STILLWATER, Okla. — May 28, 2026 (The Oklahoma Post)
The company building Stillwater’s rare earth magnet plant spent this week answering a lawsuit instead of cutting a ribbon. MP Materials (NYSE: MP), the only company mining and processing rare earths at commercial scale in the United States, has sued USA Rare Earth (NASDAQ: USAR) in Texas Business Court, alleging the rival stole its proprietary magnet technology through a former employee. The case was first reported by Bloomberg.
According to the complaint, filed May 22, MP alleges that a former engineer, Kevin Elkins, shared confidential “grain boundary diffusion” formulations with USAR, which then passed the information to a third-party firm. The suit names Elkins and that firm, FOM Technologies, as defendants alongside USAR. Grain boundary diffusion is a process used to boost the performance of neodymium-iron-boron magnets, the high-strength permanent magnets found in electric vehicles, defense systems and advanced electronics. MP claims in the filing that USAR has made a habit of recruiting from competitors and using those hires to accelerate its own development.
The complaint goes beyond the trade secret claim. MP also argues that USAR has missed multiple operational milestones and questions the validity of the mineral resource USAR touts at its Round Top deposit in West Texas, which the company calls the largest heavy rare earth deposit in the country.
USAR rejected the allegations. In a statement to MINING.COM, the company said the complaint “has misrepresented our company, our culture, and our people,” and said it would defend itself and respond appropriately. USAR framed the fight as a distraction from China’s grip on the global rare earth supply chain, which the company said the entire Western industry is racing to break.
Investors reacted quickly. USAR shares fell more than 3 percent in early trading, dropping its market value below $6 billion. MP also slipped about 3 percent, trading at roughly $11.6 billion.
The stakes reach well past two balance sheets. Both companies are central to a federal push to build a domestic rare earth supply chain and reduce dependence on China, and the Trump administration has put public money behind each. That includes a $400 million equity investment in MP in July 2025 and a $1.6 billion agreement with USAR this year. USAR is also pursuing a $2.8 billion acquisition of Serra Verde Group, owner of Brazil’s only rare earth mine, a deal still under review, and has announced plans for a plant in France. The lawsuit lands as USAR’s government backing was already drawing questions from lawmakers.
The business risk for USAR runs deeper than legal fees. Trade secret cases can drag on for years, and the remedies MP is seeking, including injunctions, could in theory limit how USAR uses the magnet process at the heart of its strategy. Even short of an injunction, the cloud matters. A pending lawsuit alleging stolen technology gives regulators weighing the Serra Verde review, investors and future customers one more reason to wait before committing, at exactly the moment USAR needs them to commit.
Customers are the quieter concern. The automakers and defense contractors USAR hopes to supply buy on certainty, and they are unlikely to sign long-term magnet contracts tied to a process that a court might later rule was misappropriated. If the case lingers, the practical effect could be lost or delayed offtake agreements, the kind of deals that turn a commissioned plant into a profitable one.
That is where Stillwater comes in. The Stillwater facility is the physical center of USAR’s mine-to-magnet plan, and the grain boundary diffusion process MP is fighting over is precisely the kind of technology the plant is meant to run at scale. State and local officials have promoted the project as a manufacturing win and a source of skilled jobs. A courtroom fight over the plant’s core process does not stop construction, but it introduces a risk that did not exist a week ago, and it ties the facility’s future partly to the outcome of litigation playing out a few hundred miles south in a Texas courtroom rather than to anything happening on the ground in Payne County.
For Oklahoma, the dispute is not abstract. USAR has commissioned its flagship magnet manufacturing facility in Stillwater, the physical center of its mine-to-magnet ambitions and a project state and local officials have promoted as a manufacturing win. A trade secret fight over the exact magnet process the Stillwater plant is meant to run puts a courtroom question mark over a facility Oklahoma has been counting on.
Writing By: Dr. King Shultz | Editing by Robbie Robertson
Editor’s Note:
Sources
MINING.COM, “MP Materials accuses USA Rare Earth of magnet tech theft,” May 27, 2026. https://www.mining.com/mp-materials-accuses-usa-rare-earth-of-magnet-tech-theft/
Bloomberg Law, “Rare Earth Miner MP Materials Sues Rival on Sharing of Tech,” on the May 22 filing in Texas Business Court and the naming of a former MP engineer. https://news.bloomberglaw.com/ip-law/rare-earth-miner-mp-materials-sues-rival-on-sharing-of-tech-1
Rare Earth Exchanges, “America’s Rare Earth Rivalry Moves From the Mine to the Courtroom,” identifying defendants Kevin Elkins and FOM Technologies and explaining grain boundary diffusion. https://rareearthexchanges.com/news/americas-rare-earth-rivalry-moves-from-the-mine-to-the-courtroom/
Seeking Alpha, “MP Materials sues USA Rare Earth over alleged magnet technology theft,” May 27, 2026. https://seekingalpha.com/news/4597700-mp-materials-sues-usa-rare-earth-over-alleged-magnet-technology-theft
The Northern Miner, “MP Materials accuses USA Rare Earth of tech theft,” on the Stillwater facility and Serra Verde deal. https://secure.northernminer.com/news/mp-materials-accuses-usa-rare-earth-of-tech-theft/1003891523/
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