Shares of MP Materials Corp. (NYSE: MP) climbed sharply on Wednesday afternoon, rising 9% to $62.21, as a fresh wave of Western policy support for critical minerals energized the rare earth sector. The broader market, as measured by the SPDR S&P 500 ETF (SPY), edged slightly lower during the session.
The rally followed a joint announcement from Group of Seven (G7) leaders, who pledged to reduce their dependence on any single external supplier of rare earths and permanent magnets to under 60% by 2030. This policy push underscores the strategic importance of rare earth elements—key inputs for electric vehicle motors, defense systems, and consumer electronics—and signals a long-term commitment to diversifying supply chains away from dominant non-bloc producers.
Adding to the momentum, the Pentagon’s Office of Strategic Capital confirmed its support for a $500 million long-term debt facility for Phoenix Tailings, a U.S.-based company planning to build a midstream rare earth processing plant. The facility will focus on converting mined ore or scrap into rare earth metals, a critical step in the supply chain that currently faces significant bottlenecks.
“This is an important signal of intent,” said Neha Mukherjee, research manager at Benchmark Mineral Intelligence, in a comment to Reuters. However, she cautioned that meaningful supply chain diversification will require sustained investment in mid- and downstream segments.
MP Materials, headquartered in Las Vegas, operates the Mountain Pass mine and processing site in California—the only large-scale rare earth mining and processing facility in North America. The company also runs a magnet manufacturing plant in Fort Worth, Texas. In May, MP reported first-quarter revenue of $90.6 million, up 49% year-over-year, and achieved record production of neodymium-praseodymium (NdPr), a key magnet ingredient. CEO James Litinsky highlighted “record NdPr production and sales” and ongoing expansion efforts.
Other rare earth stocks also benefited from the positive sentiment. USA Rare Earth closed up 12.0%, and Energy Fuels added 2.9%. The VanEck Rare Earth/Strategic Metals ETF gained 1.5%, reflecting broad sector interest, while the S&P 500 slipped 0.3%.
Despite the upbeat news, risks remain. MP Materials has flagged potential operational challenges, including production outages, water restrictions, equipment breakdowns, and spare parts shortages. Additionally, the Pentagon’s loan to Phoenix Tailings is not yet finalized and remains subject to due diligence on financial, legal, and technical aspects.
Looking ahead, investors will be watching for tangible outcomes from these policy moves—such as new plant openings, long-term supply contracts, and sustained production volumes. For now, the latest government backing reinforces the view that rare earth supply chains remain a top priority for Washington and the G7, extending beyond near-term earnings.
