Pentagon-backed MP Materials warned investors this week to approach other rare earths projects with caution, pointing to the industry's difficult economics.

Stocks of U.S. rare earth companies have had wild swings in recent months as investors have speculated that the Trump administration might strike more deals along the lines of its landmark agreement with MP . Smaller retail traders have gotten involved in the stocks with the VanEck Rare Earth and Strategic Metals ETF up 60% this year.

The Defense Department in July took an equity stake in MP, set a price floor for the company, and inked an offtake agreement with the rare earth miner and magnet maker in an effort to roll back China's dominance of the industry.

CEO James Litinsky said he didn't want "people to

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