What to Know Before Buying MP Materials Stock

• MP Materials has go a cardinal spouse of the Department of Defense successful the conflict to unafraid a home proviso of captious rare-earth materials and magnets.

• The company's aboriginal is secured by semipermanent proviso agreements with precise well-funded partners.

• The banal carries governmental and execution risk, which imaginable investors should consider.

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MP Materials (NYSE: MP) is an breathtaking institution that's operating astatine the forefront of the conflict to unafraid a home proviso of captious rare-earth materials. It has signed respective high-profile deals successful 2025 that helped elevate the banal terms and delight investors. But concern is much astir what a institution volition bash successful the future, alternatively than however it has done successful the past.

Here's what you request to cognize astir buying MP Materials banal now.

The institution owns and operates the Mountain Pass rare-earth excavation successful eastbound California, arsenic good arsenic a installation successful Texas that manufactures rare-earth alloys and magnets. In addition, it volition physique a 2nd magnet manufacturing facility, known arsenic "10X Facility" successful concordance with a transformational woody signed with the U.S. Department of Defense (DoD) earlier successful the year.

The DoD woody is conscionable 1 of the large deals signed this year. The 2nd was a $500 cardinal concern with Apple, which volition effect successful a important enlargement of the Texas installation to proviso Apple with rare-earth magnets starting successful 2027.

The 3rd woody was signed recently, whereby MP Materials and the DoD volition beryllium partners successful holding a 49% involvement successful a associated task with the Saudi Arabian Mining Company to physique a rare-earth refinery successful Saudi Arabia.

However, the archetypal woody with the DoD is by acold the astir significant, whereby the DoD has made a $400 cardinal concern successful MP Materials, becoming its largest shareholder and acceptable to ain 15% of the company. In addition, the DoD volition guarantee that magnets to beryllium produced astatine 10X volition beryllium purchased for a decade. In addition, the DoD "entered into a 10-year statement establishing a terms level committedness of $110 per kilogram for MP Materials' NdPr products stockpiled oregon sold," according to the property release.

These agreements underpin MP Materials' aboriginal currency flows and enlargement plans, and the marketplace was not dilatory to reward the banal accordingly.

That said, it's important to enactment that public-private partnerships are ever taxable to governmental risk. A caller medication could merchantability the equity stake, and though the commercialized statement would beryllium hard to set fundamentally, MP Materials remains taxable to regulatory approvals and is apt to necessitate further backing if it continues its expansionary plans.