Top Rare-Earth Mining Stock for June: MP Materials vs. USA Rare Earth

Key Points

• The U.S. heavily relies on China for processing rare-earth elements, creating a supply chain vulnerability.

• The U.S. government has invested significantly in MP Materials and USA Rare Earth to enhance their mining and processing capabilities.

• MP Materials operates the only large-scale rare-earth mining site in North America, while USA Rare Earth aims to develop the resource-rich Round Top mine in Texas.

The United States is facing a supply chain vulnerability concerning rare-earth elements, with China controlling up to 90% of their processing, according to The Motley Fool. To mitigate this risk, the U.S. government has invested in MP Materials (NYSE: MP) and USA Rare Earth (NASDAQ: USAR) to expand their mining and processing capabilities. MP Materials runs the only large-scale rare-earth mining operation in North America at the Mountain Pass mine in California, while USA Rare Earth is focusing on the development of the Round Top mine in Texas.

Recently, MP Materials entered into a 10-year agreement with the U.S. Department of Defense (DoD) for neodymium-praseodymium products at a price floor of $110 per kilogram. In contrast, USA Rare Earth secured a $1.6 billion deal under the CHIPS Act to establish a “mine-to-magnet” supply chain. MP Materials reported a production increase of 63% and a sales spike of 117% year-over-year in the first quarter, while USA Rare Earth is actively investing to build its mining and processing operations.