Better Rare Earths Investment Alternatives to MP Materials Corp.
Continuing our focus on the Rare Earth Elements opportunity that is representative of asymmetric risk vs return scenario, we’ve identified some other players who have better looking fundamentals than MP. The Department of Defense’s $400 million investment into MP Materials (MP 0.00%↑ ) underscores the importance with which the United States seeks to reduce its vulnerability to Chinese supply dominance.
But MP Materials has to export its Rare Earth ores to China for processing, because they lack the infrastructure as yet to process them in the United States.
Rare earth ores require complex chemical separation processes to isolate individual elements such as neodymium, praseodymium, dysprosium, etc.
Their strategic value is due to their integral role in the manufacture of advanced technologies, particularly in renewable energy systems, electric vehicles, aerospace, and defence. While MP Materials, which controls the Mountain Pass mine in California, has emerged as a dominant North American player. concerns about concentration risk, valuation multiples, and geopolitical exposure constitute elevated risk relative to other names in the space.
Market Dynamics
Global Market Size: As of 2024, the global REE market is valued at approximately USD $5.6 billion and is projected to grow at a CAGR of 10.4% through 2030.
Key Demand Sectors:
Permanent magnets (NdFeB) for EVs and wind turbines (~40% of global demand)
Catalysts and fluid cracking units (~20%)
Defense and aerospace applications (~10%)
Other electronics, glass, and metallurgy (~30%)
Largest Consumers: China (60%), Japan (15%), United States (10%), EU (8%)
Supply Landscape: China remains the dominant supplier, accounting for ~70% of global production and >85% of downstream processing capacity. Australia and the United States are increasing production, but refining capabilities remain a bottleneck.
MP Materials Corp. (NYSE: MP) Snapshot
Market Cap: ~$4.2 billion (July 2025)
2024 Revenue: $366 million
EV/EBITDA (TTM): ~16.3x
Net Income Margin: 9.2%
Cash Reserves: ~$930 million
Key Risks:
Heavy reliance on Chinese refining partners (Shenghe Resources)
Limited downstream integration
Premium valuation relative to peers
Concentrated asset base (Mountain Pass is a single asset operation)
Alternative REE Companies with Better (IMHO) Value and Risk Profiles
1. Lynas Rare Earths Ltd. (ASX: LYC)
Market Cap: ~$4.9 billion AUD
2024 Revenue: ~$780 million AUD
EV/EBITDA: ~9.2x
Balance Sheet: Net cash position of ~$800 million AUD
Geological Asset Quality: Mount Weld (Western Australia) is among the highest-grade REE deposits globally.
Operational Edge: Owns and operates both upstream mining and downstream refining (Malaysia and under-construction U.S. plant in Texas).
Risk Profile: Diversified processing capabilities reduce reliance on China. Regulatory risk in Malaysia is a moderate concern.
Bottom Line: Superior integration and lower valuation multiple offer better risk-adjusted return potential than MP Materials.