Washington's $1.6B Support Transforms USA Rare Earth into a Major Player
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 27 2026
0mins
Should l Buy MP?
Source: Marketbeat
Government Investment in Rare Earths: The U.S. government has shifted from passive observer to active participant in the rare earths sector, announcing a $1.6 billion financing package for USA Rare Earth Inc., which includes a direct equity stake in the company.
Market Reactions: Following the announcement, shares of USA Rare Earth rose over 20%, while shares of MP Materials, the leading producer of rare earths in North America, fell nearly 9%, indicating a sharp division in investor sentiment within the sector.
Strategic Importance: The investment aims to bolster domestic supply chains for critical minerals, particularly heavy rare earths, which are essential for high-temperature applications and national defense technologies, amidst concerns over China's dominance in the market.
Future Outlook: Investors are closely monitoring upcoming earnings reports from both USA Rare Earth and MP Materials, with expectations that the government-backed investment will enhance the competitive landscape and potentially lead to increased profitability for domestic producers.
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Analyst Views on MP
Wall Street analysts forecast MP stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for MP is 76.13 USD with a low forecast of 55.27 USD and a high forecast of 94.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
11 Analyst Rating
11 Buy
0 Hold
0 Sell
Strong Buy
Current: 62.800
Low
55.27
Averages
76.13
High
94.00
Current: 62.800
Low
55.27
Averages
76.13
High
94.00
About MP
MP Materials Corp. produces specialty materials that are vital inputs for electrification and other advanced technologies. The Company owns and operates the Mountain Pass Rare Earth Mine and Processing Facility (Mountain Pass) located in California. It is also developing a rare earth metal, alloy and magnet manufacturing facility in Fort Worth, Texas (Independence Facility). The Company’s segments include Materials and Magnetics. The Materials segment operates Mountain Pass, which produces refined rare earth products as well as rare earth concentrate and related products. The Materials segment primarily generates revenue from sales of rare earth concentrate, primarily sold for further distribution to a single, principal customer in China, and sales of neodymium-praseodymium (NdPr) oxide and metal, primarily sold to customers in Japan, South Korea, and broader Asia. The Magnetics segment operates the Independence Facility, where it produces magnetic precursor products.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
USA Rare Earth Secures Major Agreement with U.S. Government
- Agreement Context: USA Rare Earth has signed a significant agreement with the U.S. government to commercialize the Round Top deposit in Texas by 2028, although this will result in the dilution of 16.1 million shares, increasing political risk.
- Funding Support: The company has raised approximately $3.1 billion in capital through a $1.5 billion securities purchase agreement with Inflection Point and other investors, aimed at accelerating the mine-to-magnet value chain, despite existing shareholders facing dilution.
- Strategic Importance: The Round Top deposit is touted as the 'richest known deposit of heavy rare earth elements,' making its development crucial for the U.S. to secure a domestic supply of critical heavy rare earth materials and magnets, particularly for electric vehicle and renewable energy applications.
- Market Reaction: Although the company's stock price fell by 6.76% following the announcement, investors should monitor the company's progress toward commercial operations, as raising capital is viewed as a positive move given that the company is not yet generating revenue.
See More
USA Rare Earth Navigates Political Risks with New Agreements
- Major Agreement Signed: USA Rare Earth has signed an agreement with the U.S. government to issue 16.1 million shares, raising $3.1 billion to fund the commercialization of the Round Top deposit in Texas, expected to begin production in 2028, thereby enhancing the company's competitive position in the rare earth market.
- Increased Political Risk: While the new agreement provides financial support, issuing shares to the government may introduce future political interference and regulatory risks, particularly as administrations change, potentially impacting the company's operational stability.
- Strategic Importance of Rare Earth Resources: The Round Top deposit is described as the
See More
Analysis of Investment Opportunities in Critical Minerals
- USA Rare Earth Prospects: USA Rare Earth is set to debut on public markets in March 2025 following a merger with a SPAC, with its Round Top deposit containing 15 of the 17 rare-earth elements, positioning it as a leader in the U.S. rare-earth market and likely to attract investor interest and drive stock price appreciation.
- Government Investment Support: The company has signed a letter of intent with the U.S. government for a $1.6 billion investment, which mitigates uncertainties surrounding the Round Top project and enhances its strategic position within the rare-earth supply chain.
