Litinsky James H. sold $26.2M of MP (indirect holdings)

JPMorgan's $1.5T Security and Resiliency Initiative (SRI) has deployed about $5B of its $10B equity fund into 10 companies in its first year, focusing on growth capital. The initiative spans five sectors, including critical minerals. USA Rare Earth (USAR) and MP Materials (MP) saw stock gains after the initiative's launch, partly due to China's rare earth export controls. The SRI's impact on critical minerals remains unclear, with limited public evidence of disbursements.

Critical Metals (CRML) rose 4% to $6.80 after Trump announced mineral exploration plans in Greenland, where it operates the Tanbreez project. MP Materials (MP) fell 2% to $41.71, and USA Rare Earth (USAR) declined 3% to $10.95. The VanEck Rare Earth ETF (REMX) dropped 1% to $56.96. CRML's gain is tied to its Greenland project, while MP and USAR operate in the U.S.

MP Materials opened a magnet manufacturing plant in Fort Worth, employing 350+ workers, with plans to expand to 2,000. The facility supports contracts with General Motors and Apple, including a $500M deal with Apple. The company is also building a 1.2M sq ft campus in Northlake. These expansions aim to boost domestic rare earth magnet production and supply chain capacity.

The U.S. is boosting domestic rare earth production with federal support, including grants, loans, equity stakes, and purchase agreements. The Department of Commerce invested $1.6 billion in USA Rare Earth, while the Department of Defense agreed to a 10-year purchase deal and price floor with MP Materials. High production costs may slow some segments' growth, according to ING.

The Pentagon invested $400M in MP Materials (NYSE:MP) for rare earth production, becoming its largest shareholder. GM (NYSE:GM) is set to receive its first rare earth magnets from MP's Texas plant, with deliveries expected in Q4 2026. MP's stock surged post-deal but has since declined, trading at $46.98 on October 2, 2026.

China dominates rare earth element processing and production. New US defense rules will restrict supply chains starting in 2027. MP Materials and USA Rare Earth received significant US government funding. Investors should focus on qualified tonnage, not just plant capacity, as expertise and yields take time to develop.