Transport yourself back in time to your 7th or 8th grade science classes; you’ll remember diving into the periodic table of elements. You have the nonmetals, metals, transition metals, noble gases… and then, as if they almost got left out, at the bottom of this big block of elements, there’s a separate group of 17 metallic elements divided into 2 subgroups: the lanthanides and the actinides. These are what we commonly call rare earth elements (REEs). They’re not as rare as their name suggests. In fact, they’re abundant in the Earth’s crust, but they are not commonly found in concentrated deposits that make it feasible or economically efficient to mine¹, hence the “rare” part. I’m not qualified to give you lessons on chemistry, but what I can do is tell you how the race to REE autonomy in the West will significantly impact the financial markets. And it has already begun.
It turns out that REEs are essential components in the manufacturing of devices that we use every day. You need them to make magnets used in computer hard disk drives, speakers, headphones, cell phones, cameras and other electronics². They’re a critical component of motors and batteries used in electric vehicles and hybrid cars, wind turbines and other power generators³, all sectors that have been heavily subsidized by previous administrations. You’ll find them in glass and ceramics, medical imaging devices and lasers…and lastly, they’re crucially applied in defense military technology and equipment⁴, a segment of direct national spending that got a massive boost on the recently passed budget. Let’s stay on this for a second.
On June 3rd 2025, U.S. Secretary of State Marco Rubio delivered a speech at the “New World Gala” where he addressed how the world had become dependent on Rare Earth Elements from China and how this dependency had become a national security threat. I’ve included the link to the full speech at the bottom of this page. He said:
“On geopolitical issue after geopolitical issue, it is access to raw material and industrial capacity that is at the core, both of the decisions that we’re making and the areas that we’re prioritizing… Because we have realized that our industrial capability is deeply dependent on a number of potential adversary nation states. Including China, who can hold it over our head… the fact that you can never be secure as a nation unless you’re able to feed your people. And unless you’re able to make the things that your economy needs in order to function and ultimately to defend yourself. There is virtually none of the leading-edge industries of the 21st century in which we don’t have some level of vulnerability, and it’s become one of the highest geopolitical priorities that we now face. Not simply access to raw material but figuring out how can we have more industrial capacities in these critical fields. Ideally domestically, but if not here, then diversify the global supply chain so that it cannot be used against us as a point of leverage at a time of potential conflict.” ⁵ - Secy. Marco Rubio
It is no secret that China dominates a whooping 85% of the global REE market, through mining, refining, production and manufacturing. And it was by design that they came to control the global supply. In the 1980’s, the Minister of China Deng Xiaoping stated, “The Middle East has oil; China has rare earths”. Lower labor cost, difficult environmental regulation in the US and foreign subsidies created the perfect environment to defer critical mineral production to China. In fact, it was encouraged. Nationally and throughout the entire western countries, we were transitioning out of an industrial area, and China saw an opportunity. ⁶
Fast forward to today, the new administration has declared the race for rare earth elements a top priority, and if you read the “One Big Beautiful Bill” and looked slightly beyond the Medicaid cuts, the immigration budget spending increases, the tax cuts on tips and so forth, you would’ve found buried in the defense spending proposal the GOP’s plan to revolutionize our industrial capacity through a plot to become self-sufficient in REE mining capacity, production and manufacturing, within our newly “upgraded” defense budget.
In the US there is a clear benefactor of this governmental commitment, and that is MP Materials (NYSE: MP), who owns the Mountain Pass mine in California, the ONLY active rare earth mine in the United States and one of the world’s most significant deposits of REEs. Formerly owned by Molycorp, MP Materials acquired the mine out of bankruptcy in 2017 and focused on restarting its operations over the following 3 years. The CEO and founder James Litinsky, an investment manager with a focus on alternative investments, devised a clear path to success by strategically building a full supply chain on REEs. This meant that for the first time since the 1960s, MP Materials would not only mine, separate and refine REEs, but also manufacture the magnets needed for military defense, and an array of commercial uses discussed at the start. All within the US. This is their competitive advantage, and it happened to be exactly aligned with this administration's goals.
On July 10th 2025, the Department of Defense (D.o.D) became the largest stakeholder of MP, creating a strategic alliance between the government and the private sector to return REE full supply capability and dominance to the United States. You can read more about the details of this partnership here: MP Materials Announces Transformational Public-Private Partnership with the Department of Defense to Accelerate U.S. Rare Earth Magnet Independence
Exposure to the REE sector is proving to be a prioritized aspect of the financial gains this administration is setting up the country to benefit from. And while some may argue the government has attempted to nationalize a sector, the potential long-term benefits of exposing the KFSC Risk Managed strategies to MP Materials became evident and hard to pass. The other future "potential players" in the sector are either in the beginning stages of exploration and discovery, unfunded or caught up in the bureaucracy of acquiring necessary permits, in summary, several years away from becoming operational. This partnership between MP and the D.o.D. injects the company and overall sector, with direct revenue, price stability, the financial means to increase production capacity, expand operations, confidence in the sector and the ability to directly challenge China. And it seems to be just the beginning of a long-lasting commitment to the REE sector. In the race for autonomy, only the runner up has the best chance of keeping up with the lead. Currently, that's MP Materials.
And while we're talking about commitment to the domestic supply chain, MP entered into a long-term $500 million agreement with the technology company Apple, Inc (AAPL) to supply the company with rare earth magnets manufactured domestically with 100% recycled material (including $200 million in prepayment for supply beginning in 2027). All this in addition to existing long-term commitments with other organizations such as General Motors (GM), and financing commitments for construction of magnet manufacturing facilities from JP Morgan Chase and Goldman Sachs worth $1.0 billion. It proves that in this new era where the US is pressuring industries for self-sufficiency, a reliable supply chain is proving to be a highly desired commodity for the public sector and investors alike.
¹. Don't Panic about Rare Earth Elements | Scientific American
². Science of Rare Earth Elements | Science History Institute
³. Lanthanum: Properties and Applications
⁵. Secretary of State Rubio Speaks at the New World Gala - American Compass
⁶. China’s Rare Earth Dominance and What It Means for the World - Zimtu Capital Corp.
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