Rare earth minerals is a case of a funny misnomer. They aren't particularly rare as a rule; they're quite common in the earth's crust. The problem is that they're often found mixed together in relatively small concentrations in ore with lots of other minerals.
That means they require lots of refining, a process that traditionally creates a lot of environmental issues. And those issues can also lead to health issues for those working and living in and around the mined areas, according to the National Institutes of Health. The problem is that the materials being mined are absolutely critical to the modern economy and enable everything from computers and smartphones to advanced weapons systems to function.
Because they are so toxic to access, China is one of the few countries willing to do what it takes to access almost all of them.
The U.S. has rare earths reserves, but the issue until recently has been getting at them and refining them at a cost-effective scale, and without poisoning the planet. Fortunately, there is now a company doing just that: MP Materials (MP +3.42%).
Image source: Getty Images.
Modern minerals, modern problems, modern solutions
Based in Las Vegas, MP Materials owns and operates the Mountain Pass Rare Earth Mine. The mine produces several critical rare earth minerals like neodymium-praseodymium (NdPr), which is vital for electric vehicles, robotics, and electronics.
And it can provide those minerals at scale while meeting American environmental regulations and minimizing pollution. However, MP struggled to compete with cheap Chinese rare-earth imports.
That changed last summer thanks to two critical deals that have made MP a safer long-term investment, despite the fact that it's not profitable yet.
First, the smaller deal. On July 15, 2025, MP announced a long-term agreement with Apple to provide the company with American-made rare earth magnets produced from recycled materials. The $500 million partnership is good for MP, but it's a pretty conventional business agreement, all things considered.
And the market almost missed that news because of something that happened five days earlier.
The far more interesting announcement for MP last year came on July 10, when the U.S. military agreed to a 10-year commitment to buy MP Materials' rare earths at a price floor, and to invest in MP's production capacity by helping it build a magnet manufacturing plant in Texas.
Rare earths are such a strategically significant resource that the U.S. government will buy NdPr products at $110 per kilogram for the next 10 years. And once the factory in Texas is complete, the government will ensure that 100% of the magnets produced there will be purchased by defense or commercial customers.
To seal the deal, the government purchased $400 million worth of MP Materials stock, and it is now positioned to be the largest shareholder in the world's second-largest rare-earth mineral mine.
NYSE: MP
Key Data Points
With that deal, MP has something no other mining company does: a guaranteed market price for its goods. It also doesn't hurt that it has the weight of the world's largest military behind it.
The company's revenue declined in its most recent quarter, but has grown at a compound annual growth rate (CAGR) of 15% over the past five years.
And while profitability is likely a ways off, the U.S. military is now actively invested in ensuring that MP Materials does well, and the company's business is an issue of national security.
That makes for a safe long-term bet, in my view. The stock is already up 27% year to date, and I think it has plenty of runway left.
