The ongoing trade conflict between the United States and China is intensifying, prompting investors to show increased interest in MP Materials, a company notable for its rare earth mineral production. MP Materials, which operates the exclusive rare earth mine and processing plant in the United States, has seen its shares surge by 22.7% as of 11:25 a.m. ET. Meanwhile, the S&P 500 Index has increased by 1.1%.
Reports have surfaced indicating that President Donald Trump intends to issue an executive order allowing the United States to begin stockpiling rare earth minerals. This development positions MP Materials prominently for investors, as it controls Mountain Pass, the only rare earth mining facility within U.S. borders.
Recently, China halted its exports of rare earth minerals, a critical setback for industries such as semiconductors, electric vehicles, and defense, which depend heavily on these minerals. China accounts for approximately 70% of the rare earth minerals imported by the U.S. and remains the global leader in their production.
Although MP Materials presents a potential investment opportunity due to the expected announcement of the executive order, the situation is complex. Notably, MP Materials sells its rare earth minerals concentrate to Chinese customers. The company’s 10-K filing highlights the risks associated with changes in China’s political landscape and export policies, which might negatively affect its financial health and operational outcomes.
The circumstances surrounding rare earth minerals are evolving rapidly, and more updates are anticipated. At present, MP Materials might appeal primarily to investors willing to navigate high levels of risk and volatility.
