Against the backdrop of the China-U.S. game, "America's only rare earth player" MP Materials' Q2 performance exceeded expectations, with praseodymium and neodymium production surging by 120%

According to Zhitong Finance APP, MP Materials (MP.US), the American rare earth giant that owns the Mountain Pass rare earth mine, announced its latest earnings report on Thursday, showing that the company's second-quarter losses were less than Wall Street analysts generally expected. Benefiting from the increasing domestic demand for rare earths in the context of the great power competition between China and the United States, MP Materials significantly increased its rare earth production, driving its stock price to surge over 10% in after-hours trading. Since 2025, MP Materials' stock price has repeatedly reached historical highs, with an astonishing increase of 355% year-to-date.

Since the beginning of this year, the competition between China and the United States over chips and rare earths has intensified. The U.S. government under Donald Trump has pushed for unprecedented support to expand the production of rare earth concentrates and rare earth magnets, striving to achieve a "completely independent domestic rare earth supply system." It is understood that the Trump administration has partnered with American tech giants like Apple to support large-scale orders for MP Materials, leading to an unprecedented bull market for the company, which had seen its stock price at historical lows for most of the time since its listing in 2020, with a 355% surge in stock price this year alone.

MP Materials is known as the "lone rare earth player in the U.S." primarily because of its significant role in "mining production + preliminary separation of rare earths." The Mountain Pass mine operated by MP Materials is the only active rare earth mining project in the United States.

The only rare earth mine currently in commercial production in the U.S. is the Mountain Pass rare earth mine in California, operated by MP Materials. The U.S. Geological Survey (USGS) stated clearly in the 2025 Mineral Commodity Summaries: the only rare earth mine in the U.S. is "a mine located in California's Mountain Pass"; the domestic rare earth production in the U.S. is expected to be about 45,000 tons of REO equivalent in 2024, sourced from this mine.

MP Materials is responsible for operating the only rare earth mine in the U.S. located in California's Mountain Pass. With the unprecedented support from the U.S. government led by Donald Trump, which aims to establish a domestic rare earth supply system to reduce dependence on Chinese rare earths, the company has garnered significant attention this year. This strong push from the U.S. government has also led to a cumulative increase of over 355% in the company's stock price this year.

In its earnings statement, MP Materials reported that the rare earth concentrate production from its mine in the second quarter increased nearly 45% to 13,145 tons, marking the second-highest quarterly production in the company's history. The production of compounds made from the two most popular rare earth elements in the U.S. manufacturing sector—neodymium and praseodymium (NdPr)—surged nearly 120% to 597 tons.

The company's co-founder and Chief Operating Officer Michael Rosenthal stated in the earnings conference call following the report that the actual production of NdPr oxides in the current quarter is expected to grow by another 10% to 20% quarter-over-quarter The Las Vegas-based company reported a second-quarter adjusted loss per share of $0.13, which was lower than Wall Street analysts' average expectation of a loss of $0.19 per share. The company's Q2 revenue was approximately $57.4 million, exceeding analysts' average forecast of $46.7 million, and representing an 84% increase compared to the same period last year.

Since 2025, the Trump administration has strongly supported MP Materials

Last month, MP Materials signed a long-term cooperation agreement with the U.S. government worth up to $10 billion, which exceeds the company's market value, to significantly boost the production of rare earth magnets needed for the U.S. military industry.

The agreement sets a floor price of $110 per kilogram for NdPr, nearly double the current market price level in China. This U.S. critical minerals company has long sought this price floor.

Moreover, and more importantly, this agreement will make the Pentagon the largest shareholder of the company, which subsequently reached a significant $500 million agreement with U.S. consumer electronics giant Apple Inc. (AAPL.US) to exclusively supply rare earth magnets for this consumer electronics leader in the U.S. for products like iPhones and iPads.

The company's CEO, James Litinsky, stated during the earnings call that the advance payment from the Apple agreement will fund most of the capital expenditures needed for the large-scale expansion of the "Independence" U.S. rare earth mine in Texas.

As Apple announced an unprecedented investment plan in the U.S.—adding $100 billion in investments domestically, ultimately bringing the company's total investment in the U.S. to $600 billion over the next four years. An infographic on Apple's website regarding the "Apple U.S. Manufacturing Plan" shows that all iPhone and Apple Watch glass covers will be manufactured in the U.S., and rare earth magnets made in the U.S. will come from MP Materials, along with the establishment of a complete end-to-end supply chain for chips and core components of consumer electronics in the U.S.

Why are rare earths so important for the U.S.?

Rare earths refer to a group of 17 metals that are widely used in the chip industry, as well as in core manufacturing sectors such as consumer electronics, electric vehicles, aircraft engines, and defense manufacturing.

Statistics show that China accounts for about 60%–70% of global rare earth mining; more critically, in the separation, refining, and metal/magnet stages, China's share rises further to 85%–90%+. In terms of praseodymium-neodymium oxide (NdPr), which is mainly used to manufacture high-strength permanent magnets, China holds a significant position in the global rare earth market, and in recent years, its share in this field has approached monopoly levels worldwide. This is why, during the U.S.-China trade standoff in the first half of the year, after China initiated rare earth controls, the Trump administration's previously hardline stance on imposing tariffs on China showed a noticeable softening, as the U.S. imports nearly all of its rare earths from the Chinese market.

However, in the U.S. rare earth industry chain, the former Mountain Pass rare earth mine was shut down for several years due to environmental issues, leading to the near collapse of the domestic rare earth industry chain since then. The Mountain Pass rare earth mine in the U.S. faced environmental and cost issues, leading to its shutdown in 2002 and the bankruptcy of the company during its 2015 revival, perfectly missing the critical window for industry expansion China has integrated the entire chain of "mining-separation-refining-magnet" through large-scale investment and cost advantages during the same period. Against the backdrop of the ongoing China-U.S. rivalry this year, both sides have intensified export licenses/restrictions and tariffs, making the cross-border flow of heavy rare earths and magnets more sensitive, amplifying the "passive dependence" of the Western industrial chain.

The U.S. Department of Defense has directly acknowledged this year that it needs to rebuild the domestic supply chain in the U.S. through a "mine-to-magnet" full industrial chain approach, and has already invested hundreds of millions of dollars in support.

The supply of rare earths is crucial for the Trump administration's long-cherished goal of an all-American "chip industry chain" and the localization of the "defense and military" supply chain. For example, cerium oxide (CeO₂) slurry is one of the main abrasives for wafer CMP (chemical mechanical polishing), widely used in processes such as STI/ILD for flattening, and is an indispensable "process consumable" in advanced manufacturing; yttrium-based ceramics such as yttrium oxide (Y₂O₃) are used as anti-plasma coatings/component materials in plasma etching chambers, significantly reducing particles and enhancing lifespan, directly affecting equipment yield and stability; lanthanum/lanthanum-doped high-k materials also play a role in gate dielectric research and certain applications.

In terms of defense, military, and high-end equipment, rare earth permanent magnets (NdFeB) are used in motors, actuators, radar, precision guidance, sonar, and avionics systems, serving as key components for platforms such as the F-35, submarines, and drones; heavy rare earths like Dy/Tb are also used in high-temperature demagnetization-resistant magnet formulations. Multiple assessments from the U.S. government explicitly state that rare earth permanent magnets are "critical materials" for the U.S. defense system and are highly sensitive to the security of the defense and military supply chain. The NdPr (praseodymium-neodymium compounds/oxides) that can be refined in large quantities from the Mountain Pass rare earth mine is the core raw material for manufacturing rare earth permanent magnets (NdFeB)