I have several posts about rare earth elements (REE) - one of 21st century most ‘precious’ materials.
Last year, I have shared 4 posts on $MP Materials Corp.(MP)$; a REE stock that I picked upon shortly after its SPAC merger back in December 2020. (click on title to read)
30 Dec 2025 - $MP Reclaims $100 Level in 2026. Yes !
18 Jul 2025 - AAPL pushed $MP to $62 Intraday. OMG!
11 Jul 2025 - MP +50% Surge - Peak or just Starting ?
24 Jun 2025 - MP Materials ($MP) : Reclaiming its Peak !
Misnomer of Rarity.
Despite the name ‘rare earth elements’ (REEs) - they are relatively abundant within planet Earth, often surpassing the concentrations of more "common" industrial metals, like copper (60 ppm) or lead (14 ppm).
As of 2025, worldwide reserves of rare earth oxide equivalent (REO) are estimated at over 140 million metric tons, a significant jump from 2025 estimates due to new discoveries in Brazil and Vietnam.
Significant deposits are found not only in China which holds roughly 44 million tons, but also in Vietnam (22 million tons), Brazil (21 million tons), and Russia (10 million tons).
The United States holds a more modest 2.3 million metric tons, primarily centered at Mountain Pass.(see below)
The "rarity" is not a matter of geological scarcity but of "extractability."
REEs are geochemically "incompatible" - meaning they rarely cluster in highly concentrated, easy-to-mine veins.
Instead, they are typically dispersed as trace impurities, requiring the processing of vast amounts of raw ore to yield usable quantities.
This geological reality means that while the world is flush with the raw material, the economic & environmental costs of separating these chemically similar elements create a high barrier to entry that few nations have historically been willing to pay.
Consequently, global supply risk is a function of industrial organization rather than absolute physical scarcity.
China’s Strategic Ascendance
Just for the record, China’s dominance did not happen overnight but over long periods of toil and sweat that Western media has consistently choosen to ignore, while drumming up China’s autocratic dominance.
China’s current dominance was a multi-decade project initiated by strategic foresight and aggressive economic policy.
The pivot began in earnest in the 1980s when the Chinese government issued export tax rebates (up to 17%) to incentivize domestic mining.
By 1992, Deng Xiaoping famously quipped, "The Middle East has oil; China has rare earths," signaling a shift toward treating REEs as a geopolitical asset.
Between 1985 and 1995, China’s production surged by 500%.
Throughout 1990s - early 2000s, China’s low labour costs and relax environmental regulations flooded global market with cheap supply, driving Western competitors (including original Mountain Pass operator into bankruptcy).
By 2011, China controlled 97% of the world's supply.
The monopoly allowed for significant price control.
In 2010, China slashed export quotas by -37%.
Following the economic principles of supply and demand, average global import price skyrocketed from $9,461 per metric ton in 2009 to nearly $67,000 in 2011.
The Monopoly.
Today, China’s lead is fortified not just by ore, but by (a) intellectual property and (b) a refined "value chain" that converts raw oxides into the high-performance permanent magnets essential for modern defense and green energy.
The Middle Kingdom maintains a dominant position in Rare Earth Element (REE) market by controlling more than just the raw materials.
China produces 70% of the world’s mined ore.
But, its true power lies in its advanced processing and intellectual property.
By refining oxides into high-performance magnets for defense and green energy, China controls 90% of the global supply chain.
This near-monopoly allows the nation to (a) set global prices, (b) limit exports, and (c) use its supply as leverage in trade conflicts.
By focusing on these high-value finished products rather than just raw exports, Chinese companies earn significantly higher profits. Recently it was reported that in 2025, a surge for Northern China Rare Earth, netted profits of around USD 3.3 billion.
Furthermore, these firms can afford to lower their prices temporarily to outcompete and eliminate foreign rivals.
MP Materials & its pivot.
