Roughly ten years after acquiring a defunct rare earths mine that was literally submerged in water, MP Materials CEO James Litinsky has successfully transformed his company into a critical asset for America’s national security.
China gained control of the rare earth industry from the United States in the 1990s and has since dominated the entire supply chain. This includes everything from mining and processing to, crucially, the manufacturing of powerful magnets made from these elemental metals, which are vital components in modern technology like smartphones, robots, fighter jets, and drones. When President Trump implemented tariffs in April 2025, China retaliated by limiting sales of certain rare earth elements and magnets to the U.S., demanding detailed disclosures on their intended use from importing companies.
“As it stands today, we need permission from the Chinese government to make things. We need permission from the Chinese government to make military things,” Litinsky stated. “The practical reality is, that is not an acceptable condition.”
What are rare earths and where are they in the U.S.
Despite their name, rare earths are not truly rare; what is scarce are deposits with sufficiently high concentrations and accessible locations to make extraction economically viable. There are 17 rare earth elements in total, each a distinct elemental metal on the periodic table.
These metals are not as commonly known as iron, copper, or aluminum. Examples include europium, which enhanced red colors in early televisions, and neodymium, used to strengthen and miniaturize magnets. These “rare earth permanent magnets” are integral to everything from high-speed trains and electric vehicles to the tiny motors that vibrate iPhones, as explained by Julie Klinger, a professor of environmental studies at the University of Wisconsin-Madison and an expert on rare earths.
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“The thing that distinguishes rare earth elements are their fantastic magnetic, conductive and optical properties,” Klinger elaborated. “So they’re used often the way you might use spices in cooking, because if you add just a little bit of a certain rare earth element, say, to a magnet, that enables that magnet to be both very small and very powerful.”
The Mountain Pass deposit in California was discovered by geologists in 1949. By the 1960s, individual rare earths were being extracted, separated, and put to use, establishing Mountain Pass as the world’s leading rare earth mine for several decades.
However, the operation eventually relocated overseas as China offered a cheaper alternative.
“It’s a dirty business. It’s a risky business,” Klinger commented. “It’s a difficult business to really break even.”
Mountain Pass suffered due to globalization and also faced U.S. environmental regulations in the 1990s after minor leaks of radioactive water and residue into the Mojave Desert. The mine lay dormant for a decade until Molycorp, a new company, attempted unsuccessfully to compete with China and revive the operation. Molycorp ultimately filed for bankruptcy in 2015.
What China’s rare earth dominance means for the U.S.
Currently, China possesses a near-monopoly on the strategic metals essential for rare earth permanent magnets, components fundamental to much of the modern world, according to Secretary of the Interior Doug Burgum. He noted that China has done more than just corner the market.
“They also weaponize it, because if anybody in the rest of the free world said, ‘Hey, we’re going to start mining and we’re going to start refining,’ then they would target that particular mineral, dump a quantity onto the market, drive the price down. And companies, including U.S. companies that were profitable, suddenly became unprofitable,” Burgum explained.
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Currently, over 90% of the world’s rare earth magnets are manufactured in China, as stated by MP Materials CEO James Litinsky.
Last April, Mr. Trump introduced his global tariffs plan, labeling it Liberation Day. China responded with devastating effect, temporarily cutting off rare earth supplies to the U.S. This forced companies like Ford Motor Company, suddenly lacking a reliable source of magnets, to halt production of Explorer SUVs. After a series of trade negotiations, China resumed sending rare earth magnets to the U.S., albeit with specific restrictions.
In November, following a trade agreement with China, Mr. Trump informed 60 Minutes that China had been “very strongly threatening” the U.S. by leveraging its control over rare earths.
The current U.S.-China trade truce is scheduled to expire in eight months. Without a new agreement, the nation’s rare earth supply remains vulnerable, at least in the short term.
As part of a national strategy to counter China’s dominance in rare earths, senior Trump administration officials called Litinsky and Michael Rosenthal to Washington in April 2025. These two men operate America’s sole active rare earth mine and were in the process of building a rare earth permanent magnet factory.
Reviving the U.S. rare earth industry
Litinsky first entered the rare earths sector a decade ago. While managing a Chicago hedge fund, a 60 Minutes report on rare earths drew his attention to the Mountain Pass mine and China’s industry control. Later, seeking value in distressed assets, Litinsky learned of Molycorp’s struggles—the company that had failed to revive Mountain Pass—and its eventual bankruptcy. He ultimately acquired ownership of the mine and refinery, then enlisted his friend Michael Rosenthal, also a hedge fund professional, to help relaunch it.
When they assumed control in 2017, the enterprise was struggling financially and literally underwater: China had saturated the rare earth market, driving down prices, and 30 million gallons of groundwater had accumulated at the bottom of the mine, forcing its closure, despite Molycorp’s $2 billion investment in upgrades to improve its environmental performance.
MP Materials began with just eight employees under Litinsky and Rosenthal. Today, the Mountain Pass site alone employs over 700 people.
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Rosenthal noted that while mining is relatively straightforward, the true challenge lies in separating rare earths from the surrounding rock, and then from each other.
In 2023, MP achieved a significant milestone: after investing nearly another billion dollars into the site, they successfully refined neodymium and praseodymium to 99.9% purity.
However, MP Materials required one final component to bypass China and secure a fully integrated supply chain: the capability to manufacture their end product—the powerful rare earth magnets vital to the modern world. To achieve this, they constructed a facility in Fort Worth, Texas, where pure rare earth oxide from Mountain Pass is melted, cooled, compressed, cut, and ultimately shaped into magnets. This development positioned MP as the sole company globally to oversee the entire rare earth magnet supply chain, from mine to finished magnet, thereby achieving independence from Beijing. They anticipate scaling up to produce a million magnets daily soon. Litinsky confirmed that their first client, General Motors, will begin incorporating rare earth magnets from MP Materials into their vehicles later this year.
A call from Washington
Last spring, however, conditions were less favorable. After Mr. Trump announced tariffs in April 2025, major manufacturers and the U.S. government faced challenges as China restricted the supply of rare earths and supermagnets. Given their control of America’s only “one-stop” rare earth mine, refinery, and magnet-manufacturing operation, Litinsky and Rosenthal were summoned to the Pentagon.
“The Pentagon wanted a Manhattan-style project to accelerate the entire supply chain of rare earth magnetics in the country,” Litinsky revealed.
Litinsky and Rosenthal were tasked with rapidly expanding all aspects of their operations, leading to an unusual deal. The Pentagon agreed to invest $400 million in MP Materials (plus an additional $150 million for developing a refinery to process “heavy” rare earths) and acquired a 15% ownership stake in the company. Crucially, the agreement included a guaranteed 10-year price floor of $110,000 per kilogram for MP’s rare earth oxide, with a promise to compensate the company if market prices fell below this threshold. This ensures MP’s protection against potential market flooding by China. If rare earth oxide prices rise above the floor, the U.S. government shares in the profits.
The government also requested MP Materials to increase rare earth magnet production tenfold. To meet this demand, Litinsky is constructing an even larger rare earth magnet factory in Northvale, Texas. The company projects that this plant, dubbed “10X,” will be capable of fulfilling the nation’s most critical rare earth magnet requirements upon its expected completion by 2028.
Burgum, a strong proponent of public-private partnerships and the revitalization of U.S. industrial policy, defends the MP deal, even if it diverges from strict market capitalism principles.
“I’d certainly call it pragmatism,” Burgum asserted, “because free markets work, but they don’t work if you have an adversary that controls a monopoly that control[s] the prices.”