- Deep-Sea Mining Potential: TMC The Metals Company focuses on harvesting polymetallic nodules from the seafloor and plans to partner with Korea Zinc for metal refining, which is expected to drive growth in copper and nickel markets to meet future demand.
- MP Materials Market Advantage: As the only fully integrated rare-earth producer in the U.S., MP Materials has secured over $500 million in funding from the Department of Defense and plans to launch a heavy rare-earth separation facility in 2026, further solidifying its market position and reducing price volatility risks.
See More
Investment Opportunities in Rare Earth Mining
- Government Support: The U.S. government plans to invest $1.6 billion in USA Rare Earth, significantly reducing risks associated with the Round Top project and enhancing its competitiveness in the rare earth market, likely attracting more investor interest.
- Production Capacity Expansion: MP Materials aims to commission a new heavy rare-earth separation facility at Mountain Pass by mid-2026, diversifying its product offerings while securing over $500 million in funding through a partnership with the Department of Defense, strengthening its market position.
- Deep-Sea Mining Prospects: TMC The Metals Company has partnered with Korea Zinc to harvest polymetallic nodules from the seafloor, which is expected to boost production of copper and nickel, addressing a projected 50% increase in demand and enhancing its competitiveness in the metals market.
- Strong Market Demand: With rising political interest in securing critical mineral supplies, companies like USA Rare Earth and MP Materials are gaining investor attention, which is expected to yield substantial returns for long-term investors.
See More
Mining Stocks: Risks and Opportunities for Investors
- TMC Overview: TMC The Metals Company focuses on collecting polymetallic nodules from the Pacific Ocean, currently valued at $2.7 billion with a 13.45% stock increase to $6.41; despite being pre-revenue, its eco-friendly mining approach may attract long-term investors.
- Importance of MP Materials: MP Materials operates the only large-scale rare-earth mine in the U.S., valued at $11 billion with an 8.49% stock increase to $61.35; it secured a $400 million investment from the Department of Defense and a $500 million partnership with Apple, ensuring stability in the U.S. rare-earth supply chain.
- USA Rare Earth Development: USA Rare Earth controls the Round Top deposit in Texas, valued at $3.2 billion with a 6.02% stock increase to $21.84; although still in the construction phase, it has raised $3.1 billion to support the establishment of a domestic rare-earth supply chain.
- Investment Outlook: While TMC, MP, and USA Rare Earth are all pre-revenue and face market volatility risks, their potential in the rare-earth and battery metal sectors makes them attractive for long-term investors.
See More
Trump Administration Invests in Critical Minerals Sector
- Scale of Government Investment: The Trump administration's equity stakes in at least 10 companies, including USA Rare Earth and MP Materials, represent an unprecedented scale aimed at reducing reliance on Chinese rare earths, potentially altering market competition dynamics.
- Legal Risk Concerns: The lack of a clear legal basis for these investments exposes the Trump administration to lawsuits from competitors and political scrutiny during potential regime changes, increasing operational uncertainties for the involved companies.
- Capital Allocation Risks: Government equity stakes raise concerns about capital misallocation, as funds may flow to less competitive companies, which could adversely affect the overall health of the market and investor confidence.
- Corporate Silence: Despite some executives expressing distaste for government intervention, most corporate leaders remain silent, fearing that public opposition could strain relations with the administration and negatively impact shareholder interests.
See More
USA Rare Earth Secures Major Agreement with U.S. Government
- Agreement Context: USA Rare Earth has signed a significant agreement with the U.S. government to commercialize the Round Top deposit in Texas by 2028, although this will result in the dilution of 16.1 million shares, increasing political risk.
- Funding Support: The company has raised approximately $3.1 billion in capital through a $1.5 billion securities purchase agreement with Inflection Point and other investors, aimed at accelerating the mine-to-magnet value chain, despite existing shareholders facing dilution.
- Strategic Importance: The Round Top deposit is touted as the 'richest known deposit of heavy rare earth elements,' making its development crucial for the U.S. to secure a domestic supply of critical heavy rare earth materials and magnets, particularly for electric vehicle and renewable energy applications.
- Market Reaction: Although the company's stock price fell by 6.76% following the announcement, investors should monitor the company's progress toward commercial operations, as raising capital is viewed as a positive move given that the company is not yet generating revenue.
