MP Materials, the American rare earth company, released its latest financial report on Thursday, August 7th, despite still being in a loss-making situation for the second quarter. However, the neodymium-praseodymium (NdPr) production increased by more than twice annually, and the total revenue surpassed market expectations, reflecting the effectiveness of its strategy to shift from raw material exports to high-value magnetic materials.
With China restricting rare earth exports and global supply chains remaining tense, the Trump administration is hastening the establishment of domestic rare earth production capacity.
MP currently operates the only commercially active rare earth mine in the United States at Mountain Pass, California. While other mines in areas like Elk Creek in Nebraska or Brook Mine in Wyoming are in the development phase, they are not operational yet. As critical minerals gain more attention, MP’s stock price has risen by 332.8% this year.
Following the announcement of the second-quarter financial report, MP’s stock price surged by an additional 8% in after-hours trading.
During this quarter, MP significantly increased both production volume and revenue, indicating rapid expansion of its production capacity. According to the company’s financial report, for the second quarter ending on June 30, rare earth concentrate production increased by 45% year-on-year, reaching 13,145 metric tons, a historical second-highest record for the company. The production of neodymium-praseodymium oxide reached 597 metric tons, a staggering 119% increase from the same period last year.
Meanwhile, MP’s revenue for the second quarter was $57.4 million, far exceeding analysts’ expectations of $46.7 million, marking an 84% growth from the same period last year. The adjusted loss per share was $0.13, outperforming the market’s expected loss of $0.20 per share and showing a 24% improvement compared to the same period last year.
James Litinsky, the CEO of MP, mentioned during the financial conference, “In the second quarter, our materials department achieved a new high in neodymium-praseodymium oxide production and also realized the second-highest rare earth oxide production in MP’s history.”
He further pointed out that the magnetic materials department began trial production in this quarter and achieved profitability.
The transformational success of MP in the second quarter is also reflected in its revenue structure. According to the company’s financial report, the magnetic materials department generated revenue of $19.9 million this quarter and achieved an $8.1 million EBITDA, marking the department’s first complete operating quarter that can be compared with the main business.
Simultaneously, rare earth concentrate sales revenue declined significantly by 51% to $11.9 million, showing MP’s gradual breakaway from reliance on raw material exports, shifting towards high-value neodymium-praseodymium oxide and metal products.
MP stated in the financial report that it has ceased exporting rare earth concentrate to China and has redirected more output into midstream and downstream processes to produce and sell neodymium-praseodymium oxide and magnetic materials. This move further strengthens its supply chain independence and risk resistance.
MP aims to become “a vertically integrated magnetic material supplier” and views the current transformation as a crucial step into the “physical AI era.”
As China imposes stricter limitations on rare earth exports, the global defense industry supply chain is under significant pressure. According to the Wall Street Journal, Beijing has mandated all buyers to provide usage explanations, including product design drawings, production line photos, and a list of end-users; otherwise, shipments will not be allowed. While civil orders can still be approved, requests related to military applications are generally facing delays or blockades.
These restrictions have led to a dire situation for many American defense contractors. A drone parts supplier has had to postpone military orders for up to two months, with some companies receiving quotes up to 60 times higher than normal prices. The price of samarium, used in manufacturing high-temperature magnets, has recently hit a historic high.
Bill Lynn, the CEO of Leonardo DRS, cautioned that the company’s germanium inventory has fallen to a “safety level” and emphasized, “To ensure timely product delivery, raw material supply must improve in the second half of 2025.” The company is currently seeking alternative supply sources and redesigning products to reduce dependence on germanium.
To address supply chain risks, the U.S. government is increasing investments in strategic minerals. The Department of Defense provided $14 million to a Canadian company last year to expand germanium production.
In July of this year, the Pentagon further invested in expanding rare earth production capacity at MP and acquired a majority stake in the company, becoming its largest shareholder. This multi-billion-dollar agreement also guarantees a minimum purchase price of $110 USD per kilogram for neodymium-praseodymium alloys, nearly double the current market price in China, helping safeguard American companies’ revenue and withstand manipulation of market prices by the Chinese government.
Additionally, the U.S. has mandated that all defense contractors cease using magnetic products containing Chinese sources by 2027.
Last month, MP also signed a $500 million supply agreement with Apple, earmarked to help construct a production facility in Texas.