USA Rare Earth vs. MP Materials: Which Stock Will Make You Richer?
Key Points
MP Materials operates the only rare-earth metals mine in the U.S., but USA Rare Earth aims to change that.
Both mining companies are positioning themselves to benefit from future demand for permanent magnets.
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MP Materials (NYSE: MP) and USA Rare Earth (NASDAQ: USAR) are both after the same goal: to build a supply chain for rare-earth metals and magnets in the U.S. Both companies are still early in the buildout phase, yet which will make you richer will depend on how much risk you're ultimately willing to take.
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Of the two, MP looks like the less risky option. The company owns and operates the Mountain Pass mine in California, the only active rare-earth metals mine in the U.S. It also operates a magnet factory in Fort Worth, Texas, known as Independence, and it's building a second facility, the "10X Facility," that will lift its total domestic magnet output to an estimated 10,000 metric tons.
USA Rare Earth is pre-revenue, and it controls the Round Top deposit, one of the largest deposits of heavy rare-earth elements in the U.S. While this site is not operational yet, the company is aiming for commercial production in 2028.
In early 2026, the Trump administration announced a $1.6 billion funding package for USA Rare Earth. Funding from this deal will help the company develop its mine and build its first magnet factory in Oklahoma.
MP Materials has also been a beneficiary of the Trump administration. Indeed, in July 2025, it received a $400 million investment from the Department of Defense. The deal also included an agreement to buy 100% of the company's future production from its second magnet factory when it's finished.
MP carries a market value in the $11 to $12 billion range, while USA Rare Earth's is between $4 and $5 billion. Both companies are solving a critical problem -- the U.S. is too reliant on China for rare-earth metals and magnets -- but are in different stages of development. MP is actually generating revenue, but USA Rare Earth may offer investors more upside later if it can successfully open its first mine.
That said, both mining stocks are still speculative, and their success relies on continued demand for homegrown permanent magnets. Ultimately, execution will decide which one becomes America's go-to company for permanent magnets.
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Steven Porrello has positions in USA Rare Earth. The Motley Fool recommends MP Materials. The Motley Fool has a disclosure policy.
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