Does Chamath Palihapitiya ‘Control’ Large REE Supply At Full Capacity Capable of 25% of World’s Needs?

Highlights

• Chamath Palihapitiya, a venture capitalist, has significant investments in MP Materials.
• MP Materials is the only rare earth mine in the US, potentially supplying 25% of global rare earth needs.
• MP Materials operates the Mountain Pass mine in California.
• The Mountain Pass mine currently produces approximately 15% of global rare earth content, with plans for expansion.
• The company faces financial challenges with negative earnings.
• Despite financial challenges, MP Materials maintains strong investor interest due to its strategic importance in diversifying rare earth supply chains.

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According to a recent X message, (opens in a new tab) ex-special purpose acquisition corporation (SPAC) investor and participant in the All In Podcast, (opens in a new tab) Chamath Palihapitiya, claims he controls sufficient Rare Earth Element (REE) products that, at full capacity, could support 25% of the REE-based needs outside of China. But is this true? It may be a stretch, but he is a heavy hitter in the world of REE investing.

According to his tweet:

“Keep calm. Carry on. This may be a good moment to let everyone know that I control one of (if not the) largest, rare earth supplies outside of China. At full capacity it can be 25% of what the world needs. All located within countries allied with the US and the US itself.”

Chamath Palihapitiya

(opens in a new tab)

The SriLankan-born Canadian-American venture capitalist and entrepreneur and founder and chief executive officer of Social Capital previously served as an early senior executive at Facebook from 2007 to 2011.

What’s His Position?

​The prominent venture capitalist has actively invested in the REE sector, notably through his involvement with MP Materials Corp (opens in a new tab)., which owns and operates the Mountain Pass mine in California. Of course, this is the only in-production rare earth mine in the United States. Importantly, MP Materials still ships a significant amount of product to China for processing.

This mine is the only rare earth mining and processing facility of scale in the Western Hemisphere and currently produces approximately 15% of the global rare earth content. ​

In November 2020, MP Materials completed a business combination with Fortress Value Acquisition Corp. (opens in a new tab), a special purpose acquisition company (SPAC). This transaction, which included a $200 million investment led by institutional investors such as Slate Path Capital (opens in a new tab), Chamath Palihapitiya, and Omega Family Office (opens in a new tab) (Leon Cooperman) aimed to fund MP Materials’ strategic plan to retrofit and fully recommission its on-site refining facilities. ​

Palihapitiya has publicly highlighted the strategic importance of rare earth supplies outside of China. He stated that at full capacity, MP Materials’ Mountain Pass facility could supply 25% of the world’s rare earth needs, all sourced from countries allied with the United States. ​So, in this way, Palihapitiya has an interest but is not necessarily in control.

According to the company’s S-1 (opens in a new tab), the ex-Facebook executive actually possesses 2.5 million shares, representing 1.4% of the company’s stock.

Feasibility of Supplying 25% of Global Rare Earth Needs

The claim that MP Materials’ Mountain Pass facility can supply 25% of global rare earth needs is ambitious. Currently, the facility produces approximately 15% of the world’s rare earth content. Scaling production to meet 25% would require significant investment in infrastructure, technology, and workforce, as well as navigating environmental and regulatory considerations. Additionally, the global rare earth market is complex, with China’s dominance posing both a challenge and an opportunity for diversification.​

Could Palihapitiya control other undisclosed REE holdings? Well, it’s possible, but there is no evidence of any major deals. He most certainly has the resources and know-how to be involved in more.

Observations

Chamath Palihapitiya’s investments and strategic initiatives in the rare earth sector, particularly through MP Materials, underscore the critical need for diversified and secure rare earth supplies. While the goal of supplying 25% of global rare earth needs from allied countries is ambitious, achieving it would necessitate substantial advancements in production capabilities and supportive policy frameworks.  As Rare Earth Exchanges has chronicled, industrial policy is likely necessary for full competition against China.

The success of such endeavors is vital for reducing reliance on dominant players like China and ensuring the stability of supply chains essential for modern technologies and national security.

As for his “control” over MP Materials the top five investors include:

Top Institutional Investor	%
Blackrock Inc.	9.94%
Hancock Prospecting Pty Ltd	8.48%
Vanguard Group Inc.	7.78%
State Street Corporation	4.27%
Price (T. Rowe) Associates Inc.	4.00%

18.79% of the total stock is owned by insiders. 14.5% of the total float are held in short positions.

MP Materials, a key U.S. rare earth producer, is navigating a volatile market with mixed financial signals.  But Rare Earth Exchanges has pointed out that this company due to its position and solid management represents an American treasure trove. With this in mind Chamath Palihapitiya is well positioned.

Again as cited above and per the S-1 filing to the SEC (opens in a new tab) Chamath Palihapitiya is associated with stock controlled by ChaChaCha 2019 Trust DTD based in Menlo Park, California. His holdings are 2.5 million shares at the time representing 1.4%. Certainly not a trivial amount but not representative of control either. But perhaps he owns other sources?

As of April 4, 2025, its market cap stands at $3.77 billion with a recent 7% stock dip, though after-hours trading showed slight recovery. The company posted a net loss of $65.4 million over the trailing twelve months, with a -32.1% profit margin and -68.0% operating margin.

Valuations remain high despite negative earnings, with a forward P/E of 24.1 and a steep EV/EBITDA ratio of 496.4, signaling investor expectations outpacing current profitability.   This can be justified based on the truly unique position this company has based on the California mine, Texas activity and deals with major corporations “ex” China.

While quarterly revenue jumped 48% year-over-year to $203.9 million, MP’s EBITDA remains deeply negative at -$84.3 million. The balance sheet reflects strong liquidity (current ratio: 6.29) with $850.9 million in cash, but high leverage persists with nearly $919 million in debt and a debt-to-equity ratio of 87.1%.

However, investor interest remains strong—institutions hold 76% of shares—but short interest is elevated at 14.6% of float, suggesting skepticism or speculation. With a 52-week price gain of 44%, MP’s long-term outlook hinges on execution amid rising demand for domestic critical minerals. 

Rare Earth Exchanges suggests should the American government get more serious about industrial policy the MP Materials valuation could very well skyrocket.

As for Mr. Palihapitiya’s positions in the REE space, Rare Earth Exchanges will continue to monitor.