MP illustrates both past dependence on China and emerging efforts to rebuild a Western supply chain.
Historically, its Mountain Pass mine (in California) produced rare‑earth oxides that were then shipped to China for separation and magnet production, effectively making US a raw material supplier to Chinese refiners.
MP currently has capacity for about 40,000 metric tons of total rare‑earth oxides (roughly 11.5% of the global market).
It is targeting 60,000 tons, with downstream strategic shift - where it is constructing a 1,000‑ton‑per‑year “Independence” facility in Texas to produce metals, alloys and magnets.
As of early 2026, MP‘s Texas plant has not started full rare earth oxide processing as originally slated for 2025 operations. (see below)
MP’s phoenix-like resurrection was a result of a transformational public‑private partnership with the US Department of Defense in 2025.
The US Pentagon:
Provided an initial equity injection of about $400 million.
Provided a separate $150 million loan.
Agreed to a 10‑year price floor of roughly $110 /kg for NdPr products.
A 100% offtake commitment for 7,000 tons per year of expanded magnet output.
Guarantees at least $140 million of annual EBITDA with upside‑sharing above that level.
Combined with a $1 billion commercial loan package from $JPMorgan Chase(JPM)$ and $Goldman Sachs(GS)$, all above terms are position to remove MP from a China‑dependent exporter to an integrated US producer with cost targets of about $40 /kg at scale.
This positions MP as a potentially profitable domestic anchor in an otherwise China‑centric value chain.
Rare Earth Industry:
When it comes to rare earth elements (REE), there are 3 major operational activities:
Mining & beneficiation.
This involves digging the ore, then crushing, grinding, and concentrating it by physical methods.
Chemical processing & separation.
Processing methods of leaching, solvent extraction, ion exchange are used to produce individual rare earth oxides or metals of high purity.
This is the toxic and polluting activity that no countries (previously) wanted to invest in. Instead, it was farmed out to China.
Downstream manufacturing.
This forms the important and lucrative part of value chain, processing the extracted REE into different forms of permanent magnets, where rare earths are alloyed with iron, boron, cobalt, etc., and processed into final magnet shapes.
Where does MP Materials fits?
Exactly where is MP with regards to the 3 major activities, refer to summary table I have prepared :
MP still have a long way to go to become fully operation in its 3 major activities; not to mention an even further stretch for self-sufficiency, especially in High rare earth elements (HREE) production.
RE(alloys) Inc.
And that brings me to a new (to me) ‘REE’ related US listed stock - $REALLOYS INC(ALOY)$.
It is doing what the rest of the Western world failed to achieve for past 30 years, and in the process breaking China’s "kill switch" on the US defense supply chain.
ALOY has established itself as the only North American facility (currently) producing the specialized alloys essential for high-performance magnets used in advanced defense systems.
In an interview, ALOY, CEO, Lipi Sternheim remarked:
Our US competitors, no matter how well-funded, are at least 3 years away from production.
ALOY is already (here) in active production.
ALOY has addressed the rare earth bottleneck by re-establishing domestic conversion capacity, turning separated material into metals and alloys within North America, thru its partnership with the Saskatchewan Research Council (SRC) - the Canadian province's technology innovation unit.
By housing all activities within North America, ALOY is solving the part of the problem that cannot be fixed later, substituted, or rushed in a crisis.
With new US rules taking effect in 2027 restricting the use of Chinese rare earths in defense and federally backed manufacturing, existing domestic conversion capacity is becoming more relevant by the quarter.
US Defense Contract.
As a result of its unique value proposition, the Ohio-based company was awarded a contract from US Defense Logistics Agency (DLA) on 02 Mar 2026.
The contract (worth up to $1.7 million) is to scale next-generation metallothermal processes for Samarium (Sm) and Gadolinium (Gd) metals; rare earth oxide metals used to make magnets for weapons & electronics.
The contract, which has 2 phases over 24 months, is an initial vote of confidence in ALOY's technology from the DLA.
