MP Materials sinks as investors wake up to America’s dependence on China for rare earths

Just one week after U.S.-based rare earth mining companies soared on trade war optimism, the sector came crashing back down Monday.

The sell-off is a stark reminder of how closely American miners remain tied to China.

MP Materials (MP), the largest U.S. rare earth producer, announced it has halted all exports of rare earth concentrate to China in response to retaliatory tariffs imposed by Beijing.

"Selling our valuable critical materials under 125% tariffs is neither commercially rational nor aligned with America's national interest," the Nevada-based company said in a statement.

MP stock fell 12.3% Monday, exactly one week after surging 21.7% on news that rare earths could become the next battleground in President Trump’s trade war.

"We have been preparing for this moment since day one," MP added. "Our mission, capital strategy, and execution reflect a long-term vision built to withstand short-term dislocation and emerge stronger."

Decoupling from China is harder than Trump promised

MP has invested nearly $1 billion to reestablish a rare earth supply chain in the U.S., and says it now refines about half its output in California. The company is also ramping up domestic magnet production at a facility in Texas.

The company exports “virtually all” of its productiion outside China to buyers in Japan, South Korea, and the U.S.

Even so, the move to cut off shipments to China — where rare earth concentrate was sent for final processing — could leave a major dent in MP’s top line.

According to Reuters, the company derived roughly 70% of its revenue from that Chinese partnership, which centered on sales to Shenghe Resources.

Despite its push to scale U.S. production, MP can’t catch up with China soo enough: China mined 270,000 metric tons of rare earths in 2024, compared to just 45,000 tons in the U.S.

Globally, China still supplies nearly 90% of the world’s rare earths.

MP wasn’t the only rare earth miner caught in the selloff. USA Rare Earth (USAR) tumbled 11.7%, while Ucore Rare Metals (UCU) dropped 12.9% on the day.

With China hitting back at U.S. tariffs — and the global rare earth supply chain still flowing through Beijing — investors are waking up to the fact that decoupling from China’s mining grip won’t be as easy as Trump promised.