MP Materials Pops 9% as U.S. Teams With Saudi Arabia to Weaken China’s Grip on Rare Earths

MP Materials shares traded higher Wednesday after the company said it will partner with the U.S. Department of Defense and Saudi Arabia’s Maaden to build a rare-earth refinery in the Kingdom. The announcement adds another piece to the U.S. effort to reduce reliance on China for materials used in electric vehicles, renewable energy and defense equipment.

Under the agreement, Maaden will hold at least 51% of the joint venture. MP Materials and the Pentagon will share the remaining 49% stake, with the U.S. government covering the full American contribution. MP will supply the technology, engineering support and operational experience needed to run the refinery once it’s complete.

Shares rose nearly 9% following the news.

The planned facility will process both light and heavy rare-earth elements… a mix that matters because each group plays a different role in modern manufacturing. For instance, light rare earths show up in batteries, speakers and consumer electronics. Heavy rare earths, meanwhile, are essential for producing high-performance magnets used in EV motors, drones, missile systems and aircraft components.

It’s no secret China currently dominates refining for both categories. As a result, any disruption (whether political or economic) could ripple across industries. That concern has pushed the U.S. to look for new processing partners, and the joint venture with Saudi Arabia marks another attempt to build a more stable supply chain.

To put the deal in context, MP operates the Mountain Pass mine in California, the only rare-earth mining and processing site in the U.S. While Mountain Pass produces significant volumes of light rare earths, MP’s domestic heavy separation facility isn’t fully online yet. Until that capacity is finished, a second refinery abroad gives the company more options and helps the U.S. secure materials faster.

Saudi Arabia has been trying to expand its mining industry as it looks to diversify away from oil. The government says the country may have more than $2 trillion in untapped mineral deposits, and Maaden has been stepping into new areas… including metals tied to EV production and clean energy systems.

The partnership also comes as Washington and Riyadh hold a series of business meetings this week, reflecting a renewed effort to strengthen economic ties. The timing suggests both countries see rare-earth materials as an area where cooperation can move quickly.

James Litinsky, MP Materials’ chief executive, said the new refinery will help the company process more of its output and give customers a more dependable supply of rare-earth materials. He said the combination of MP’s experience and Maaden’s size “creates a clear path to meaningful new capacity.”

MP’s stock has been extremely volatile over the last year, but Wednesday’s jump shows investors are willing to reward progress on new refining capacity… especially when Washington is involved.

At the time of publishing this article, Stocks.News doesn’t hold positions in companies mentioned in the article.