Rare Earths Showdown: How China’s Export Curbs Fuel MP Materials’ Ascent

A significant escalation in the global trade conflict emerged over the weekend as China moved to impose sweeping new export controls on rare earth elements and related technologies. This strategic decision by Beijing sends shockwaves through worldwide supply chains for these critical minerals. At the center of this geopolitical shift stands MP Materials, the Western Hemisphere’s largest rare earths producer.

The updated regulations from China’s Ministry of Commerce substantially expand the government’s oversight of this vital market. Export restrictions now cover five additional rare earth elements, bringing the total to twelve out of seventeen elements requiring special licenses for shipment abroad. Dozens of specialized mining and processing equipment types also fall under these new controls.

Perhaps the most consequential development is China’s extension of oversight to downstream products and foreign manufacturers utilizing Chinese raw materials or technological processes. Given that China is responsible for processing over 90% of the world’s rare earth supply, this policy change impacts the entire technology and defense manufacturing sectors.

Strategic Pentagon Alliance Strengthens US Position

China’s effective “weaponization” of its market dominance represents precisely the scenario that US strategists have anticipated—with MP Materials serving as the cornerstone of their response. The company operates California’s Mountain Pass mine, North America’s sole large-scale, integrated rare earth mining and processing facility.

A landmark July agreement with the US Department of Defense cemented MP Materials’ strategic importance:

• A $400 million investment made the Pentagon the company’s largest shareholder
• Ten-year procurement agreement established for magnets from new production facilities
• Price floor protections implemented to guard against market volatility
• CEO James Litinsky characterized the partnership as “decisive action by the Trump administration for American supply chain independence”

Should investors sell immediately? Or is it worth buying MP Materials?

Trump Administration Counters With Tariff Threat

Former President Donald Trump responded immediately to China’s announcement, describing the measures as “deeply hostile.” His proposed countermeasure involves implementing 100% retaliatory tariffs on all Chinese exports to the United States, effective November 1. Chinese officials defended their export controls as necessary for “global peace,” while accusing the US of improperly expanding the concept of “national security.”

Financial markets reacted with uncertainty to the escalating trade confrontation. MP Materials equity, however, capitalized on the geopolitical tensions, surging more than 8% during Friday’s trading session.

Favorable Geopolitics Accelerate Demand Trajectory

For MP Materials, China’s export restrictions transform strategic positioning into tangible commercial advantage. The company now emerges as the most prominent non-Chinese supplier for the United States and allied nations desperately seeking to diversify their supply chains.

This geopolitical momentum is expected to accelerate demand for MP Materials’ products while reinforcing long-term growth prospects. The company’s current focus includes expanding its “10X Facility”—a second US-based magnet manufacturing plant—and enhancing processing capabilities for heavy rare earth elements.

Despite reporting a net loss in its most recent quarterly results, MP Materials achieved record production levels for key elements like neodymium-praseodymium. With global supply chains undergoing fundamental restructuring, the company stands at a historic inflection point, positioned to benefit from urgent demand for securely sourced rare earth materials.