Can America Bets Big on Rare Earths Break China’s Grip on Critical Minerals?

For the first time in more than a century, the U.S. government has made a direct, large-scale investment in a private company and it’s not in railroads, steel, or oil. It’s in rare earths metals that power the modern world.

On July 10th, the Department of Defense announced a $400 million investment for a 15% stake in MP Materials, the only American producer of rare-earth metals. That makes the Pentagon the company’s single biggest shareholder.

The cash infusion will allow MP Materials which operates the Mountain Pass mine in California and a magnet factory in Texas to dramatically ramp up production. And of course they are not ordinary metals.

Rare earths are the hidden building blocks of fighter jets, electric vehicles, smartphones, wind turbines, and even advanced medical equipment.

Just days later, on July 15th, Apple struck a $500 million deal with MP Materials, committing to buy magnets for its devices and co-develop a rare-earth recycling facility. The move ties Silicon Valley’s future more closely to domestic supply chains, a signal that big tech is aligning with Washington’s industrial strategy.

Rare earth elements (17 in total) are essential for high-performance magnets, batteries, and military hardware. Despite their name, they’re not especially scarce in nature. What makes them “rare” is the difficulty of extracting and processing them without environmental damage, as well as the concentration of supply chains in just a few countries.

At present, China controls around 80% of global rare-earth processing, giving Beijing extraordinary leverage over industries that the United States and its allies cannot function without.

The U.S. has long recognized the vulnerability created by its dependence on Chinese supply. Fighter jets, advanced missile systems, and stealth technologies all require rare-earth magnets and alloys. Without them, America’s defense industry would grind to a halt.

By stepping in direcrly the Pentagon is doing more than just subsidizing a company it’s taking ownership in the supply chain.

Building a rare-earth industry from the ground up is no easy feat. Mining is just one part of the puzzle; the far harder step is processing the raw materials into usable forms. That’s where China’s decades-long dominance lies. Even if MP Materials and its partners can scale production, developing refining expertise and competing at China’s cost levels will take years.