Highlights

• U.S. Department of Defense partners with MP Materials to challenge China's 85% rare earth processing monopoly
• Current rare earth investments and projects only marginally reduce Chinese market control.
• Geopolitical and industrial complexities require a multilateral approach beyond simple U.S.-China competition.

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Barron’s (opens in a new tab) rightly highlights China’s commanding position: about 85% of global rare earth processing remains in Chinese hands. The historical examples are also accurate—China cut export quotas in 2011 during a dispute with Japan, and export license delays in 2025 spooked automakers and defense contractors. The U.S. Department of Defense’s partnership with MP Materials is indeed a landmark, featuring government equity, price floors, and guaranteed magnet offtake.

Where the Story Gets Glossy

The claim that the MP deal “breaks the back of Chinese mercantilist policies” is overstated. A $400 million stake and a price floor for NdPr is significant but not sufficient. The U.S. magnet demand is about 50,000 metric tons annually; MP’s projected 10,000-ton capacity covers only a fraction. Other projects like USA Rare Earth (Round Top) and Ramaco (Brook Mine) remain years from meaningful production. This context is underplayed in Barron’s investor-centric framing.

Investment Hype vs. Industrial Reality

The stock narrative is breathless. MP’s valuation assumes long-term success without acknowledging risks, including technology scale-up, environmental permitting, and lingering dependence on Shenghe Resources for offtake, as well as the complexities of magnet production.  We must remember that in today’s world, every line of magnet remains bespoke to a great extent.  Similarly, the portrayal of Ramaco’s rare earth pivot glosses over the fact that it remains primarily a coal company with speculative critical minerals exposure. Lynas is presented as trailing without noting its unique global position as the only non-China integrated miner-refiner currently in production.

What’s Missing in the Frame

Barron’s largely ignores heavies (dysprosium, terbium, yttrium)—the critical bottleneck for EVs, wind turbines, and defense. MP focuses on light rare earths; the U.S. still has no secured domestic pathway for heavy rare earths. Equally absent is the broader geopolitical reality: China’s “Big Six” consolidation, Myanmar’s instability, and the EU’s moves to subsidize refining. The framing as a U.S.–China duel sidelines allies and the multilateral nature of supply resilience.

Why This Matters

The Barron’s piece captures market excitement but simplifies structural complexity. Yes, the DoD-MP deal is a paradigm shift. But rare earth dominance is not broken—it has merely been nudged. Investors, policymakers, and industry watchers should separate fact from narrative gloss: the U.S. has made a bold down payment, not a victory lap. Rare Earth Exchanges (REEx) suggests Barron’s feeding into “the narrative” promulgated from Washington DC, but not necessarily the reality on the ground.

Citation: Al Root, “How the US will break China’s rare earth dominance—and how to play it,” Barron’s via Mint, Sept. 12, 2025.

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