According to S&P Global Market Intelligence data, MP Materials (MP) stock fell 13.4% in June, with most of the decline occurring after China added MP Materials to its export control list. MP Materials itself does not directly trade with China, but the secondary effects of this export ban are significant.
Secondary Effects of China's Export Control List: Equipment Suppliers May Be Prohibited from Selling Products to MP Materials
According to The Motley Fool's analysis, the primary risk from China's export ban on MP Materials is not direct trade disruption but indirect supply chain impact. The ban's scope covers: not only prohibiting direct Chinese exports to MP Materials, but also banning third-party companies from reselling Chinese products to MP Materials.
For example, if a rare earth processing equipment company uses Chinese-made components, the Chinese government may prohibit it from selling finished products to MP Materials. Given China's dominant position in the global supply chain for rare earth materials, magnet production, and manufacturing, this indirect effect could substantially limit MP Materials' ability to procure critical equipment and components.
U.S. Department of Defense Investment Framework: $400 Million Equity, $150 Million Loan, and a 10-Year Minimum Price Agreement
According to reports, as part of the U.S. government's policy to support MP Materials in building a domestic rare earth supply chain, the U.S. Department of Defense provided the following support in a cooperation agreement reached in summer 2025:
Equity Investment: $400 million, taking a stake in MP Materials
Loan: $150 million
Financing Arrangement: Assisting banks in arranging $1 billion in financing
Minimum Price Agreement: A 10-year minimum purchase price guarantee
Offtake Commitment: Agreeing to ensure that all magnets produced at the 10X plant are purchased by defense and commercial customers, with both parties sharing profits
The above arrangements secure the financial foundation for MP Materials to build the 10X plant in North Lake, Texas.
Apple Signs $500 Million Long-Term Rare Earth Magnet Supply Agreement with MP Materials
According to reports, after improvements in financial condition and increased domestic production capacity, Apple signed a $500 million long-term supply agreement with MP Materials, ensuring Apple's access to domestically sourced and produced rare earth magnets. This agreement is a key component of U.S. companies' strategy to source rare earth materials away from China.
Frequently Asked Questions
What is the direct cause of MP Materials' stock decline in June?
According to S&P Global Market Intelligence data and The Motley Fool analysis, MP Materials' stock fell 13.4% in June, with most of the decline occurring after China added MP Materials to its export control list. The ban's primary impact is an indirect secondary effect, potentially limiting rare earth equipment manufacturers using Chinese parts from selling products to MP Materials.
How does China's export ban indirectly affect MP Materials?
According to reports, the ban's scope is not limited to direct exports but also covers third-party companies reselling Chinese products to MP Materials. Due to China's dominant position in the global rare earth materials and manufacturing supply chain, this could limit MP Materials' ability to procure rare earth processing equipment and related components.
How much support is the U.S. government providing to MP Materials?
According to reports, the U.S. Department of Defense invested $400 million in equity in MP Materials, provided a $150 million loan, and assisted in arranging $1 billion in financing, along with a 10-year minimum price agreement and a full-capacity offtake commitment for the 10X plant. Apple also signed a $500 million long-term supply agreement.
