MP Materials Corp (NYSE:MP) experienced a sharp decline of 13.4% in June, triggered by China's decision to place the company on its dual-use export-control list. The stock last traded at $53.31, down 1.8%, with a market capitalization of approximately $9.49 billion. This move has pivoted investor attention away from the earlier concern over rare-earth concentrate sales to China and toward the potential impact on the company's equipment, parts, and magnet production ramp.
In the first quarter, MP Materials reported no revenue from rare-earth concentrate, compared with $30.1 million a year earlier, as it ceased selling concentrate in July 2025. However, revenue from neodymium-praseodymium (NdPr) oxide and metal surged 192% to $71.1 million, reflecting a strategic shift toward higher-value downstream products. Total revenue rose 49% to $90.6 million, while magnetics revenue jumped 306% to $21.1 million, driven by early output from its Texas facility. Adjusted EBITDA swung to a positive $36.6 million from a loss of $2.7 million a year ago, helped by new sales and pricing gains.
CEO James Litinsky highlighted record NdPr production of 917 metric tons (up 63%) and sales of 1,006 metric tons (up 117%) for the quarter. The company also recorded $42.3 million in price-protection agreement income. Despite these operational gains, the market's focus has shifted to the risks posed by China's export controls, which could affect the import of Chinese-made parts and processing technology needed for MP's U.S. magnet expansion.
The export-control list, which also includes USA Rare Earth Inc (NASDAQ:USAR), is largely symbolic according to George Chen of the Asia Group, as most targeted firms are U.S. defense-related with limited China business. However, the ban could still disrupt supply chains for equipment and processing tech, potentially delaying the ramp-up of MP's 10X magnet plant in Texas. The plant, which will supply General Motors Co (NYSE:GM) EV motors, is central to MP's strategy of building a domestic rare-earth supply chain from mine to magnet.
MP Materials benefits from significant government backing, including a $400 million Department of Defense investment in convertible preferred stock, a $150 million loan for heavy rare-earth separation, and $1 billion in financing from JPMorgan Chase & Co (NYSE:JPM) and Goldman Sachs Group Inc (NYSE:GS). The DoD deal also includes a $110 per kg NdPr price floor for a decade and a 10-year offtake agreement for all magnets produced at the 10X facility, which targets 10,000 tons of annual capacity by 2028. Ryan Castilloux of Adamas Intelligence called the Pentagon deal a game changer for the ex-China rare-earth industry.
Financially, MP ended March with $886.3 million in cash and $852.1 million in short-term investments, down from a total of $1.83 billion at end-2025. The net loss narrowed to $8.0 million from $22.6 million, but the company continues to burn cash to fund its buildout. Progress hinges on timely equipment arrivals, price stability, and continued government support. The broader rare-earth sector saw pressure, with USA Rare Earth dropping 23% in June amid a resale filing, China blacklist concerns, and a legal dispute with MP.
Meanwhile, international rare-earth politics are also in focus. Reuters reported that Malaysia's parliament plans a July 16 hearing on Lynas Rare Earths Ltd's $96 million supply deal with the U.S. Department of Defense, checking if it violates local policy. This underscores the geopolitical complexities surrounding rare-earth supply chains beyond China's export controls.
In summary, MP Materials' June decline reflects a reassessment of risks tied to its magnet strategy rather than a direct hit to its China business. With strong government backing and a clear downstream pivot, the company remains a key player in the U.S. rare-earth sector, but execution on the magnet ramp and supply chain resilience will be critical for investor confidence.
