Highlights

• Virginia Tech professor Aaron Noble emphasizes the importance of rare earths as tiny but crucial elements that enable advanced technologies such as electric vehicles, defense systems, and smartphones.
• The Department of Defense has a 10-year agreement with MP Materials, marking an unprecedented industrial policy aimed at developing a domestic rare earth supply chain.
• Key investor concerns regarding U.S. rare earth production include execution risks, potential market limitations, and geopolitical uncertainties.

---

Virginia Tech mining professor Aaron Noble compared rare earths to “cinnamon and nutmeg in a cake”—small in volume but essential for function. That analogy holds: while iron and aluminum dominate tonnage, rare earths like neodymium and dysprosium enable permanent magnets in EVs, defense systems, and smartphones. Noble is also correct that permitting and building new mines can take 17+ years, a timeline echoed across mining industry reports. That lag is why China’s decades-long head start remains so difficult to close.

Pushing the Narrative?

The recent piece in Newswise highlights the Department of Defense’s 10-year deal with MP Materials, which includes a guaranteed price floor for NdPr and long-term offtake. Noble describes this as unprecedented in U.S. mining policy—a fair point. But describing it mainly as “providing price stability the mine needs” risks glossing over the policy’s broader implications: effectively, the Pentagon appears to be underwriting an entire supply chain leap from ore to magnets. For retail investors, that’s not a small footnote—it’s industrial policy at warp speed.

Missing Ingredients in the Mix

While Noble explains the volatility of rare earth prices and the financing challenges, the article sidesteps critical investor questions:

• Execution risk: Can MP scale separation, metal-making, and magnets on the timeline promised? Even MP’s CFO has hinted that the ramp may not be linear.
• Competition factor: If the DoD locks in MP's offtake, what room is left for other U.S. or allied projects to compete? Could vertical integration by fiat discourage broader ecosystem development?  And what about some other projects up and coming?
• Geopolitical wildcards: What happens if Beijing responds with further technology export restrictions, or if demand cycles undercut the price floor the U.S. taxpayer is guaranteeing?

Rare Earth Exchanges Take

Professor Noble rightly underscores why rare earths matter and why the U.S. is finally investing substantial resources in addressing the problem. However, investors should cut through the metaphor of cinnamon and spice. A 10-year DoD contract may guarantee stability for MP, but it also concentrates risk in a single player with an incredibly tight execution window. For a sector defined by long timelines and volatility, the unanswered question is this: has Washington built resilience, or just placed one very large bet?

Source: Newswise (opens in a new tab) / Virginia Tech, Aug. 27, 2025. “Expert Explains Rare Earth Elements — and Why the Department of Defense Is Investing in Them.” By Melody Warnick.

©!-- /wp:paragraph -->