You may not have heard the name MP Materials before July, but it’s quickly becoming too hot to ignore.
The company operates the only rare earth mine in the US, which is why its share price has quadrupled since the start of the year, nearly doubled this month alone, and shot up another 19.99% today after it announced a $500 million deal with Apple.
The tech giant will purchase rare earth magnets produced at MP Materials' facility in Fort Worth, Texas, created from magnets recycled at its plant in Mountain Pass, California. While the first magnets won’t be shipped until 2027, Apple is paying MP $200 million upfront—a small price to pay for easy access to the materials vital for producing iPhones.
While MP Materials isn’t exactly a household name, you might remember seeing something about it just a few days ago. No need to Google: It’s the same company that soared 50% in a single day last week after the Pentagon bought a $400 million stake in the miner.
So, what’s the big deal? Rare earths are the raw materials used to make powerful magnets that are vital to building military weapons and other tech. They have also become a flashpoint of the ongoing trade war between the US and China.
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China has a monopoly on the industry, mining roughly 70% of the world’s rare earths and refining 90%. After the nation imposed export restrictions on the material in response to President Trump’s steep tariffs, the US government decided to give the rare earth industry a domestic boost.
Keep in mind: The US’s domestic rare earths industry has struggled to take off partially due to the high environmental cost of rare earth mining, which makes it challenging for miners to follow environmental laws while keeping costs down. China’s rare earths industry, while lucrative, has caused heavy metals and radioactive pollution.
Does MP have more winning material?
MP Material’s market cap is now approaching $10 billion thanks to its latest surge. So, does it have further to run? Most analysts say yes.
The analyst consensus on the stock is “overweight”, according to the WSJ. Morgan Stanley research analyst Carlos de Alba highlighted several economic tailwinds for critical mineral producers last week, including tighter supply for magnets produced in China and higher demand from Western governments trying to build their strategic stockpiles. And today’s deal with Apple keeps its “commercial momentum” going, according to D.A. Davidson equity analyst Matt Summerville.—LB