There's a scene in The Big Short where Mark Baum stares into the abyss and says something like: "It's not that they didn't know. It's that they didn't want to know."
Well, here we are. The United States knew — for decades — that they'd handed China the keys to over 90% of the processing, separation, and manufacturing of rare earth magnets on a silver platter. Those obscure minerals that make your iPhone vibrate, your EV drive, and more importantly, the Pentagon's guided missiles actually work.
Now, with their backs against the wall, they've decided to wake up.
MP Materials' Big Play
MP Materials — owner of the only commercial-scale rare earth mine in the US, Mountain Pass in California — just announced they've picked Northlake, Texas, to build a $1.25 billion rare earth magnet manufacturing campus.
Dubbed "10X" (ambitious name, huh), the complex will produce roughly 7,000 metric tons of magnets per year. Add that to the 3,000 tons from the factory already running in Fort Worth — which opened in 2025 with clients like General Motors and Apple — and you've got 10,000 tons annually.
For context: American rare earth magnet imports dropped to a pitiful 6,000 tons in 2025, after China decided to weaponize minerals as a geopolitical tool by slashing exports.
In other words, on paper, this new factory solves the direct import problem. On paper.
The Pentagon Put Up the Cash — And Put Skin in the Game
This is where things get really interesting.
The US Department of Defense — which MP Materials CEO James Litinsky now publicly calls the "Department of War" (yeah, they went back to the original name, noticed that?) — didn't just invest $400 million in the company in 2025. They guaranteed a minimum price of $110 per kilogram of neodymium-praseodymium oxide for 10 years.
And there's more: all of 10X's production is committed to the Pentagon for the next 10 years. Read that again. ALL of it.
Commercial customers can use the material, but only with the Department of Defense's blessing.
This, my friends, is what Nassim Taleb would call skin in the game — mainlined straight into the vein. The US government isn't giving pretty speeches at press conferences. They're putting billions on the table, guaranteeing floor prices, and reserving production. This is public-private partnership that smells like wartime mobilization.
The Chinese Elephant in the Room
Senator Ted Cruz — who conveniently happens to be from Texas — dropped the standard-issue statement about the Chinese Communist Party being "the most acute threat to American national security." Politicians being politicians.
But the uncomfortable truth he didn't mention is this: even if MP Materials produces 10,000 tons per year, it doesn't solve the problem.
Why? Because when you add up all the rare earth magnets that come embedded inside imported cars, smartphones, wind turbines, and electronic equipment, America's real demand is absurdly higher than 6,000 tons.
China doesn't just control the mine and the factory. They control the entire chain. From the hole in the ground to the finished product sitting on the shelf at Best Buy.
Building a factory in Texas is a step. An important step, no doubt. But calling it "independence" — as Litinsky did in the press release — is a stretch. It's like saying you're independent from takeout because you learned how to cook rice.
Production Starts in 2028 — If Everything Goes Right
The factory is expected to create 1,500 direct jobs and begin operations in 2028. Two years is an eternity in today's geopolitical landscape. A lot can change. China could tighten the screws further. Taiwan could become a conflict zone. And rare earth prices could shoot into the stratosphere.
The market reacted with optimism, but I'm keeping one foot out the door. The history of critical minerals in the US is littered with projects announced with great fanfare that died in red tape, cost overruns, or vanishing political will when the cycle turns.
The difference this time? The Pentagon's wallet is wide open, and China has already shown it has zero shame about using natural resources as ammunition.
The question that lingers: is $1.25 billion a strategic investment, or is it just pocket change in a game that takes hundreds of billions to win?
And you — do you invest in a company that hinges on a 10-year government contract, or do you wait to see if the rest of the supply chain actually materializes?
Think about that before you hit the buy button.
