U.S. military operations against Iran have underscored the growing importance of rare earth magnets in the future of warfare, MP Materials Corp. CEO James Litinsky said on Friday. 

"The events in the Middle East have certainly accelerated and magnified the perspective around drones and robotics being the future of warfare," Litinsky said during the company’s earnings conference call. "The future of warfare will be around millions if not billions of robots and drones working in cohesion. That is a huge demand accelerant for rare earth magnetics."

Those operations began with coordinated U.S.-Israeli strikes against Iran on February 28. The U.S. as used low-cost attack drones manufactured by Arizona-based SpektreWorks alongside much more expensive Northrop Grumman Corp.'s (NYSE:NOC) B‑2 Spirit stealth bombers and Lockheed Martin Corp.'s (NYSE:LMT) F‑22 Raptor and F‑35A/C Lightning II fighter jets. 

China’s 2025 rare earth export controls disrupted U.S. supply chains, spurring a race to build magnet plants in the U.S., a race MP Materials is helping to lead, with one Texas facility already operational and a second one ten times larger now under construction nearby.

MP Materials reported Friday that total revenue increased 49% year over year to $90.6 million for the three months ended March 31. Record Neodymium-Praseodymium first-quarter  production of 917 metric tons, a 63% increase year over year, and record rare earth oxide production of 12,983 metric tons, a 6% increase year over year, drove the increase.  

Its magnetics segment revenue increased by $15.9 million to $21.1 million year over year, driven by increased production of magnetic precursor products.  

Status Quo Needed to Change

Under the Trump administration, the U.S. has moved to reduce its dependence on Chinese imports of rare earths and critical minerals. Data from the International Energy Agency showed that China accounted for 94% of permanent magnet production and 91% of global refining and processing capacity of key rare earths in 2024.

The Department of Defense became the largest shareholder of MP Materials in July after agreeing to buy $400 million of its preferred stock. The company intends to use the proceeds of this investment to expand its existing rare earths separation and processing capabilities, as well as its magnet production capacity. 

For U.S. national security, the status quo for rare earth magnetics "needed to change," Litinsky said. "There’s no question that it is just a further recognition and maybe even pulling that timetable and the scale of that demand forward."

MP Materials has made it a priority to develop a non-China equipment sourcing strategy to reduce its dependence. "We thought it would be sort of very odd and hard to argue that it made sense for a non-China supply chain for rare earth magnetics, but then be wholly reliant on Chinese equipment," he said.  

USA Rare Earth Expands Magnet Output 

As MP Materials scales up, other American companies are also racing to close the gap with China. 

USA Rare Earth, Inc. announced on March 26 the successful commissioning of its Phase 1a commercial magnet production line at its Stillwater, Oklahoma facility. The company can start fulfilling customer orders for sintered neodymium-iron-boron (NdFeB) permanent magnets in the second quarter of 2026.

CEO Barbara Humpton said the production was a key step in reducing U.S. reliance on foreign manufacturing. The facility will produce high-grade permanent magnets essential to aerospace and defense, semiconductors, energy, data centers, and physical AI.  

Phase 1a will ramp to 600 metric tons per annum by end-fourth quarter 2026, with Phase 1b adding capacity for 1,200 metric tons per annum total by first quarter 2027.

U.S. Forces Disable Two Iranian Vessels

The geopolitical pressures driving that investment were meanwhile playing out in real time. U.S. Central Command enforced blockade measures against two Iranian-flagged unladen oil tankers attempting to pull into an Iranian port on the Gulf of Oman. 

A U.S. Navy F/A-18 Super Hornet from USS George H.W. Bush (CVN 77) disabled the M/T Sea Star III and M/T Sevda after firing precision munitions into their smokestacks, preventing the non-compliant ships from entering Iran.

U.S. forces also disabled Iranian-flagged M/T Hasna on May 6 as it attempted to sail to an Iranian port in the Gulf of Oman. An F/A-18 Super Hornet from USS Abraham Lincoln (CVN 72) disabled the unladen oil tanker’s rudder by firing several rounds from a 20mm cannon gun.

“U.S. forces in the Middle East remain committed to full enforcement of the blockade of vessels entering or leaving Iran,” Adm. Brad Cooper, CENTCOM commander, said. “Our highly trained men and women in uniform are doing incredible work.”

As U.S. forces enforce the blockade, the rare earth magnet factories going up in Texas and Oklahoma are part of the same story of the U.S. racing to build the industrial base that modern warfare demands.