capacity to an estimated 10,000 metric tons and will cater to both the defense and commercial sectors. The company, meanwhile, plans to expand its heavy rare earth separation capabilities at the Mountain Pass facility.
Under the 10-year agreement, DoD has established a price floor commitment of $110 per kilogram for MP Materials’ products stockpiled or sold, providing protection from market volatility. Also, DoD has committed that 100% of the magnets produced at the 10X Facility will be purchased by defense and commercial customers for 10 years.
Rare earth magnets are critical components in a wide range of advanced technologies, including defense systems, electric vehicles, wind turbines and other commercial applications. Various players are now diversifying into rare earths to capitalize on this demand.
Energy Fuels (UUUU - Free Report) acquired Base Resources Limited in October, which gave it access to the promising Toliara Mineral Sand Project, boosting its potential as a key producer of titanium and zirconium minerals, alongside rare earth elements. Energy Fuels aims to transform White Mesa Mill in Utah into a critical minerals hub, producing uranium, vanadium, rare earth elements and potentially medical radioisotopes. Energy Fuels recently received the final major regulatory approval from the Government of Victoria, Australia, to advance the Donald Rare Earth and Mineral Sand Project, its joint venture with Astron Corporation. The approval is a critical milestone in unlocking one of the world’s best near-term sources of 'light', 'mid' and 'heavy' rare earth oxides needed for numerous commercial and defense applications.
Idaho Strategic Resources (IDR - Free Report) is a gold producer that also owns the largest rare earth elements land package in the United States. Idaho Strategic has three REE exploration properties in Idaho — Lemhi Pass, Diamond Creek and Mineral Hill. Idaho Strategic has conducted numerous exploration programs on its REE properties, which include drilling, trenching, sampling and mapping certain areas within its 19,090-acre landholdings. The company plans for its busiest exploration season to date in 2025, targeting REE and thorium at its properties.
MP’s Price Performance, Valuation & Estimates
MP Materials shares have gained 92.5% so far this year compared with the industry’s 12.4% growth.
Image Source: Zacks Investment Research
MP is trading at a forward 12-month price/sales multiple of 14.63X, a significant premium to the industry’s 1.24X. It has a Value Score of F.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for MP Materials’ 2025 earnings is pegged at a loss of 46 cents per share. However, the bottom-line estimate for 2026 is pegged at earnings of three cents per share. The estimates for 2025 and 2026 have moved down over the past 60 days, as shown below.
Image Source: Zacks Investment Research
The company currently carries a Zacks Rank #3 (Hold).
Image: Bigstock
Can MP and DoD Rebuild America's Rare Earth Magnet Supply Chain?
Key Takeaways
MP Materials (MP - Free Report) has entered into a public-private partnership with the United States Department of Defense (DoD) to fast-track the development of a domestic rare earth magnet supply chain. Backed by a multibillion-dollar investment package and long-term commitments from DoD, MP Materials will substantially expand its production capacity and play a pivotal role in reducing the United States’ reliance on foreign sources, particularly China.
MP Materials is the United States’ only fully integrated rare earth producer with capabilities spanning the entire supply chain, from mining and processing to advanced metallization and magnet manufacturing.
It currently operates the Mountain Pass Rare Earth Mine (the world’s second-largest rare earth mine) and a processing facility at the site. The company is commissioning a magnetics facility in Texas, known as Independence, which anchors its downstream capabilities.
MP will construct the second domestic magnet manufacturing facility (dubbed the 10X Facility), slated to begin commissioning in 2028. It will take MP Materials’ total U.S. rare earth magnet manufacturing capacity to an estimated 10,000 metric tons and will cater to both the defense and commercial sectors. The company, meanwhile, plans to expand its heavy rare earth separation capabilities at the Mountain Pass facility.
Under the 10-year agreement, DoD has established a price floor commitment of $110 per kilogram for MP Materials’ products stockpiled or sold, providing protection from market volatility. Also, DoD has committed that 100% of the magnets produced at the 10X Facility will be purchased by defense and commercial customers for 10 years.
Rare earth magnets are critical components in a wide range of advanced technologies, including defense systems, electric vehicles, wind turbines and other commercial applications. Various players are now diversifying into rare earths to capitalize on this demand.
Energy Fuels (UUUU - Free Report) acquired Base Resources Limited in October, which gave it access to the promising Toliara Mineral Sand Project, boosting its potential as a key producer of titanium and zirconium minerals, alongside rare earth elements. Energy Fuels aims to transform White Mesa Mill in Utah into a critical minerals hub, producing uranium, vanadium, rare earth elements and potentially medical radioisotopes. Energy Fuels recently received the final major regulatory approval from the Government of Victoria, Australia, to advance the Donald Rare Earth and Mineral Sand Project, its joint venture with Astron Corporation. The approval is a critical milestone in unlocking one of the world’s best near-term sources of 'light', 'mid' and 'heavy' rare earth oxides needed for numerous commercial and defense applications.
Idaho Strategic Resources (IDR - Free Report) is a gold producer that also owns the largest rare earth elements land package in the United States. Idaho Strategic has three REE exploration properties in Idaho — Lemhi Pass, Diamond Creek and Mineral Hill. Idaho Strategic has conducted numerous exploration programs on its REE properties, which include drilling, trenching, sampling and mapping certain areas within its 19,090-acre landholdings. The company plans for its busiest exploration season to date in 2025, targeting REE and thorium at its properties.
MP’s Price Performance, Valuation & Estimates
MP Materials shares have gained 92.5% so far this year compared with the industry’s 12.4% growth.
Image Source: Zacks Investment Research
MP is trading at a forward 12-month price/sales multiple of 14.63X, a significant premium to the industry’s 1.24X. It has a Value Score of F.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for MP Materials’ 2025 earnings is pegged at a loss of 46 cents per share. However, the bottom-line estimate for 2026 is pegged at earnings of three cents per share. The estimates for 2025 and 2026 have moved down over the past 60 days, as shown below.
Image Source: Zacks Investment Research
The company currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.