Shares of MP Materials experienced a notable decline this week following a report that cast uncertainty over future U.S. government support for critical minerals projects. According to a Reuters article, the current administration is stepping back from plans to guarantee minimum prices for domestic critical minerals initiatives in the future—a mechanism the industry views as crucial for making investments more predictable.
The company was quick to clarify a key point for investors: its existing agreement with the U.S. government remains fully intact and is unaffected by this reported policy discussion.
Sector-Wide Reaction to Reported Policy Change
The Reuters report, published on Thursday, indicated that the government is withdrawing from the concept of providing price floors for future U.S. critical minerals projects. The news agency cited limited congressional funding and the challenge of establishing market-appropriate prices as primary reasons, according to its sources.
The report further suggested that the message was conveyed in a private meeting earlier this month: future projects would need to demonstrate their economic viability without the support of government-mandated price guarantees.
Existing Defense Department Agreement Stands Firm
A critical distinction in the report is that any policy shift would apply only to future agreements. MP Materials has stated that its current arrangement remains unchanged.
This arrangement stems from a deal finalized in the summer of 2025. The U.S. Department of Defense (DoD) invested $400 million in convertible preferred stock and entered into a 10-year supply contract with the company. This contract includes a price floor of at least $110 per kilogram for neodymium-praseodymium (NdPr).
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MP Materials responded to the Reuters story on platform X, stating there have been no changes to its contract or to the government’s obligations. The company characterized the reporting as an “inaccurate” and “misleading” portrayal of the situation.
Market Impact and Broader Scrutiny
The selling pressure was not isolated to MP Materials. Reuters noted that other sector players also faced downward pressure, with Australia-listed Lynas Rare Earths falling by over 10% at one point following the news.
The report added that after the MP Materials deal, the government made equity investments in other critical minerals companies, including Lithium Americas, Trilogy Metals, and USA Rare Earth. However, these subsequent investments did not include minimum price guarantees—a point fueling debate about the future use of such instruments.
Additional scrutiny is emerging from the U.S. Senate. Reuters reported that members of the Senate Armed Services Committee have requested a meeting with Pentagon officials to discuss why MP Materials received a price floor and to examine the broader strategy for mineral sector investments.
Upcoming Financial Release
Separately, MP Materials announced that it will report its fourth-quarter 2025 financial results on February 26, after the U.S. market closes. A conference call and webcast to discuss the results are scheduled for the same day at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time).
Key Points for Investors:
* Reuters reported a potential shift away from government price guarantees for future critical minerals projects.
* MP Materials confirms no change to its existing contract and government commitments.
* Next major event: Q4 2025 earnings release on February 26.
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