See More
USA Rare Earth Navigates Political Risks with New Agreements
- Major Agreement Signed: USA Rare Earth has signed an agreement with the U.S. government to issue 16.1 million shares, raising $3.1 billion to fund the commercialization of the Round Top deposit in Texas, expected to begin production in 2028, thereby enhancing the company's competitive position in the rare earth market.
- Increased Political Risk: While the new agreement provides financial support, issuing shares to the government may introduce future political interference and regulatory risks, particularly as administrations change, potentially impacting the company's operational stability.
- Strategic Importance of Rare Earth Resources: The Round Top deposit is described as the
See More
Analysis of Investment Opportunities in Critical Minerals
- USA Rare Earth Prospects: USA Rare Earth is set to debut on public markets in March 2025 following a merger with a SPAC, with its Round Top deposit containing 15 of the 17 rare-earth elements, positioning it as a leader in the U.S. rare-earth market and likely to attract investor interest and drive stock price appreciation.
- Government Investment Support: The company has signed a letter of intent with the U.S. government for a $1.6 billion investment, which mitigates uncertainties surrounding the Round Top project and enhances its strategic position within the rare-earth supply chain.
- Deep-Sea Mining Potential: TMC The Metals Company focuses on harvesting polymetallic nodules from the seafloor and plans to partner with Korea Zinc for metal refining, which is expected to drive growth in copper and nickel markets to meet future demand.
- MP Materials Market Advantage: As the only fully integrated rare-earth producer in the U.S., MP Materials has secured over $500 million in funding from the Department of Defense and plans to launch a heavy rare-earth separation facility in 2026, further solidifying its market position and reducing price volatility risks.
See More
Investment Opportunities in Rare Earth Mining
- Government Support: The U.S. government plans to invest $1.6 billion in USA Rare Earth, significantly reducing risks associated with the Round Top project and enhancing its competitiveness in the rare earth market, likely attracting more investor interest.
- Production Capacity Expansion: MP Materials aims to commission a new heavy rare-earth separation facility at Mountain Pass by mid-2026, diversifying its product offerings while securing over $500 million in funding through a partnership with the Department of Defense, strengthening its market position.
- Deep-Sea Mining Prospects: TMC The Metals Company has partnered with Korea Zinc to harvest polymetallic nodules from the seafloor, which is expected to boost production of copper and nickel, addressing a projected 50% increase in demand and enhancing its competitiveness in the metals market.
- Strong Market Demand: With rising political interest in securing critical mineral supplies, companies like USA Rare Earth and MP Materials are gaining investor attention, which is expected to yield substantial returns for long-term investors.
See More
Mining Stocks: Risks and Opportunities for Investors
- TMC Overview: TMC The Metals Company focuses on collecting polymetallic nodules from the Pacific Ocean, currently valued at $2.7 billion with a 13.45% stock increase to $6.41; despite being pre-revenue, its eco-friendly mining approach may attract long-term investors.
- Importance of MP Materials: MP Materials operates the only large-scale rare-earth mine in the U.S., valued at $11 billion with an 8.49% stock increase to $61.35; it secured a $400 million investment from the Department of Defense and a $500 million partnership with Apple, ensuring stability in the U.S. rare-earth supply chain.
- USA Rare Earth Development: USA Rare Earth controls the Round Top deposit in Texas, valued at $3.2 billion with a 6.02% stock increase to $21.84; although still in the construction phase, it has raised $3.1 billion to support the establishment of a domestic rare-earth supply chain.
- Investment Outlook: While TMC, MP, and USA Rare Earth are all pre-revenue and face market volatility risks, their potential in the rare-earth and battery metal sectors makes them attractive for long-term investors.
See More
Trump Administration Invests in Critical Minerals Sector
- Scale of Government Investment: The Trump administration's equity stakes in at least 10 companies, including USA Rare Earth and MP Materials, represent an unprecedented scale aimed at reducing reliance on Chinese rare earths, potentially altering market competition dynamics.
- Legal Risk Concerns: The lack of a clear legal basis for these investments exposes the Trump administration to lawsuits from competitors and political scrutiny during potential regime changes, increasing operational uncertainties for the involved companies.
- Capital Allocation Risks: Government equity stakes raise concerns about capital misallocation, as funds may flow to less competitive companies, which could adversely affect the overall health of the market and investor confidence.
- Corporate Silence: Despite some executives expressing distaste for government intervention, most corporate leaders remain silent, fearing that public opposition could strain relations with the administration and negatively impact shareholder interests.
See More
