|
Getting your Trinity Audio player ready...
|
📍 Washington, D.C. — July 11, 2025
In a landmark move to reduce U.S. dependence on Chinese rare earths, the Department of Defense (DoD) has invested $400 million in MP Materials, acquiring a 15% stake and becoming the company’s largest shareholder. The strategic partnership aims to establish a fully domestic mine-to-magnet supply chain, critical for defense and clean energy technologies.
🏭 Mountain Pass and the 10X Facility MP Materials owns Mountain Pass, the only operational rare earth mine in the U.S., located in California’s Mojave Desert. The Pentagon’s investment will fund the construction of a second magnet manufacturing plant, the “10X Facility”, expected to begin operations in 2028. Once completed, it will boost MP’s magnet production capacity to 10,000 metric tons annually, enough to meet both defense and commercial demand.
💰 Financial Commitments and Guarantees
- $1 billion in financing from JPMorgan Chase and Goldman Sachs for the 10X Facility
- $150 million DoD loan to expand heavy rare earth separation at Mountain Pass
- 10-year off-take agreement for 100% of magnet output from the new facility
- Price floor guarantee of $110/kg for neodymium-praseodymium (NdPr) products
📈 Market Impact and Strategic Significance Shares of MP Materials surged over 50%, closing at $45.23, lifting its market capitalization to $7.4 billion. The deal is seen as a template for industrial policy, signaling the U.S. government’s intent to counter China’s dominance, which currently accounts for over 90% of global magnetic rare earth production.
🗣️ Leadership Commentary MP Materials CEO James Litinsky described the partnership as a “decisive action by the Trump administration to accelerate American supply chain independence”. The Pentagon’s involvement ensures long-term revenue stability and positions MP as a cornerstone of U.S. critical mineral strategy.
