MP Materials shares soared more than 40% in premarket trading after the company announced a landmark public-private partnership with the U.S. Department of Defense (DoD), which will position the Pentagon as MP's largest shareholder. The agreement is part of a broader strategy to strengthen the domestic rare earth supply chain and reduce U.S. dependence on China, which currently dominates global production and refining.

As part of the deal, the Defense Department will invest $400 million in a newly created class of convertible preferred stock, along with a warrant to purchase additional shares of MP’s common stock. These instruments collectively represent approximately 15% ownership of MP Materials on an as-converted and as-exercised basis, as of July 9, 2025. The transaction is scheduled to close on July 11, 2025.

MP Materials owns and operates the only rare earth mine currently in operation in the United States, located in Mountain Pass, California. With the Pentagon’s investment, MP plans to expand its rare earth separation capabilities and build a second U.S.-based magnet manufacturing facility, known as the “10X Facility”, at a location still to be determined. The facility is expected to begin commissioning in 2028.

The agreement includes a comprehensive 10-year package of commitments to support long-term growth and resilience in the rare earth industry. Key terms include:

• A price floor commitment of $110 per kilogram for NdPr (Neodymium-Praseodymium), a key rare earth metal used in electric motors and wind turbines.
• A 10-year offtake agreement ensuring that 100% of the magnets produced at the 10X Facility will be purchased by defense and commercial customers.

• A $150 million loan from the Defense Department to help MP Materials add heavy rare earth separation capabilities at its Mountain Pass site.

• A $1 billion commitment from JPMorgan Chase and Goldman Sachs to finance construction of the 10X Facility, subject to customary conditions.

The move comes amid heightened tensions in the critical minerals sector. In April, China—responsible for nearly all global rare earth refining—imposed export restrictions, causing a 75% drop in rare earth magnet exports. In response, the Trump administration invoked emergency powers in March and began exploring direct equity investments in U.S. companies critical to national security.

“This initiative marks a decisive action by the Trump administration to accelerate American supply chain independence,” said James Litinsky, Founder, Chairman, and CEO of MP Materials. “We are proud to enter into this transformational public-private partnership and are deeply grateful to President Trump, our partners at the Pentagon, and our employees, customers, and stakeholders for their unwavering support and dedication.”

MP Materials is also commissioning a magnetics facility in Texas, known as Independence, which will anchor the company’s downstream capabilities and serve both commercial and defense customers.

This historic partnership signals a major step forward in reshoring the rare earth industry, which plays a critical role in advanced technologies such as electric vehicles, smartphones, wind turbines, and defense systems. With MP Materials now positioned as a national strategic asset, the U.S. is one step closer to breaking China’s near-total control over this vital supply chain.