Output Capacity.
This new plant will have the capacity to process up to 300 metric tons per year of the heavy rare earths (HREEs) - Samarium & Gadolinium into metal form, making ALOY one of the largest US sources of HREEs.
This facility is “important” because it focuses on heavy rare earths (HREEs), whereas MP currently focuses on light rare earths (LREEs) like NdPr.
MP vs ALOY.
As of mid‑March 2026, both companies have continued to benefit from the Trump administration’s strategic push for domestic mineral independence, but their share prices are now telling very different stories.
ALOY
Since ALOY’s official listing on 25 Feb 2026, it has exhibited explosive growth. (see above)
It experienced a brief, sharp "V-shaped" recovery immediately following its listing date before entering a parabolic ascent.
The 2 Mar 2026, US Defense Logistics Agency (DLA) contract acted as a massive catalyst for ALOY.
Although the dollar amount is small compared to US Dept of Defense’s (DoD) $400 million stake in MP, the strategic implications were profound as market viewed it as a "seal of approval".
It validates ALOY’s ability to address the "downstream" bottleneck and its unique capability in HREEs, a segment that MP does not currently focus.
By 04 Mar 2026, it closed at a peak price of $25.88 (or +1223.73% gains) following the DLA contract announcement.
The euphoria proved to be short-lived, following ALOY’s Fri, 06 Mar 2026 announcement of a secondary public offering of 2.7 million shares at $18.50 /share, that was much lower than the market price of $21.69, at that time.
ALOY stock price fell by a massive -19.32% single-day, as investors sold shares to lock in profits.
The offering, which closed on Mon, 9 Mar 2026, was intended to raise approximately $50 million in gross proceeds for working capital and general corporate purposes.
The stock continued to bleed through late March 2026, hitting a low of $10.49 on 16 Mar 2026.
A consolidation "floor" seems to be establishing between $10.50 and $11.00.
Technical support is currently observed at $10.50. If this level fails, the next historical support resides near the 52-week low of $9.30.
MP materials.
In contrast, after a period of stagnation, MP has shown signs of recovery, climbing back toward the $60 mark after hitting a 2026 low of $54.97 in early January 2026.
Investors appear to be cautiously optimistic following 26 Feb 2026’s announcement of the $1.25 billion Texas "10X" campus, though the stock remains down from its 2025 highs.
Like ALOY, after the peak, MP faced downward pressure, tumbling nearly -8% on 19 Mar 2026.
A probable floor began to form around the $50.00 – $51.00 range.
Specifically, MP hit a low of $50.26 on 20 Mar 2026, following reports of US government financing its competitor.
On 25 Mar 2026, MP’s psychological and technical support level hovers around the $50.00 mark, as the price stabilized and recovered slightly to close at $53.74 by 25 Mar 2026.
It should remain range bound until another piece of ‘major’ good news makes its round and jot it hard enough to displace it from its orbit.
My viewpoints: (mine only)
This is what I think.
MP is the "darling" for institutional investors and US government. It is the only company with the sheer scale to move the needle on total national independence.
For its stock price to stay permanently at the higher echelon of price, it needs the $1.25 billion Texas "10X" magnet campus to be fully operational as soon as possible.
ALOY on the other hand should be a favorite due to its pure-play focus on heavy rare earth (HREE) conversion, crucial for defense magnets under the 2027 Pentagon ban on Chinese materials.
Its Ohio facility is 100% the "only game in town" for North American Sm/Gd/Dy/Tb metals, driving high-beta hype from funds chasing scarcity narratives.
If there is limited budget for one investment only, will it be MP or ALOY ? Tough decision ?
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Do you think in the longer term, MP will come up on top of ALOY’?
Do you think ALOY is a “riskier” investment given its tight partnership with the Saskatchewan Research Council (SRC) - a Canadian province's technology innovation unit; when relationship between Canada & the US is not exactly chummy.
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