MP Materials Drops a Bombshell: 90% of U.S. Rare Earth Projects Are Economic Pipe Dreams

Rare earth wake-up call: MP Materials just threw cold water on America's mining ambitions.

The harsh reality check

While politicians cheer 'strategic independence,' industry insiders know better. Most domestic rare earth projects can't survive without government life support—and even then, the math looks shaky.

The China factor

Decades of predatory pricing left Western producers gasping. Now, with supply chains fracturing, everyone's scrambling to rebuild what Beijing dismantled. Too bad elementary economics didn't get the memo.

Wall Street's latest mirage

Investors chasing 'critical minerals' hype might want to check their due diligence. When even the sector's strongest player warns about viability, maybe those ESG funds should've stayed in crypto.

MP warns speculation is distorting expectations

Litinsky called MP “America’s national champion” because it is the only rare earth miner currently producing in the United States.

The company has deals with Apple, General Motors, and the Pentagon, and Litinsky said MP has a structural advantage because it is vertically integrated. In his words, “We’re years and billions ahead of others.” He pointed to Australia’s Lynas, saying it took nearly a decade for that company to stabilize production.

He said MP expects to reach stable production levels about three years from the start of commissioning, which is a reminder that none of this is fast.

A TRUMP administration official told CNBC that the White House is not against doing more deals like the one with MP, but said not every agreement will look the same. Litinsky also said the rare earth market is close to a structural oligopoly, meaning only a few companies can actually operate at scale.

He argued that spreading government investments across dozens of new projects will not magically create a full supply chain. He said the government should continue pushing private investors to step in through grants, loans, and other support because, as he explained it, “If X dollars of capital can stimulate two or three X in private capital, they should be doing that as much as possible.”

China adjusts export rules as U.S. tries to expand supply

Rare earth minerals are used in magnets that power U.S. defense systems, semiconductor tools, electric vehicles, clean energy tech, and consumer electronics. China controls most of that supply chain, forcing the U.S. to rely heavily on imports.

China has started working on a new licensing system that could allow exporters to apply for permits more smoothly. Industry sources said these permits may move faster, but they also said China has not removed the broad export controls introduced in April.

The WHITE House said China agreed to introduce general licenses and called that a de facto end to the controls. But industry insiders said that does not reflect what companies are seeing on the ground.

Some Chinese officials said the licensing process could take months. Others said that even when the new permits roll out, it will not mean the earlier restrictions have been lifted.

Litinsky said MP will act as a forerunner while the U.S. tries to build a broader supply chain that does not rely on China. He said:

“In the very short term the administration has made sure we have a successful national champion in MP. We’re going to pave the path for broader supply.”

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