MP Materials reported a 14% decline in revenue after halting rare earth sales to China, a move made under an agreement with the U.S. government. The company, which operates the Mountain Pass mine in California, had been a major supplier to Chinese processors before the decision.

The revenue drop reflects the immediate impact of cutting off its largest market. Rare earths are critical for electric vehicles, wind turbines, and defense systems, making the U.S. government keen to secure domestic supply chains. The halt was part of broader efforts to reduce dependence on Chinese processing capacity.

While the short-term financial hit is clear, the move aligns with Washington's strategic push to reshore critical mineral processing. MP Materials is building its own processing facilities in Texas, aiming to capture more value domestically. The company's pivot away from China marks a significant shift in the rare earths market, though it comes at the cost of near-term revenue growth.