MP Could Be A Huge U.S.-Based Rare Earth Winner

By LYNN CARPENTER

April 13, 2025

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Headlights, lasers, spark plugs, drones, steering wheel controls…

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So what if some backward-looking politicians want to freeze the world at the era of gas-powered cars and make the world safe from EV’s? China has already put us in a heavy  metals crunch that’s about  to get much worse thanks to new US tariffs.  Because, even if we don’t make a single EV from here on, we still need the lasers and steering wheels that depend on rare earth heavy metals.

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The Mountain Pass Mine in California is the only working US source for heavy rare-earth metals. MP Materials (NYSE:MP) is the majority owner of the whole operation, and the stock just hit a 1-year high at $28.30 on April 14.

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As we write, the President Trump has announced that he wants to increase the US stockpile of these metals. Couple that push with already strong demand and trouble getting these metals out of China, and MP is the only stock ready in place to win this struggle.

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China supplies 99% of the world’s is heavy rare-earth metal exports now. It’s blocking exports to the US, Germany and Japan pending new export licenses. Those licenses are slow coming. Could China relent? Of course, but there’s not much incentive for the country to do that since Chinese companies, BYD and Tesla already claim most of the supply.

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The strategic value of Mountain Pass is clear, but MP stock comes with some caveats. It has a decent P/E ratio at 20, albeit with a negative profit margin. But… next year’s revenues are expected to increase mightily. Average consensus is a 68% jump in sales. That could put the company back in the black, like it was just a couple of years ago.

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This might not be one for your “widows and orphans” super-safe portfolio, but it’s worth a look. Its potential is strong, and its outlook makes it a reasonable speculation. You could use a stop loss if you like. A good spot to place that would be at $23. That would allow you to follow it higher as long as it stays above support and on its uptrend.