Rare Earth Stocks Soar on Friday: MP Materials Up 8%, USA Rare Earth Up 9%, NioCorp Up 3%. What’s Behind the Jump?

USA Rare Earth (USAR) completed its CEO succession, naming Thras Moraitis as CEO. The company reorganized into three business units: Upstream, Midstream, and Downstream. Moraitis will lead Upstream, while Chaitan Kansal and David Bushi will head Midstream and Downstream, respectively. The company operates across multiple stages of the rare-earth supply chain, including mines, processing facilities, and magnet production. USAR aims to establish a Western-aligned rare-earth products supply chain.

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.

General Motors (GM) invested in MP Materials five years ago to secure a domestic supply of rare-earth magnets. Commercial shipments are expected to begin by late 2026. GM's early investment aimed to reduce reliance on overseas production and strengthen its supply chain. MP Materials processes rare-earth elements in California and manufactures magnets in Texas for GM's electric vehicles.

The U.S. is investing heavily to reduce reliance on China for critical minerals. The government has backed over 180 projects, including loans and equity stakes, totaling $7.6B in 18 months. MP Materials, Lithium Americas, and Energy Fuels are among the beneficiaries. China still dominates, but market share losses are projected by 2030.

GM's five-year investment in rare-earth materials is yielding results, with MP Materials now supplying U.S.-made magnets for EV motors. This partnership reduces GM's reliance on China and strengthens a domestic supply chain.

MP Materials secured a $110/kg NdPr price floor, $150M DoD loan, and $1B construction financing in 2025. Serra Verde's 15-year deal includes $575/kg Dy and $2,050/kg Tb floors, with $565M DFC financing. Arafura's Nolans project highlights ECA-backed debt and offtakes covering 66% of capacity as prerequisites for project bankability. Governments and OEMs are assuming risks traditionally held by producers, reducing reliance on traditional intermediaries.