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    Rare Earths Firm MP Materials to Get US$400 Million Defense Department Investment

    Giann Liguid
    Jul. 11, 2025 09:07AM PST

    Shares of MP Materials surged nearly 50 percent after the Thursday announcement, closing at US$45.23 and pushing the company's market cap to US$7.4 billion.

    American flag on side of a gray aircraft tail under blue sky.
    Ryuno / Unsplash

    The US Department of Defense (DoD) will become the largest shareholder in MP Materials (NYSE:MP) after agreeing to purchase US$400 million worth of preferred stock in the company.

    MP Materials is known for owning and operating the only US rare earths mine.

    The rare earths producer said the proceeds from the investment will fund the expansion of its processing capabilities at the Mountain Pass mine in California and support the construction of a second magnet manufacturing facility in the US.


    The materials mined and processed by MP Materials are critical to the production of permanent magnets used in military systems, including the F-35 fighter jet, drones, and submarines.

    The US has depended heavily on foreign imports for these materials — primarily from China, which accounted for about 70 percent of rare earth imports in 2023, according to the US Geological Survey.

    In a press release issued on Thursday (July 10), MP Materials described the agreement as a "transformational public-private partnership." The company also said the deal will "dramatically accelerate the build-out of an end-to-end US rare earth magnet supply chain and reduce foreign dependency."

    The investment gives the Pentagon newly created preferred stock convertible into common shares, along with a 10-year warrant to buy additional stock at US$30.03 per share. If fully converted and exercised, the DoD would own 15 percent of MP Materials, based on current share counts as of Wednesday (July 9). That would exceed the 8.61 percent stake held by CEO James Litinsky and the 8.27 percent stake held by BlackRock Fund Advisors.

    Litinsky emphasized that the deal does not equate to government control of the company. “This is not a nationalization,” he told CNBC. “We remain a thriving public company. We now have a great new partner in our economically largest shareholder, DoD, but we still control our company. We control our destiny. We’re shareholder driven.”

    MP’s new magnet facility, called 10X, will increase the company’s magnet manufacturing capacity to 10,000 metric tons annually once it begins commissioning in 2028. The exact location of the facility has not yet been disclosed.

    The Pentagon has committed to purchasing 100 percent of the magnets produced at the 10X facility for 10 years.

    Additionally, the DoD will guarantee a minimum price of US$110 per kilogram for MP’s neodymium-praseodymium oxide, a key material for magnet production.

    If market prices fall below that level, the Pentagon will pay the difference quarterly. In return, once the new facility is operational, the government will receive 30 percent of any upside above US$110 per kilogram.

    To further support the buildout, MP Materials expects to receive a US$150 million loan from the Pentagon within 30 days to expand its heavy rare earth separation capabilities at Mountain Pass, the only active rare earth mine in the US.

    It is also commissioning a magnetics facility in Texas, known as Independence, to bolster its downstream processing capabilities.

    As the only domestic miner with vertically integrated capabilities and a clear path to rare earth magnet production at scale, MP Materials now sits at the center of the Biden-to-Trump era effort to bring critical minerals supply chains back to American soil.

    Don’t forget to follow us @INN_Resource for real-time updates!

    Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.

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    Giann Liguid

    Giann Liguid

    Writer

    Giann Liguid is a graduate of Ateneo De Manila University with an AB in Interdisciplinary Studies. With a diverse writing background, Giann has written content for the security, food and business industries. He also has expertise in both the public and private sectors, having worked in the government specializing in local government units and administrative dynamics.

    When he is not chasing the next market headline, Giann can most likely be found thrift shopping for his dogs.

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    Giann Liguid
    Giann Liguid

    Writer

    Giann Liguid is a graduate of Ateneo De Manila University with an AB in Interdisciplinary Studies. With a diverse writing background, Giann has written content for the security, food and business industries. He also has expertise in both the public and private sectors, having worked in the government specializing in local government units and administrative dynamics.

    When he is not chasing the next market headline, Giann can most likely be found thrift shopping for his dogs.

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