Better Rare-Earth Mining Stock to Buy in June: MP Materials or USA Rare Earth?

This is less a pure commodity call than a policy-backed capacity build in a strategically bottlenecked part of the industrial stack. The real second-order winner is not just MP or USAR, but downstream OEMs that can secure domestic magnet supply and de-risk procurement volatility; that should incrementally support defense primes, auto suppliers, and select industrials with localization mandates. The loser is the marginal offshore processor: once the U.S. anchors long-term offtake and government-backed floor pricing, China’s ability to weaponize spot pricing against U.S. entrants gets structurally weaker, even if that transition takes multiple years.

MP has the cleaner near-term setup because it is already monetizing scale while the market is still underestimating how much a government-backed price floor compresses downside. The subtle bull case is that the DoD arrangement effectively converts a cyclical materials business into a quasi-utility-like cash flow stream for a portion of output, which should lower financing costs and improve execution on the magnet buildout. The flip side is that this can make the stock look “de-risked” just as capex intensity and project complexity stay high; any commissioning delay or contamination/yield issue would be punished harder now because expectations are being reset upward.

USAR is more of an option on heavy rare earths and supply-chain completion, not a cleaner operating story. The market may be over-assigning value to the strategic narrative before the company proves it can integrate acquisitions and convert resource optionality into repeatable processing margins. If the Round Top thesis works, the upside is in scarce heavy REEs, but that is a years-not-months story and highly sensitive to permitting, metallurgical recoveries, and capex drift.