MP Materials (NYSE: MP) and USA Rare Earth (NASDAQ: USAR) are competing to establish a rare-earth metals and magnets supply chain in the U.S. MP owns the only active U.S. rare-earth metals mine and is expanding its magnet production. USA Rare Earth controls a large deposit and aims for commercial production in 2028.

The Trump administration provided USA Rare Earth with a $1.6 billion funding package to develop its mine and build a magnet factory in Oklahoma. MP Materials received a $400 million investment from the Department of Defense. Both companies aim to reduce U.S. reliance on China for rare-earth metals and magnets.

MP Materials is ahead in revenue generation and market value, while USA Rare Earth is pre-revenue but has significant potential. Both companies are speculative investments dependent on the demand for domestic permanent magnets. The ultimate success will hinge on their ability to execute their plans effectively.

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