MP Materials Deal Breaks New Ground on Industrial Policy
- SWS
- Jul 15
- 3 min read
Energy Policy Perspectives Vol. 9 - July 15, 2025
MP Materials deal. The Trump administration has previously touted attracting private-sector investments, easing regulations and accelerating permits to advance new energy projects, but the multibillion-dollar public-private partnership between MP Materials Corporation (MP, $48.52, NR) and the Department of Defense announced last week (July 10th) marks a new bold step. Elements of this deal could be adapted to benefit other nascent supply chains and industries that are critical to the Trump administration’s strategic priorities which could have a dramatic impact on associated equities (MP Materials is up 60.1% from its July 9th close of $30.03).
Multi-levels of direct industrial sponsorship. The deal aims to break China’s dominance of the rare earth metal and magnet supply chains by supporting MP Material’s vertical integration from rare earth mining through magnet production. MP operates the only U.S. rare earth mine and is working to boost domestic processing and magnet production. We believe there were five key elements here: 1) price floor commitment to protect against non-market foreign manipulation; 2) long-term offtake to justify significant capital investment by guaranteeing demand; 3) strategic equity stake to align long-term interests; 4) value chain support through vertical integration to help build resiliency; and 5) mix of public-private capital to manage risk and de-risk the floor while retaining upside.
Reducing critical vulnerabilities. It is important to caveat that this type of strategy is not a cure-all, supply chains are interconnected systems, and it is not realistic for every nut, bolt, chemical and line of code to be secure and US-made. The objective is to identify and secure choke points to minimize critical vulnerabilities. Even without 100% domestic control, a combination of some domestic production, multi- supplier sourcing and friendly foreign alternatives provides time to respond to shocks and leverage during negotiations. It also helps to rebuild the domestic ecosystem that can be useful for other industries and future innovations particularly as labor and manufacturing experience remain critical non-physical obstacles.
Unaddressed strategic chokepoints that threaten national security, energy dominance, and reindustrialization.
Grid infrastructure. The United States has a shortage and limited domestic capacity to produce large power transformers, grain-oriented electrical steel and high voltage components. These are strategically critical to the functioning of the electrical grid and everything connected to it.
Batteries. A China-dominated technology that is increasingly critical to non-EV applications such as keeping electrical grids secure, our troops protected, digital infrastructure online and factories productive.
HALEU supply. Advanced nuclear reactors and many leading SMR companies rely on high assay low enriched uranium (HALEU), for which there is limited domestic production capacity and global capacity is dominated by Russia. Most of these projects are not anticipated prior to the end of decade but are viewed as a critical zero emission power source equipped to meet growing AI data center power demands.
PLEASE SEE BELOW FOR IMPORTANT DISCLOSURES, REG AC ANALYST CERTIFICATION AND DISCLAIMERS
Siebert Williams Shank & Co., LLC or its Affiliates do and seek too business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.
Analyst Certification
We, Christopher R. Ellinghaus and Gabriele Sorbara hereby certify that the views expressed in this research report accurately reflect our personal views about the subject companies and their securities. We further certify that no part of our compensation was, is, or will be directly, or indirectly, related to the specific recommendations or views contained in this research report.
Financial Interests: Neither we, Christopher R. Ellinghaus or Gabriele Sorbara, nor any member of our households own securities in any of the subject companies mentioned in this research report. Neither we, nor a member of our households is an officer, director, or advisory board member of the subject company or has another significant affiliation with the subject company. We do not know or have reason to know at the time of this publication of any other material conflict of interest.
Analyst Compensation: The authors compensation is based upon the value attributed to research services by Siebert Williams Shank institutional brokerage clients. The authors of this report are compensated based on the performance of the firm, and have not received any compensation in the past 12 months from any of the subject companies mentioned in this report. The performance of the firm is driven by its secondary trading revenues, investment banking revenues, and asset management revenues.
Siebert Williams Shank Equity Research Ratings Key
BUY: In the analyst's opinion, the stock will outperform the S&P 500 on a total return basis over the next 12 months.
HOLD: In the analyst's opinion, the stock will perform in line with the S&P 500 on a total return basis over the next 12 months.
SELL: In the analyst's opinion, the stock will underperform the S&P 500 on a total return basis over the next 12 months.
Distribution of Equity Research Ratings as of: July 14, 2025
IBC (Investment Banking Clients) is defined as companies in respect of which Siebert Williams Shank (the “firm”) or its affiliates have received or are entitled to receive compensation for investment banking services in connection with transactions that were publicly announced in the past 12 months.
Other Important Disclosures
Investment Banking Disclosures: Within the past 12 months, the research analyst authoring this report has not participated in a solicitation of any subject company mentioned within this report, with or at the request of investment bankers, for investment banking business. Within the past 12 months, the firm and its affiliates have not managed or co-managed a public offering of the securities of any subject company mentioned within this report, nor has the firm received compensation for investment banking products or services from those companies.
Firm Compensation: Within the past 12 months, the firm and its affiliates have not received compensation for any non-investment banking products or services for subject companies mentioned in this report, and none of these subject companies have been a client of the firm during the past 12 months.
Stock Ownership: The firm and its affiliates do not own 1% or more of any class of equity security in this report, and do not make a market in any such securities.
Disclaimers: The information and opinions contained in this report were prepared by the firm and have been derived from sources believed to be reliable, but no representation or warranty, expressed or implied, can be made as to their accuracy. All opinions expressed herein are subject to change without notice. This report is for information purposes only and should not be construed as an offer to buy or sell any securities. The firm makes every effort to use valuation methodologies that it believes to be reasonable in the derivation of price targets, but we do not guarantee that such methodologies are accurate.
Additional Information: To receive any additional information upon which this report is based, please contact:
Siebert Williams Shank, Research Department
100 Wall Street, 18th Floor New York, NY 10015
212-830-4500
