MP Materials vs. The Metals Company: Which Rare-Earth Bet Actually Pays Off First?

Rare-earth elements are central to advanced technologies, including those used in defense. For decades, China has tightened its grip on the mining and processing of these crucial materials, raising concerns among U.S. policymakers.

Research from The Motley Fool shows that China accounts for roughly 70% of rare-earth extraction and 90% of rare-earth processing. In response, there is a renewed focus on boosting domestic mining and processing of rare-earth elements.

Two rare-earth companies generating buzz are MP Materials (NYSE: MP) and The Metals Company (NASDAQ: TMC). Both companies could be key players in helping the U.S. secure rare-earth elements, but one in particular stands out as the smarter investment choice that could pay off sooner rather than later.

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MP Materials has this key advantage over The Metals Company

When you compare MP Materials and The Metals Company (TMC), the differences are stark. MP Materials operates the Mountain Pass rare-earth mine and processing facility, the only active rare-earth mining and processing site of scale in North America. In contrast, TMC is a development company exploring the collection and processing of polymetallic nodules on the seafloor, a practice known as deep-sea mining.

MP Materials already has mining and processing capabilities and is expanding its downstream processing capabilities, where it manufactures powerful magnets used in many modern technologies.

Another distinct advantage for MP Materials is its massive agreement with the Department of Defense. As part of the deal, the DoD entered into a price protection agreement that guarantees a minimum price of $110 per kilogram for MP's neodymium-praseodymium (NdPr) product. In Q2 2026 alone, this agreement generated $17.6 million in price protection income for MP Materials.

In addition to its partnership with the DoD, MP also has long-term agreements with General Motors and Apple for its permanent magnets.

The Metals Company faces a couple of key risks

In comparison, TMC is looking to mine the deep ocean floor for resource-rich polymetallic nodules. These nodules are rich in nickel, copper, cobalt, and manganese, and the company is targeting the Clarion Clipperton Zone in the Pacific.

This region is rich in resources. According to a pre-feasibility study and initial assessment by TMC, the combined estimated resource Net Present Value (NPV) could be $23.6 billion, with undiscounted lifetime revenue of up to $369 billion.

That said, TMC faces several legal hurdles. For example, the company is benefiting from a presidential executive order by President Donald Trump designed to expedite deep-sea mining permitting. However, the International Seabed Authority (ISA) has not yet finalized exploitation regulations, and there is debate over whether the U.S. even has the authority to issue mining permits in these waters.

This rare-earth stock is a better buy right now

Rare-earth mining and processing have become a crucial component of national security, helping the U.S. shore up its supply chains.

The Metals Company is looking to carve out its place in the deep-sea mining space, but legal hurdles and other technical hurdles, like the feasibility of deep-sea mining at scale, remain and make it a risky stock for investors buying today.

On the other hand, as the U.S. builds up its mining and processing capabilities, MP Materials is already well positioned to help the country meet its needs immediately and will grow into an even larger player once its 10X facility comes online in 2028.

Courtney Carlsen has positions in Apple, MP Materials, and TMC The Metals Company. The Motley Fool has positions in and recommends Apple and MP Materials. The Motley Fool recommends General Motors. The Motley Fool has a disclosure policy.