MP Materials, the rare earth company in which the U.S. Department of Defense is the largest shareholder, returned to profitability in the fourth quarter of 2024. The turnaround signals that America's rare earth independence policy to break free from China's dominance is gaining traction. However, experts warned that China's influence over global supply chains, led by rare earths, continues to deepen.
According to Reuters on the 26th (local time), MP Materials posted net income of $9.4 million (approximately 13.5 billion won) in the fourth quarter, supported by a price floor guarantee contract with the U.S. government and magnet material sales. This marks a significant improvement from the $22.3 million (approximately 32.1 billion won) loss in the same period last year, exceeding analyst expectations.
U.S. government support enabled MP Materials to swing from losses through the previous quarter to profitability. The Pentagon invested $400 million in MP Materials in July last year, acquiring a 15% stake to become the largest shareholder. It then guaranteed a price floor of $110 per kilogram for MP Materials' rare earths and paid $51 million (approximately 73.2 billion won) in subsidies under this agreement. A near-doubling of rare earth prices over the past seven months also contributed to the improved results.
MP Materials operates the only rare earth mine in North America and refines rare earths in California. The U.S. government's equity investment in the company last year drew attention as part of efforts to reduce dependence on China's rare earth dominance. MP Materials opened a rare earth magnet production facility in Texas last year and announced on the 26th that it plans to add a second magnet production facility under its agreement with the Pentagon.
Despite these U.S. efforts, analysis suggests America's dependence on Chinese supply chains has actually intensified. According to Reuters, the number of China-related companies added to the Entity List—a type of export blacklist—rose from 47 in 2018 to a record 257 in 2024, but plunged to 131 in 2025 after Trump's return to office.
Earlier this month, the Defense Department released proposed revisions to the Military End User (MEU) list that would add major Chinese technology companies Alibaba and Baidu while removing some Chinese memory semiconductor companies, only to abruptly withdraw the changes. Companies on the MEU list face restrictions on exports, re-exports, and transfers of U.S. goods and technology.
China, meanwhile, continues to escalate its export restrictions. Since enacting its Export Control Law in October 2020, China has introduced or expanded export control measures 29 times, compared to just six times between 2015 and 2020.