MP Materials Corp. (NYSE:MP) stock rose Monday as rare earth stocks advanced following reports of a significant U.S. government investment in rival USA Rare Earth Inc. (NASDAQ:USAR), underscoring renewed policy focus on domestic critical minerals.
Trump Administration’s $1.6 Billion Investment
The Trump administration is planning to invest $1.6 billion in USA Rare Earth, marking its biggest investment in the rare earth sector, according to a Financial Times report published Friday. The U.S. government will acquire a 10% stake in the Oklahoma-based miner, which holds substantial U.S. deposits of heavy rare earths.
The investment, expected to be announced Monday along with a $1 billion private financing deal, positions the government to receive 16.1 million shares and warrants for an additional 17.6 million shares at $17.17 each, per the report.
Additionally, USA Rare Earth will gain $1.3 billion in senior secured debt financing sourced from a facility under the CHIPS and Science Act of 2022.
Securing Critical Supply Chains
This move is part of Washington’s broader strategy to secure essential mineral supplies and reduce reliance on foreign nations, particularly China, for key resources.
The Commerce Department and the Defense Department have collaborated to enhance domestic rare earth production as part of national security objectives.
MP Materials, in which the Trump administration previously acquired a 15% stake, benefited from the sector-wide momentum. The company closed Friday’s regular session at $69.58, up 1.77%.
Price Action
MP Materials shares were up 5.07% at $73.11 during premarket trading on Monday, according to Benzinga Pro data. USA Rare Earth surged 36.58% to $33.83, leading gains across the rare earths and critical minerals space.
Other stocks in the sector were also trading higher. Lithium Americas Corp. (NYSE:LAC) rose 5.59%, while Critical Metals Corp. (NASDAQ:CRML) advanced 3.78%. Energy Fuels Inc. (NYSE:UUUU) gained 4.98%, and Ramaco Resources Inc. (NASDAQ:METC) jumped 6.46%. NioCorp Developments Ltd. (NASDAQ:NB) was up 7.40% in early trading.
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